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Council to Review City’s Home Ownership Program Rules

Home ownership

In tomorrow’s work session, the City Council will discuss a review of the home ownership program to attract more professionals to live in College Park and replace the foreclosed or rental houses into owner – occupied houses.

The program started back in 2006, however went through couple of changes. Back in summer last year, it was also expanded to include volunteer firefighters working in the city as the eligible persons to receive the grant. The maximum amount of grant was also increased from $5000 to $7500.

Three issues have arisen lately with regard to the implementation of the program which the council will be discussing in tomorrow’s working session.

1. The amount of the grant that can be awarded. The program allows for a grant of up to $7500.00 for qualifying properties, to be used at settlement. For certain categories, this amount was $5,000.00 at one time, but all qualifying properties are now entitled to the same amount under the policy. No criteria have been provided to staff to determine whether a grant amount less than the maximum should be awarded. As a result, in past years, the full amount was awarded to any qualifying property. Two years ago, a determination was made during budget discussion by Council to limit the grant awards to $5,000.00. The grant policy itself was not amended. In the past year, staff has continued to rely upon the instruction from the prior budget year in awarding $5,000.00. Staff is seeking guidance as to what the level the grant award should be ($5,000 or $7500) and, if the Council wishes to allow for staff to exercise discretion in awarding something less than the maximum, that the Council decide upon the criteria for that  discretion.

2. Awarding a grant to an individual not otherwise in good standing with the City. The current policy does not prevent an individual from applying for and receiving a grant if that person is not otherwise in good standing with the City. For example, a person who has failed to acquire a required City permit or who has outstanding code violations could apply for and receive a Home Ownership Grant. If the Council wishes to require that anyone receiving a grant from the City be required to be in good standing in order to be eligible, the policy should be amended.

3. HUD Foreclosure requirements. An application for the Home Ownership Grant was recently received that involves HUD. This agency is requiring a certain provision to appear in all loan documents, including the City agreement. Please see attached document. If the provision is not included, HUD backed financing will not be provided. The provision states that, in the event of a foreclosure, any provision restricting the use to low or moderate income housing, or otherwise restricting the owner’s ability to sell the property, is void with respect to subsequent buyers. I believe this wording could affect the enforcement provisions in the agreement, specifically the ability to add any unpaid amount to the property tax bill.

Please let me know what you think.

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