Greensboro had an unusual problem last year, it had money it couldn’t give away.
The city had a down payment assistance program for first time home buyers with money in the form of forgivable loans, but in 12 months it only made 17 loans. When the loans are zero interest and forgiven after five years, you wouldn’t expect to have a problem attracting borrowers, but the city did.
However, the Neighborhood Development Department figured out the problem and last year the Greensboro City Council approved the changes to make the program work.
The result is the Neighborhood Development Department recently announced that the program had made its 187th loan which means they made 170 more loans in the past year than in the previous year.
Stan Wilson, the director of the Neighborhood Development Department, said “To say our revamped program has been a success, is an understatement.“
He added, “The numbers tell an amazing story and it’s particularly gratifying considering June is National Homeownership Month.”
The problem in simple terms turned out to be the income requirements to qualify for the loans was so low that those who qualified for the down payment assistance loans often weren’t in the market for a house and had difficulty qualifying for a mortgage.
So the income level was raised and the result is 170 Greensboro residents who were not home owners last year are home owners today.
All 187 people who have participated in the program were first time home buyers and 112 of them have children.
Last year the City Council approved raising the maximum income levels for the program to include the moderate-income level and it appears that is what made the difference.
The program loans the first time home buyer who qualifies up to $10,000 for a down payment. The home buyer is required to pay at least $500 toward the down payment and the loan from the city is zero percent interest and 20 percent is forgiven for each year the home buyer owns the home, so after five years the loan from the city is 100 percent forgiven.
The down payment assistance program is only available for a person’s primary residence and for first time home buyers. There is an additional $5,000 available for those who purchase homes in Greensboro’s redevelopment areas.