HomeMy WebLinkAbout111-96 RESOLUTIONCITY OF FAYETTEVILLE
COMMUNITY DEVELOPMENT
HOME BUYER PROGRAM
GENERAL PROVISIONS
The Community Development Division (CD) of the City of Fayetteville has allocated funds to
provide affordable housing to low and moderate income persons. The funds are to be used to
acquire and rehabilitate substandard housing that will be sold to eligible persons or families. The
homes will be acquired from those that are available for sale on the real estate market; only
owner -occupied or vacant homes will be eligible. The goals of the program are to provide safe,
decent housmg to low and moderate income families at an affordable pnce and to upgrade the
existmg housing stock m low and moderate income neighborhoods.
Rehabilitation of the dwellings will be completed while they are vacant and will follow the policies
and procedures for the existmg CD housing rehabihtation program. Eligible families may look at
the homes before rehabilitation is complete but the formal sales process will not begin until after
rehabilitation is complete. Prospective home buyers will be responsible for obtaining mortgage
financing from a conventional lender. After loan closmg, the keys to the house will be turned over
to the new home owner. Each home will cavy a one-year warranty on the items mcluded m the
rehabilitation.
AFFORDABLE PRICES
The selling price of the homes will be dependent upon the appraised value of the home after
rehabilitation and on each family's mdividual income and debt situation. If a family does not
qualify for a loan for the full value of the home but is otherwise ehgible, the CD office will
provide a deferred loan for the difference m the loan amount and appraised value.
The deferred loan requires a hen on the property (sometimes referred to as a "soft second"
mortgage) for a period of 10 years. The deferred loan is only repayable if the family sells the
home within this time period. At the end of the 10 -year term, the deferred loan will be forgiven
and the hen released.
It is important to remember that the family's monthly payment will include principal and interest
on the loan amount that they can afford In nearly all cases, the monthly payment also includes
amounts for payment of taxes and home owner's insurance premiums that are paid by the
mortgage company or bank once a year
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Here is an example of the how the program will work:
City acquires house $25,000
City rehabihtates house $20,000
Total Cost $45,000
Bank Loans Family X $40,000
Deferred Loan Amount 5,000
Total Indebtedness
of Family X Years 1-10 $45,000
SELECTION OF HOUSES
The houses selected for the program will be chosen based upon on pnce more than location. All
houses must be located withm Fayetteville city hnuts, but otherwise, any neighborhood in the city
will be eligible. We will also try to match the size of the homes to the needs of the family.
ELIGIBILITY
Program eligibihty is based upon the gross annual income of all family members 18 years of age or
older. The income limits are based upon total number of persons livmg in the family. The limits
are.
Interested persons may request an apphcation by calling the Community Development Office at
575-8261 or 575-8260. If it becomes necessary to develop a waitmg list for eligible famines,
eligible applicants will be placed on the waiting list based upon the date the application is
complete. An application is complete when all information needed to determine eligibility has
been received by the Community Development Office.
1 Person
2 Persons
3 Persons
4 Persons
5 Persons
6 Persons
$20,150
$23,050
$25,900
$28,800
$31,100
$33,400
Interested persons may request an apphcation by calling the Community Development Office at
575-8261 or 575-8260. If it becomes necessary to develop a waitmg list for eligible famines,
eligible applicants will be placed on the waiting list based upon the date the application is
complete. An application is complete when all information needed to determine eligibility has
been received by the Community Development Office.
RESOLUTION NO. 111- 9 6
A RESOLUTION AUTHORIZING THE MAYOR AND CITY
CLERK TO EXECUTE REAL ESTATE SALES CONTRACTS
IN THE AMOUNT OF $50,000, PER CONTRACT, FOR THE
COMMUNITY DEVELOPMENT AFFORDABLE HOUSING
PROGRAM.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council hereby authorizes the Mayor and City Clerk to
execute real estate sales contracts in the amount of $50,000, per contract, for the Community
Development affordable housing program. A copy of the program plan is attached hereto
marked Exhibit "A" and made a part hereof.
PASSED AND APPROVED this 15th day of October , 1996.
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ATTEST2
By: %/1,��'[,��
Traci Paul, City Clerk
APPROVED:
By:
red Hanna, Mayor