Single-Family New Construction Program

Round 2

The City of Iowa City is offering downpayment assistance of up to 25% of the purchase price of 37 newly constructed homes in Iowa City. This assistance is offered in the form of a five year, forgivable loan which will be used to buy down the amount that you borrow for the home.

June 28, 2010 Program Update: The deadline for applications was 5:00 p.m. Friday, June 25, 2010. Applications will continue to be collected and placed on a waiting list. In the event that homes remain for sale after processing the initial applications (applications received before the June 25 deadline), applicants will be pulled from the waiting list in the order in which their completed application was received, and they will be given the opportunity to participate in the program.  

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):

Family Size	Gross Income Must Not Exceed (Median Income)	80% Median Income*
1	$54,500	$43,600
2	$62,300	$49,800
3	$70,100	$56,050
4	$77,800	$62,250
5	$84,100	$67,250
6	$90,300	$72,250
7	$96,500	$77,200
8	$102,700	$82,200

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

2. Applications received before the June 25, 2010 deadline were ranked on a priority basis as identified on the application. Applicants may continue to submit an application if interested in the program. In the event that homes remain for sale after processing the initial applications (applications received before the June 25 deadline), applicants will be pulled from the waiting list in the order in which their completed application was received, and they will be given the opportunity to participate in the program.

3. 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.

4. The homes purchased MUST be one of the participating properties in this program. The list of approved properties is attached. The availability of your preferred property will be determined by your application ranking. The purchase price of the home can’t exceed the listed sales price.

5. 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 December 31, 2011).

6. 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.

7. 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.

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

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

HOW WILL HOMEBUYERS BE SELECTED?

1. Applications became available on May 25, 2010 and will continue to be accepted until all 37 homes in this program are sold. Applications must be submitted to the Housing Trust Fund of Johnson County.

2. Applications received prior to June 25, 2010 were ranked according to the following priorities:

• First priority will be given to Iowa City residents who are on the City’s proposed Buyout Program list.
• Second priority will be given to those who were Iowa City residents and whose primary residence was more than 50% damaged by the 2008 flood waters.
• Third priority will be given to those who were Iowa City residents and whose primary residence was less than 50% damaged by the 2008 flood waters.
• Fourth priority will be given to first time homebuyers.
• Fifth priority will be given to those who are Johnson County residents.

In the event that homes remain for sale after processing the initial applications (applications received before the June 25 deadline), applicants will be pulled from the waiting list in the order in which their completed application was received.

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.

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

5. Applications must be complete at the time they are submitted. Depending on the number of applications received, the City reserves the right to resolve priority ties by lottery or drawing.

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, even those in high priority groups, will be able to purchase a home.

I’M INTERESTED. WHAT DO I DO NEXT?
1. First, you will need to submit an application to the Housing Trust Fund of Johnson County (HTFJC). You will need to have a copy of your 2009 tax return and basic financial information available to complete the application.

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

3. After all applications are received, the HTFJC will send you a letter to let you know where your application is ranked and what your next step in the process may be.

4. In the meantime, you MAY meet with a participating lender to determine how much you will be allowed to borrow.

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 Housing Trust Fund of Johnson County or online at www.icgov.org/newhomes.

For Additional Information:

Please contact Tracey Achenbach
Housing Trust Fund of Johnson County
319.358.0212
tachenbach@htfjc.org
www.icgov.org/newhomes