Springfield City Council considering loans for northwest area home buyers

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SPRINGFIELD, Mo. On Monday night the Springfield City Council will consider bringing back a pilot program that will provide loans to first-time home buyers in the northwest quadrant of the city.

It's an effort to encourage home ownership at a time when more people are choosing to rent.

Under the city council's proposed down payment assistance program, first-time home buyers could receive up to a $5,000 loan if their house is in the designated revitalization area, which basically falls in the northwest quarter of the city.

And if they live in the house for 10 years or more, they don't have to pay-off the loan.

"That's really designed to insure more of a stability in the neighborhood and insure the owner buys the house and stays there for a good period of time," Assistant Director for Planning and Development Brendan Griesemer said in explaining why the 10-year rule was added to the loan.

The goal is not only to encourage people to buy homes in northwest Springfield and live in them long-term, but to take pride in their houses and their neighborhoods.

"Owners tend to take care of their properties," Griesemer said. "They have a financial investment in their neighborhood and tend to be active in the neighborhoods, in the neighborhood association, block watches, those types of things. So we always encourage a higher ownership rate in any neighborhood."

The loans come through the US Department of Housing and Urban Development, and there are some conditions that must be met.

The homeowners income must be below at certain amount.A family of four, for instance, has to make a combined $48,000 or less.

And the buyer must also get a mortgage through a lending institution.

"Because this is a down payment program they have to receive a mortgage so they have to be able to qualify for that," Griesemer said. "They have to be bankable. And in order to receive our program they also have to receive a mortgage loan."

The council approved these types of loans before from 2005 to 2009 as the number of people who own rather than rent their homes has gone down 12% citywide this century. The West Central part of town has the lowest rate of owner-occupancy at 32% , while the Grant Beach, Fassnight, and Heart of the Westside neighborhoods all have over half of their homes occupied by renters.

"The trend is nationwide," Griesemer pointed out. "Home ownership is not for everyone. So we do see some of the renter households increasing because of the changing economic times. This program would fund approximately 20 homes so a year from now we would like to see 20 families in a home in a home ownership scenario."

If the pilot program is approved, it will only be funded for a year. But the council can decide to make more H-U-D funds available in the future.