RALEIGH, N.C. (WNCN) – Amid rising interest rates and rising costs of homes in the Triangle, it’s become increasingly difficult for the average person to buy a home.
In 2020, Raleigh voters approved an $80 million affordable housing bond to support homeownership and home repair programs for low and moderate income households.
Over the next four years, $12 million from the 2020 bond is budgeted for homeownership programs. That includes $1.5 million per year for homebuyer down payment assistance.
The city is focusing on using bond funds in areas near the planned Bus Rapid Transit routes and other transit investments to in an effort to support housing near transportation access points.
Staff estimate the program could help up to 30 first-time homebuyers per year, or a total of 120 buyers over four years.
City staff have now drafted proposed eligibility requirements and guidelines for the down payment assistance program.
To be eligible for the Bond Homebuyer Assistance Program, city staff recommend applicants be first-time homebuyers who earn no more than 80 percent of the area median income. Properties must be single-family homes located within a defined geographic areas near planned BRT corridors and certain other public projects like the Dix Edge Area.
Eligible applicants would receive a maximum assistance of up to 20 percent of the home purchase price not to exceed $60,000. Homes must not cost more than $450,000.
The loan terms would be as follows:
- 0% interest, 30-year term
- 50% of the principal amount is forgiven over 10 years
- 50% of the principal amount is deferred until maturity at which point the balance is due and payable
The city says to mitigate value inflation of homes, buyers who re-sell their homes within 10 years will have to pay the difference between what the home resells for and the price at which they originally bought it. Those repaid funds would be reinvested in affordable housing initiatives, under the proposed program.
City council will hear the proposed program rules at Tuesday’s council meeting. No vote is expected on the issue.