Area first-time home buyers got a big lift with the announcement on Feb. 6 of a $60 million down payment assistance program expected to stoke home sales and stabilize home values in 21 targeted zip codes in West Tennessee including many in the Memphis area.
Tennessee Housing Development Agency executive director Ralph M. Perrey announced the Hardest Hit Fund – Down Payment Assistance (HHF-DPA) program at a press conference in Frayser on Monday.
“This is something we’ve been working on for a long time because we have recognized that there are still neighborhoods in Memphis that have not recovered as fully from the Great Downturn, and we wanted to be a part of that solution and put some dollars together,” said Perrey.
“The idea here that neighborhood investment requires more than investment; it requires the presence of an invested owner.”
The event was held at a once-blighted model home at 3309 Riney Street. Frayser Development Corp. restored the house after it sat vacant for more than nine years and was eventually condemned. The 1,200-square-foot home is now on the market for $64,500.
Home buyers who purchased a home in certain targeted ZIP codes of the city using THDA’s Great Choice Home Loan program can apply for $15,000 in HHF-DPA assistance toward the down payment and closing costs in the form of a forgivable second mortgage loan.
There are no monthly payments on the second mortgage loan during its ten-year term, and it does not accrue any interest. THDA will forgive 20 percent of the second mortgage loan each year starting in year six. Buyers must live in the home and not refinance, sell or move out during the ten years to reap the full benefit.
Another housing assistance program was developed last year by the City of Memphis through the Division of Housing and Community Development, and it allows individuals and families who earn less than 200 percent of the area median income to access up to $10,000 towards the purchase of a new home in 14 ZIP codes in Memphis.
Approximately $500,000 was allocated to support the effort in July of 2016, and the city has already helped more than 65 families purchase homes in the inner city of Memphis.
“We’ve utilized nearly all of the funds for this program in only a few short months,” said City of Memphis Mayor Jim Strickland. “It shows there is a big demand to purchase homes in our community and more resources are needed.
The more stable our neighborhoods become, the more our tax base grows, the more families move into stabilized neighborhoods, educational outcomes increase, and ideally we have less crime and blight due to new homeowners in the community with a vested interest.”