Looking to buy a home in Durham? A new city program can help with down payments.
People looking to buy their first home in Durham have a new opportunity to get some extra help in a competitive and expensive market.
Qualifying applicants can now receive up to $20,000 in down payment and closing cost assistance through the city’s new Down Payment Assistance program,
The city is partnering with Community Home Trust, an Orange County-based affordable housing organization.
Applications will become available in Englih and Spanish starting Monday, March 28, on the Community Home Trust website.
“Housing prices in Durham have risen dramatically,” Mayor Elaine O’Neal said in a news release. “Our new Down Payment Assistance Program will help bring homeownership within reach for many people who live or work in Durham but are priced out of the current for-sale market.”
The program is focusing on applicants with lower incomes who may be hindered from buying a home due to rising prices.
How the program works
Eligible applicants can receive funds as a forgivable loan with 0% interest rate and a 15-year term on a first come, first served basis until $5.7 million in available funding is depleted, according to Community Home Trust.
The main requirements for the program:
▪ Applicants must have worked or resided in the city of Durham for at least one year before applying.
▪ Applicants must be first-time homebuyers or cannot have owned a home within the last three years, according to federal housing assistance statutes. An exception to the three-year requirement may be made for U.S. military veterans.
▪ Applicants may not own any other real property or have an ownership interest in any real estate at the time of closing. For example, vacation homes, timeshares and vacant land. An exception may be granted in certain cases detailed in the program’s guidelines.
▪ Total household income cannot exceed 80% of the area median income (AMI) for the Durham-Chapel Hill metro area. The AMI limits for the Durham-Chapel Hill area can be found on the U.S. Department of Housing and Urban Development’s website.
HUD considers 80% of the AMI to be $48,400 for one person, $55,330 for two people, $62,200 for three people and $69,100 for four people.
▪ Liquid Assets are limited to $20,000 (does not include pension, IRA, 401K, 529 plans, burial accounts, or life insurance with a cash value).
▪ Only fixed rate mortgages are allowed. Adjustable-rate mortgages and owner financing are not allowed.
An important requirement for the program stated by Community Home Trust is that an applicant household cannot have a student enrolled part-time or full-time in higher education who: is under the age of 24, is not a veteran, is unmarried, does not have a dependent child, is not disabled and receiving Section 8 assistance, is not otherwise individually eligible or has parents who are not eligible for Section 8 assistance and does not live with parents receiving or applying for Section 8 assistance.
Triangle real estate market
The program comes as Triangle home prices climb to record highs and housing inventory drops.
The median sale price in the Triangle region was $374,900 in February this year, according to Triangle Multiple Listing Services.
That median figure is up 24% from last year, The News & Observer reported. Wake County reached a median sale price of $435,000, while Durham County hit $390,000.
Nationally, the median home price was $345,000 in February, according to RE/MAX, the highest figure the real estate company has ever reported.
The city’s Forever Home, Durham program, a $160 million affordable housing fund is providing funding for the Down Payment Assistance program, along with federal HUD funding and Community Development Block Grant programs, according to a news release.
Durham’s $95 million affordable housing bond previously approved by voters in 2019 supports the Forever Home, Durham program.
Prospective applicants seeking more information can visit the program website or contact Community Home Trust Community Engagement and Outreach Coordinator Ivelisse Mercado by email or at 919-967-1545, ext. 302.
Assistance in English and Spanish is available, and translation services can also be arranged for other languages.
