Single-Family New Construction Program

Round 3

The Iowa Economic Development Authority awarded the City funds to provide acquisition assistance to 31 homes in Iowa City. 25 homes have been sold to date. The City is offering down payment assistance of up to 25% of the purchase price of the selected homes to income qualified homebuyers. Please see the Builders and Home Designs link to view the homes.

Information about the available Round 3 homes can be obtained from the participating builder, Iowa City Community Development staff or online – view the Builders and Home Designs link.

 

WHAT ARE THE RULES?
1. You and your family MUST meet the income guidelines below which are based on the number of persons in your household (as set by the Federal Dept. of Housing and Urban Development each year):

*50% of the homes in the program must be sold to households with incomes less than 80% of median income.

2. You MUST obtain your mortgage from a lender that is approved by the City of Iowa City to participate in this program. The participating lenders are: Hills Bank and Trust Company (319-351-8000), MidWestOne (319-356-5850)  and the University of Iowa Community Credit Union (319-341-2119). The mortgages obtained must be at least a 15-year, fixed-rate loan with early pay-off allowed.

3. The homes purchased MUST be one of the participating properties in this program. The list of approved properties is attached. The purchase price of the home can’t exceed the listed sales price.

4. You must be prepared to close on the home at the time required by the seller after issuance of a certificate of occupancy (in no case can closing occur after June 30, 2013).

5. If you are approved for the program and agree to purchase one of the participating properties, the program will pay 25% of the purchase price of the home at the closing.

6. The assistance will be paid in the form of a five-year forgivable loan, and a lien will be placed on the property. The lien will provide that 20% of the original loan balance will be forgiven each year for five years. After five years, the loan is fully forgiven, and the lien will be removed from the property. You may sell the home during the five-year period, but the remaining balance of the loan must be repaid to the City.

7. The home must be your primary residence during the five-year period.

8. Assistance under this program will not be allowed to be combined with any Federal Jumpstart Homebuyer Assistance, State Jumpstart Downpayment Assistance, or other disaster assistance on the same dwelling unit or person/household served.

HOW WILL HOMEBUYERS BE SELECTED?

1. Homes will be sold on a first come, first served basis. Please review the Builders and Home Design link to view the available homes.

2. Please note that 50% of the homes in this program must be sold to households under 80% of median income. If necessary, preference may be given to those under 80% of median income to ensure compliance with the Iowa Department of Economic Development program requirements.

3. Applicants must sign a release allowing the City to verify representations of flood damage with appropriate entities if the homebuyer has previously received any disaster assistance due to the floods of 2008.

4. Income will be verified through tax and income documentation and employment verification.

5. Applications must be complete at the time they are submitted.

6. It will be the homebuyer’s responsibility to comply with all requirements of the City, the lender and the property seller. The City does not guarantee that any applicant will be able to purchase a home.

I’M INTERESTED. WHAT DO I DO NEXT?
1. Please submit an application to the City of Iowa City.

You will need to have a copy of your 2011 tax return (if not ready, submit your 2010 return) and basic financial information available to complete the application.

2. You should meet with a participating lender to determine how much you will be allowed to borrow. A pre-approval loan letter should be submitted with your application.

3. The City will verify your eligibility and income based on information submitted with your application, and if you are not eligible you will be notified immediately.

4. The City will send you a letter to let you know the status of your application and what your next step in the process may be.

5. At the same time, you should also find out as much information as you can about the homes that are eligible for the City’s program to determine if:

• you would be interested in buying one of the homes; and
• you can afford the home, assuming that you qualify for the program.

Information about the homes can be obtained from the participating builders, from the City's Community Development staff or online at www.icgov.org/newhomes.

For additional information please contact Doug Ongie or David Purdy at 319.356.5230; doug-ongie@iowa-city.org or david-purdy@iowa-city.org; City of Iowa City, 410 E. Washington Street, Iowa City, IA 52240.