Explanation
BACKGROUND: This ordinance authorizes the Director of the Department of Development to execute a commitment letter, loan agreement, promissory note, mortgage, and/or restrictive covenant with individual homebuyers who access the Department of Development’s American Dream Downpayment Assistance (ADDI) program using non-federal funds.
The Department of Development provides down payment assistance using federal HOME funds to first time homebuyers whose household income is at or below 80% AMI for the purchase of a home in the City of Columbus. The amount of assistance provided is the lesser of 6% of the purchase price or $7,500.00 and is provided as a forgivable loan. The household must remain in the home for a period of five years for the loan to be forgiven.
In addition to HOME funds for this program, the Department of Development is expanding the program to use non-federal funds in order allow for applicants up to 120% AMI. The use of non-federal funds also reduces the time it takes to review/approve an application as specific HUD required documents are not needed. These funds would be in the form of a loan and the household must remain in the home for a period of five years in order for the loan to be forgiven.
Ordinance 2768-2022, approved by Columbus City Council on November 7, 2022, authorized the Director of the Department of Development to enter into a non-for-profit service contract with the Tony R. Wells Foundation to act as the fiscal manager of the non-federal ADDI funds and dispense the funds as directed by the City.
This ordinance is a companion piece to Ordinance 2768-2022 in that this ordinance will authorize the director to execute the necessary documents for the non-federally funded ADDI program.
Emergency action is requested in order to allow those seeking down payment assistance to obtain it in a timely manner and maintain their closing schedules.
Fiscal Impact: no funding is needed for this ordinance.
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