In the latest effort by city officials to protect and preserve housing that’s within financial reach of everyday residents, the city of St. Paul is offering downpayment assistance to moderate-income home-buyers.
St. Paul is hardly the first city to offer home buying help, but the city’s assistance program is generous to lower-income earners.
In the Twin Cities, many downpayment assistance programs are targeted to families earning up to 80 percent of area median income, and top out around $15,000 in assistance.
In St. Paul, qualified home-buyers — those earning no more than 60 percent of area median income — can receive up to $40,000 for a home downpayment, closing costs and property inspection. The properties, which must be in designated census tracts, must become owner-occupied.
‘ABOUT BUILDING WEALTH’
The program represents the city’s latest effort to keep non-subsidized or “naturally occurring” affordable housing from being snatched up and converted into pricier units in neighborhoods vulnerable to gentrification.
The effort is funded by $1.5 million from the city’s $10 million Housing Trust Fund and Minnesota Housing.
“This is program is about building wealth, and aligning with the values of the city of St. Paul,” said City Council President Amy Brendmoen on Thursday.
The downpayment assistance is mostly structured as a no-interest loan, with payment deferred for up to 30 years, or until the home is sold. Grant funds may cover property inspections.
To qualify, home-buyers can have no more than $25,000 in net assets and earn no more than 60 percent of area median income. That’s currently equivalent to $43,440 for an individual and $62,000 for a family of four.
The buyer must register the property with Ramsey County as a homestead. The maximum purchase price is $256,000 for a single-unit property or $328,000 for a duplex.
NOAHS CAST A WIDE ARC
Nationally, the fate of naturally occurring affordable housing, or NOAHs, have become a key aspect of housing discussions that were once more focused on production of new subsidized units.
The Metropolitan Council has found that the Twin Cities metro lost 1,300 non-subsidized units annually from 2010 to 2017. In other words, the Twin Cities during that time lost more affordable housing than was created.
In St. Paul, members of the city council have raised alarm about national and international investors buying cheap housing with the intent of creating pricier units, or adding steep rental restrictions such as hefty move-in fees, criminal history and credit checks.
Before now, much of the city’s housing focus has been on affordable rental housing. In 2018, a city-led housing work group delivered a wide-ranging fair housing report to the city council that called for the preservation of existing affordable units over the production of new ones in poor neighborhoods.
In response, the city launched the 4(D) tax incentive program — a lower tax classification for landlords who agree to keep rents low for 10 years.
In November, the city council dedicated $3 million toward a $300-per-month rent subsidy for 250 low-income families. To qualify, families must have children in any of seven St. Paul Public Schools and pay at least 40 percent of their income toward rent.
The St. Paul City Council on Wednesday approved a broad set of residential tenant protections that include requiring landlords to explain in writing why they have chosen not to renew a lease.
For more information about the downpayment assistance program, visit stpaul.gov/Downpayment-Assistance.
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July 10, 2020 at 12:10AM
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City of St. Paul offers moderate-income homebuyers up to $40,000 in downpayment assistance - TwinCities.com-Pioneer Press
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