Contact: Derrick Pryor (click name to e-mail) 

614-645-2588

2009 Program Guidelines

The Housing Development Program is designed to foster homeownership within the Neighborhood Investment Districts in Columbus. The program provides development gap financing of up to $30,000 per unit in the form of a forgivable loan. This provides an incentive for developers and/or builders rehabilitate or construct houses for income qualified homebuyers to be able to afford homes in the older City. Applicant and property criteria for participation in this program are outlined below.

The City receives funds from the U.S. Department of Housing and Urban Development (HUD) to conduct activities that are in compliance with the HOME Investment Partnerships Program with regulations at 24 CFR Part 92.

Geographic Information

Projects must be located within one of the Neighborhood Investment Districts (NIDs). (Area A Linden; Area B North of Broad to I-670; Area C South Side; Area D Hilltop; Area E South of Main; Area F Weinland Park; Area G Franklinton) Click here for NIDs area boundary descriptions.  A non-profit certified as a Community Housing Development Organization (CHDO) can develop anywhere within their established boundaries.

Eligible Property

Single family residences, which will serve as the principal residence of the prospective homeowner, are eligible. Priority will be given to projects with three or more units. Rental properties are ineligible. 

Property Value Limitations

The selling price and the appraised value of all properties used in this program cannot exceed 95% of the median purchase price for the area as determined by HUD or FHA 203 (b) mortgage limit.

Eligible Activities

Eligible activities include acquisition/rehabilitation and soft costs; new construction with acquisition and soft costs; and affordability gap financing for the homebuyer. Construction must begin within six (6) months of loan closing.  

Eligible Applicants

Non-profit developers are eligible to apply. Projects should consist of 3 or more units. The number of units can be waived if the applicant demonstrates and the City determines that the smaller project will have a positive impact on the neighborhood. 

Financing Guidelines

Financing may be a combination of a Development and/or an Affordability Gap. The total maximum loan amount per housing unit of Development and Affordability Gap combined is $30,000. The city may consider larger gap financing amounts if the applicant can demonstrate financial need based on construction costs, appraisal values, and/or buyer affordability need. In no case will the city's total HOME Investment Partnerships Program funds including any downpayment assistance exceed $40,000. Also, a minimum of $1,000 in affordability gap subsidy is required as part of the project structure when there is a development gap only funding request.

Development Gap is the difference between the development cost of the unit and the appraised value of the unit and the appraised value of the unit prior to construction or rehabilitation.the actual Development Gap is determined at the point of sale.

An Affordability Gap is the difference between the mortgage obtainable by the homebuyer and the required funds needed to close. The Affordability Gap is determined by the point of sale.  A liscensed appraiser must determine this value.

• Developer/Builder Forgivable Loans
  • Maximum Developer Loan Limits: up to $30,000 per unit may be loaned for the purpose of a Development Gap.
  • Term: deferred 24 months
  • Interest Rate: Five percent (5.0%) interest will accrue and compound annually if the unit is not sold within the 24-month period to a qualified homebuyer or is sold to a market-rate buyer.
  • Repayment: No repayment of the Development Gap principal or accrued interest will be required if the property is sold within 24 months from the date of initial closing, to a buyer that meets the qualifications outlined in Income Qualified  Homebuyer Forgivable Loans below.

Repayment of the principal and accrued interest is required if the property is not sold to an eligible homebuyer within 24 months of the date of initial closing or the unit is sold to a market-rate buyer. Principal and accrued interest will be due in full.

Eligible Costs and Disbursements of Funds

• New Home Construction and Rehabilitation eligible costs may include but not limited to: site acquisition; loan origination fees; credit reports; title reports and updates; recordation fees; preparation and filing legal documents; appraisal; attorney fees; loan processing fees; architectural fees; engineering fees; preparation of work write-ups/cost estimates. A Notarized Cost Analysis and Certificate of Occupancy are required to release the project contingency funds. Funds will be disbursed as a percentage of the construction costs. Receipts and documentation must be provided to verify costs. Lien Waivers may be required. Construction must begin six (6) months from the date of agreement signing.

