Explanation
BACKGROUND: This ordinance authorizes the Director of the Department of Development to execute a Lender Participation Agreement with numerous, individual lenders who wish to partner with the Department of Development for the American Dream Downpayment Initiative (ADDI) program.
The Department of Development’s ADDI program provides down payment assistance using federal HOME funds or non-federal funds to first time homebuyers whose household income is at or below 80% or 120% AMI, respectively, 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.
The department partners with multiple lenders to provide information about the ADDI program to the lenders’ eligible clients, as defined by program guidelines. Only lenders who have executed a Lender Participation Agreement and whose staff have completed city-created training can recommend clients for the ADDI program. The City does not make payment to the Lender for their participation in this program, nor is the lender a subrecipient as defined in 2 CFR 200. A lender’s participation in this program allows the lender to recommend a potential resource of additional funds to eligible clients who may not be able to purchase a new home without additional financial assistance.
The department evaluates its programs and agreement templates on a regular basis. This review may necessitate program or agreement template changes based upon new federal regulations or process improvements because of a change in best practices or lessons learned. As such, changes to the Lender Participation Agreement may need to be made to reflect these changes. In order to prevent a disruption in the program if a change must occur expeditiously - for which a disruption may result in a first time homebuyer not be...
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