The City of Mount Vernon will begin a home buyer assistance program with East Central Iowa Council of Governments offering an additional $5,000 to qualifying candidates for home purchases in Mount Vernon.
The program is looking to aid more low to moderate income housing purchases in the community.
The housing commission has been working at this program for the past several months.
“The housing commission has done a wonderful job coming up with this program,” said Chris Nosbisch, Mount Vernon city administrator.
According to the report from ECICOG and The Mount Vernon Housing commission, the city has a number of homes that would be affordable to LMI individuals. To qualify for the program, individuals must have an income of less than or equal to 80 percent of the area median income, and the assistance would be a 5-year forgivable loan of up to $5,000.
The assistance for LMI individuals will help them make the down payments for homes. LMI individuals can afford monthly payments for homes, but can struggle with the down payment. There are also additional programs open to individuals making less than 80 percent of the area median income.
The loans will draw on monies in TIF residential districts to provide the $5,000 loans. These loans can be used to cover closing costs, escrow payments and down payments for a new home.
Houses have to be under $250,000 and a single family home, town home, duplex or condominium.
Applications will be available on the city’s website. The loans will be awarded on a first-come, first-served basis. People who apply for the $5,000 will have 90 days to find a home for purchase (with a 30-day extension granted on application as well).
Nosbisch said the hope at the moment is to see one or two applicants per year, but TIF funding that could be used for low to moderate income housing could fund upwards of five of these applications a year.
“This isn’t a federal program, and if we find that our local banks tell us that we could see more applicants if we were to increase the program to support another $2,500, we could easily do that,” Nosbisch said.
While the $5,000 doesn’t have to be repaid, there are stipulations that people live in the home for five years to get that forgiveness. If people do move or sell the home earlier than that five year mark, there is some clawback to get some of the dollars reimbursed for the city
The Area Median Income for all households in Linn County in 2021 was $64,903. Larger households would qualify for eligibility for TIF funded programs.
According to the housing commission, there are approximately 475 homes in Mount Vernon with a market value of less than $250,000. A total of 40 of the 74 homes sold in 2021 in Mount Vernon sold for less than 250,000, and 28 sold for less than $200,000.
ECICOG will help manage the program.
Council member Stephanie West noted that this is something that has been desired in Mount Vernon for the last decade.