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Accommodation in Charlotte
Zoom on the real estate market, affordability and advice to buyers.
The cost of owning a home in Charlotte has increased so much lately that it can be a challenge for those who need a little extra help finding their place in the market.
Saving for a down payment is a major barrier to home ownership, according to the Urban Institute, which found that 68% of renters surveyed identified it as a barrier. Programs like House Charlotte aim to remove this barrier for low to moderate income families through forgivable loans that can be used for a down payment and closing costs.
But in a real estate market like Charlotte’s, where the median selling price of a home for the metropolitan area exceeds $ 300,000 and available housing is scarce, finding housing to use this assistance can be more difficult.
In response, city officials are considering increasing the maximum purchase price of a home under the program – currently $ 245,000 for an existing home and $ 300,000 for new construction – as well as the amount of money. available for down payments.
Repayable loan for down payment
The House Charlotte program and a similar municipal program specifically for teachers, firefighters and other âcommunity heroesâ offer down payment assistance in the form of forgivable loans.
Depending on household income, the neighborhood where they are buying and other eligibility criteria, buyers can receive up to $ 17,000 to use for a down payment, closing costs or the purchase of a rate. reduced interest. That goes up to $ 30,000 for the Heroes Program, which also currently has a higher maximum purchase price: $ 300,000 for existing homes or new construction.
Buyers must live in the house as their primary residence and stay there for at least five, 10 or 15 years, depending on the loan amount.
The programs are administered by the non-profit DreamKey Partners, an affordable housing developer who also manages the COVID-19 rent and mortgage relief program in Mecklenburg.
While the number of administered loans hovered around 300 per year between 2018 and 2020, recipients of these loans are heading to the upper end of income limits.
The bulk of the program’s funding goes to households earning up to 80% of the region’s median income, or $ 67,350 for a family of four, although some funds are available for higher-income families, including including the community heroes program.
Julie Porter, president of DreamKey Partners, attributes this in part to the rise in home prices in recent years.
The program’s data also reflects this trend: The average selling price of homes for loan recipients has also increased, from nearly $ 170,000 in 2019 to just over $ 190,000 in 2020.
Help with buying a home
Last year, city officials increased the maximum price of homes eligible for down payment from $ 200,000 to $ 245,000, a “significant increase,” Porter said.
âThings change so quickly that you know, we have to be up to date with what’s going on in the market, to make sure the program remains accessible to as many people as possible,â she said.
Porter said the fight is common for any loan that includes more contingencies, including loans made by the Veterans Administration or the Federal Housing Administration, which require additional inspections and other regulations meant to protect buyers. to accept more than they can afford.
But it also means that it can be difficult to compete with hedge fund investors or other wealthier buyers who are able to close properties quickly.
Charlotte-area real estate agent Kristena Johnson said she hears sellers’ agents all the time recommending that their clients take the offers that seem least complicated, whether they are all in cash, at- above list price or at accelerated closing.
âIn this housing market with down payment programs, people need them. They need help getting home, âJohnson said. “The problem that competition is fierce.”
This may deter sellers from considering an offer that uses the program. Porter said his organization regularly meets with real estate agents to educate them about the program so they can discuss it with their clients.
âIt is a blessing and a curse to be in a prosperous city,â said Pam Wideman, director of housing and neighborhood services for the current market city. “Our overall supply of housing, whether affordable, at market price or luxury, is limited.”
She said increasing the amount of down payment assistance available to buyers is also under consideration. But with that comes a tradeoff: more money available to each buyer means fewer households overall could receive loans.
Wideman said she expects the schedule changes to be decided later this year.
For more information on House Charlotte or the Community Heroes Homeownership Program, visit the DreamKey Partners website for program eligibility or to enroll in an owner education course.