During the Wednesday night City Commission meeting, elected officials were updated on the Affordable Home Construction Loan Program. The program has funding totaling $1 million from the Affordable Housing Trust Fund (AHTF) and the Community Redevelopment Agency (CRA).
In July 2020, the City Commission approved the Affordable Home Construction Loan Program to help finance small-scale private developments. The initial investment from the AHTF was $750,000 and the CRA subsequently approved $250,000 for projects within the Greater Frenchtown/Southside (GFS) redevelopment district boundaries.
The program was created in hopes of helping people whose income is below the Tallahassee metro area’s median income of $76,400, according to statistics provided by the U.S. Department of Housing and Urban Development (HUD).
In 2020, Leon County’s average sale price for a home was $256,080 which is up from the previous year by $10,000. As it stands currently, the average household with the current median income can obtain a market rate mortgage of about $200,000.
However, for those who earn less than the median income the purchase options continue to diminish due to “very low inventory of affordable options, rising cost of construction, and lack of financial resources for down payment and closing costs.”
With the approval of the AHCLP, applications are accepted on a rolling basis for private and non-profit developers, for up to a $175,000 loan per project and up to two concurrent loans per applicant. Once constructed, full repayment of the loan is expected within 18 months of the date of the agreement.
Since the AHCLP launched, seven applications have been successfully submitted and five of those have been awarded loans. Two of the loans are for projects located within the CRA’s GFS Redevelopment District boundaries.