Additional Obligations for Funds

• Relocation Review: Applicant must obtain Seller/Owner's acknowledgement of fair Market Value before closing (a Notice of Acquisition) and the Seller/Owner's Certification of No Displacement.
• Historic Review: Clearance must be obtained from the City of Columbus Historic Review Officer. The rehabilitation must comply with Section 106 standards set by the Secretary of the Interior. 
• Environmental Review: Phase 1 Environmental Site Assessment must be provided when applicable. The project must receive Environmental Review clearance from the city of Columbus, as defined by the National Environmental Policy Act, which includes a Historic Preservation Review. 
• Lead Based Paint Hazards: Work on properties that were built prior to 1978 must comply with Title X rules and regulations, as well as applicable state lead paint laws. The cost and scope of rehabilitation work determines what inspections and interventions will be required.
• Code Inspection/Occupancy Permit: All projects must have building permits, pass a building code inspection and receive a final Certificate of Occupancy prior to final draw.

Community Consultation

Applicants are required to submit their applications to the appropriate Area Commission or Civic Neighborhood Association for disclosure and review prior to submission to the Department of Development. For assistance identifying the appropriate organization, contact Michael Puckett at 645-3219 (click here to e-mail).  For your Neighborhood Liaison contact information and area map, click here.  There may be several civic or neighborhood associations to meet with. Be advised that the Area Commission process can take 2-3 months. 

Eligible Home Buyers

Households with annual gross income at or below 80% of the area median income (AMI) adjusted for household size as defined by the U.S. Department of Housing and Urban Development (HUD). Homebuyers may be eligible for the American Dream Downpayment Initiative (ADDI) Program if they are a first time homebuyer. Total household income is used when calculating annual gross income.

• Qualifying Ratios: Total household expenses (principal, interest, taxes, and insurance) must not exceed 35 percent of the monthly household income and total monthly debt service must not exceed 45 percent of the monthly household income. Fixed rate financing only.
• Homebuyers purchasing a home assisted with HDP dollars must receive Homebuyer Education provided by a city of Columbus Certified Homebuyer Education Agency which includes:
  • Counseling before the purchase of the property;
  • Assisting first-time homebuyers in identifying the most suitable and affordable properties;
  • Providing homebuyers with financial management assistance;
  • Assisting homebuyers in understanding mortgage transactions and home sales contracts;
  • Assisting homebuyers with eliminating and credit problems that may prevent them from purchasing the property; and,
  • Home maintenance training.
  • Click here for a list of city of Columbus Certified Homebuyer Education Agencies.

A certification of completion of the Homebuyer Education Program must be submitted to the city of Columbus prior to closing and expires one year from the date the course was completed.

2009 HUD Income Guideline - 80% Area Median Income
Family	One	Two	Three	Four	Five	Six	Seven	Eight
Yearly Income	$38,450	$43,900	$49,400	$54,900	$59,300	$63,700	$68,100	$72,450

• Income Qualified Homebuyer Forgivable Loans
  • Maximum Homebuyer Affordability Gap Loan Limits: up to $30,000. The loan amount will also consist of any additional City assistance to acquire the property such as downpayment assistance from the American Dream Downpayment Initiative (ADDI)
  • Term: 5 years for loans less than $15,000; 10 years for loans $15,000 to $30,000
  • Interest Rate: Zero percent (0%) per annum
  • Repayment is not required if:
    • The initial homeowner remains an owner/occupant of the property for the term of the loan (affordability period); and,
    • The initial homeowner executes at closing, a non-amortizing, non-recourse, non-interest bearing Promissory Note (Note), Loan Agreement, Mortgage, and Restrictive Covenant (for affordability). The outstanding Principal balance of the Note remains the same as the amount stated at the time of closing until the end of the affordability/loan period.
  • Repayment is required if:
    • The initial homeowner, prior to the end of the affordability/loan period as defined by the Note, sells the property. The outstanding principal balance will be due in full at the time of the sale; or the initial homeowner ceases to occupy the property as an owner/occupant. The outstanding Principal balance will be due in full once the original homeowner/recipient of HOME assistance ceases to occupy the residence.
    • If at the point of sale, the net proceeds from the sale are not sufficient to repay the loan, the net proceeds will be divided proportionally based on the amount of HOME investment and the homeowner investment. However, the homebuyer is permitted to recover their entire investment (downpayment and capital improvements made by the owner since the purchase) before the city receives its portion of the HOME investment.

City Reservation of Rights

The City of Columbus reserves the right to waive the provisions of these guidelines within the limits of the Federal HOME, CDBG, City and State regulations in order to advance its mission and the goals of the Consolidated Plan. Such waiver shall not be construed as a general set-aside of the provisions and is at the sole discretion of the Director of the Department of Development. 

These guidelines outline the basic funding requirements of this program and are not meant to be all-inclusive. The funds for this program are limited. As such, they will be available on a first-come, first-served basis.