July 25, 2019
Pilot Program for Middle Income Downpayment Assistance
On July 23 the City Council agreed on guidelines for a $10 million pilot downpayment assistance program designed to help middle-income residents buy homes. The pilot is part of the City’s 2016 Middle Income Housing Strategy and resulted from a proposal crafted by Councilmembers Bob Yates and Sam Weaver.
The program is designed to help prospective households who make up to 120 percent of the area median income (AMI) or between $82,000 – $123,000 ) for a three-person household. It will require the homebuyer to put down five percent on the cost of a home and the City will provide a loan of up to $200,000 or 23 percent of the home value in return for placing a deed-restriction on the home along with a two percent cap in appreciation. https://bouldercolorado.gov/boulder-measures/affordable-housing-dashboard
The Council was asked to provide direction on several policy points. The first decision related to the amount of appreciation a homeowner would be allowed to recoup. They decided on two percent, recognizing that the percentage might have to increase if no residents apply because of the low appreciation cap.
The second decision involved the type of debt the City should utilize to fund the seven-year pilot program. Per staff’s suggestion, the Council agreed that a line of credit would be the best option because the City will only need to borrow based on the number of successful applicants. TABOR (Taxpayer Bill of Rights) requires the City to put the issue to the voters and staff was directed to draft ballot language, presumably for the November election.
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