City program aims to increase home ownership

8 years ago

City program aims to increase home ownership

IN THE CITY
By Ken Arndt

    For the past several months, the city of Presque Isle has been discussing and considering the establishment of a “Home Owners Assistance Program” designed to encourage the purchase of a primary residence within our community. This program is strictly a pilot program and its goal of increasing home ownership will be re-evaluated at the end of fund disbursement.

In late August, the city administration introduced the home buyer’s incentive program to local realtors and banking institutions and sought their help in getting this initiative underway. The City Council authorized the pilot program and set aside $100,000 to fund it.
The major components of the program are as follows:
– The Presque Isle Home Owners’ Assistance Program (PIHOAP) is a pilot program designed to see if a small investment by the City would assist people with the purchase of homes in the community and thereby will stimulate more activity in the housing market. When the available funding that has been dedicated and expended ($100,000) the program is no longer available.
– The program is available to any applicant(s) that will be purchasing an existing home or building a new home within geographical boundaries of the City of Presque Isle. The purchased home must become the person(s)’ primary residence.
– To be eligible, the applicants must secure primary financing from one of the approved banks and/or credit unions doing business in Presque Isle.
– PIHOAP will assist applicants with loans up to a maximum of $5,000 or 50 percent down payment, whichever is less for an existing home purchase.
– PIHOAP will assist applicants up to a maximum of $7,500 or 50 percent down payment, whichever is less for a construction of a new home or purchase of a newly constructed home.
– The City will place a second mortgage on the home. Said mortgage (or some other legal instrument) will require no payments back to the City so long as the applicants and/or homeowners continue to live in the home and it serves as their primary residence and the property is not sold or transferred for a period of 10 years. At the conclusion of the 10 years, without either event occurring, the mortgage will be forgiven and discharged.
– If the applicants sell or transfer the home or no longer lives in the property and/or declare it no longer their primary residence prior to the completion of the year, then the mortgage shall be paid back, plus accumulated interest. The mortgage amount shall be forgiven by a factor of 0.83 percent per each full month that the applicants have complied with the requirements.
– Qualified lending institutes shall apply to the Presque Isle Office of Planning and Development to become a certified participant in PIHOAP. To be eligible, lending institutions shall have a physical office located in Presque Isle. They must agree to comply with the rules and regulations of the program.
Already, in just a month of the program’s availability, the local banks and the City have made housing loans to three new home buyers.
    Ken Arndt is Presque Isle’s director of planning and development. He can be reached at 760-2727 or via email at karndt@presqueisleme.us.