HomeMy WebLinkAboutIR 23-1772 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-1772
To the Mayor and Members of the City Council December 5, 2023
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SUBJECT: HOMEBUYER ASSISTANCE PROGRAM POLICY CHANGE
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Since 1997, the City's Homebuyer Assistance Program (HAP) has assisted low- and moderate-income
households with affordable homeownership by providing deferred forgivable loans to reduce down payment
and closing costs associated with the purchase of a house. Households whose income is at or below 80
percent of Area Median Income (AMI), set annually by the United States Department of Housing and Urban
Development(HUD), are currently able to receive a HAP loan of up to $20,000.00
Due to historically low interest rates,improved lending climate and population growth,the City served about
100 to 150 households with down payment and closing cost assistance prior to 2014. From 2014 to 2017 the
City served an average of 62 households. Staff met with lenders and real estate agents and based on the
discussions and recommendations, decided to make several changes to the policy and guidelines at the time
to help more citizens to own homes. Staff also determined that the City's current HAP guidelines were more
stringent than those of other cities and counties.
In 2018, staff briefed the City Council's Housing and Neighborhood Services Committee about this proposal
on October 30,2018, and the committee voted on that date to recommend it for approval by the full Council.
Staff recommended the following changes to the City's HAP policies and guidelines:
1. Eliminate the current tiered maximum assistance based on family size and raise the maximum
assistance to $20,000.00
2. Lower the minimum housing ratio from 20%to 10%.
3. Change the housing ratio(front end ratio)from 30%to 32% and debt ratio(back end ratio)from 41%
to 43%.
4. Add a housing ratio of 35% and debt ratio of 45%for homebuyers with credit scores at or above 620.
5. Eliminate the current cap of$3,000.00 for closing cost assistance and change it to three percent of the
loan amount.
6. The loan term will be 10 years if the assistance amount is over$14,999.00. The first $14,999.00 of
the loan will be forgiven after five years. Twenty percent of the remaining loan amount over
$14,999.00 will be forgiven each year on the anniversary of years six through ten of the loan terms.
Mayor& Council Communication (M&C) G-19413 was approved by City Council on Tuesday,November
6, 2018.
Due to the real estate market,high sales prices and population growth,the City has served an average of 243
households over the last five years with down payment and closing cost assistance. This has resulted in a
request for an additional increase in the maximum HAP assistance amount. Staff briefed the City Council's
Neighborhood Quality and Revitalization Committee (NQRC) about this proposal on October 10, 2023, and
the committee voted to recommend it for approval by the full Council.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 23-1772
To the Mayor and Members of the City Council December 5, 2023
Page 2 of 2
SUBJECT: HOMEBUYER ASSISTANCE PROGRAM POLICY CHANGE
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Number of Homebu ers Assisted
Year General Habitat Total Total
Homes Homes Assisted Expenditures
2018-2019 49 28 77 $1,348,228.00
2019-2020 49 24 73 $1,098,049.00
2020-2021 14 20 34 $477,655.00
2021-2022 5 24 29 $443,974.00
2022-2023 1 17 1 30 1 30 1 $452,851.00
134 109 243 $3,820,757.00
Average Assistance Provided
Year General Homes Habitat Homes Total Average
2018-2019 $17,291.00 $17,892.00 $17,509.00
2019-2020 $13,940.00 $17,291.00 $15,042.00
2020-2021 $14,542.00 $16,388.00 $15,408.00
2021-2022 $15,799.00 $14,999.00 $15,309.00
2022-2023 $15,168.00 $14,999.00 1 $15,095.00
$15,348.00 $16,314.00 $15,673.00
Ave rage Purchase Price
Year General Homes Habitat Homes Total Average
2018-2019 $168,895.00 $123,494.00 $152,385.00
2019-2020 $186,389.00 $127,583.00 $167,056.00
2020-2021 $180,062.00 $139,417.00 $156,451.00
2021-2022 $213,760.00 $170,000.00 $177,545.00
2022-2023 $198,453.00 $161,857.00 $182,595.00
$189,512.00 $144,470.00 $167,206.00
Funding Source: HOME Investment Partnerships Program
Staff has recommended that the maximum assistance for down payment and closing cost assistance be
increased from $20,000.00 to $25,000.00. This proposal will be presented to City Council on Tuesday,
December 12, for consideration and approval.
For additional information about this topic,please contact Victor Turner, Director of the Neighborhood
Services Department, at 817-392-8187.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS