Utah’s new $20,000 first-time homebuyer assistance program created by the state’s Legislature earlier this year is set to roll out in the beginning of July.
The Utah Housing Corp. will administer the program and said the assistance will be available for funding shortly after July 1.
The program is for new home construction and will provide loans for up to $20,000 that could be used for any combination of a down payment, closing costs or to permanently buy down the mortgage interest rate. The loans will have no interest charged to the borrower and will not have monthly payments. Recipients will pay back the loan only when they sell the home or refinance the mortgage.
“Eligible property types include{mprestriction ids="1,3"} detached single-family homes, condominiums, townhomes or similar residential dwellings, including manufactured or modular homes attached to a permanent foundation,” according to the housing corporation. To qualify, the newly built residential units must be priced at or below $450,000. The price limit was established to incentivize builders to build affordable housing.
Ross Ford, executive vice president of the Utah Home Builders Association, said the program is already making builders focus on the $450,000 limit.
“It holds the price level,” Ford said. “I’ve had a number of builders start talking to us saying they’re looking for ways [to hold the price down.]” He said, “[They’re asking] ‘How can we do this; How can we get this down?”
Residents who have already entered into a construction contract can still qualify for the program as long as they close on the purchase after July 1.
“In America, we believe in home ownership, and in Utah, we believe in home ownership,” Senate President Stuart Adams said in February during the legislative session.
Adams sponsored the law, SB240, which created the assistance program. Without help, Adams said many families would not be able to make the jump into homeownership.
“We may be losing our middle class,” he said. “Most of peoples’ net worth is in their home. The security and stability, I think, economically, and I think emotionally, comes from property ownership.”
Utah residents can qualify for the assistance as long as they or their spouse had no ownership in a principal residence in the past three years. Displaced homemakers and single parents who owned a home with their spouse while married are exempt from that waiting period.
The $50 million allocated for the program is enough to help 2,500 first-time homebuyers.{/mprestriction}
