Independence to enter into local program to help residents become homeowners

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The Independence City Council unanimously voted at a meeting Monday evening to allow the city’s mayor to begin the process of entering Independence into the Northern Kentucky HOME Consortium, a local program that uses federal grant money to aid Northern Kentucky residents with purchasing a home.

Independence will be the newest addition to the consortium, joining Bellevue, Covington, Dayton, Erlanger, Florence, Ludlow and Newport.

The decision came following a presentation from Covington Mayor Joe Meyer, who laid out the basics of the program and fielded questions from the council members.

Covington Mayor Joe Meyer speaking at the Independence City Council meeting on June 5. Photo by Nathan Granger | LINK nky

“Erlanger has joined this year. Florence has joined this year,” Meyer said. “It’s a great program. This gives you the chance to help your people be home owners in Independence.”

The HOME Consortium offers forgivable loans of up to $10,000 to help qualifying people cover down payments and other closing costs associated with purchasing a house or similar property — costs that are often difficult to save for.

It also injects money into organizations to help them invest in community improvement and affordable housing. Specifically, Meyer identified three in the region: Entryway, Inc., The Center for Great Neighborhoods and Housing Opportunities of Northern Kentucky.

To be eligible for a HOME loan, buyers must meet the following criteria in addition to being a resident of one of the consortium cities:

  • Their gross annual household income must be at or below 80% of the area’s median income as set by HUD, which is $53,000 for a single person or $76,400 for a four-person household
  • They must attend a home buyer education course taught by a HUD-certified instructor
  • The properties they wish to purchase must be one to two units, either owner-occupied or vacant
  • The properties’ sale prices cannot exceed $195,000
  • The properties must meet minimum local housing standards
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Once accepted, home buyers’ interest rates on the down payment loan are 0%, and they have no monthly required repayments. For every year the owners stay in the property, $1,000 of the loan is forgiven with full forgiveness occurring after 10 years. Buyers are still on the hook for financing the remainder of the home purchase through a conventional lender.

The median house price in Independence is $212,479, according to the Environmental Systems Research Institute, a geographical information software platform used by realtors.

After Meyer gave an overview of the program, several council members asked questions.

“What is the benefit of Independence coming on board with this?” asked Council Member Chris Vogelpohl.

“It helps your community,” Meyer replied.

Covington is responsible for managing the program for all of the cities in the agreement, so Independence would not need to dedicate staff time or money to the program.

Council Member Carol Franzen (middle) at the council meeting on June 5. Also pictured: Council Member Greg Waite (left) and City Attorney Jack Gatlin (right). Photo by Nathan Granger | LINK nky

“Do you have an issue with any homeowners not being able to pay their property taxes?” asked Council Member Carol Franzen.

“Covington staff qualifies all of the applicants and makes sure that they’re capable of paying 100% of all the costs associated with home-ownership,” Meyer said before remarking on the education requirement for the program.

“It’s been our experience that staff does a very conservative job of working with qualifying applicants in order to avoid defaults,” Meyer added. “And I’ve learned that the default rate for participation in this program is lower than the average default rate for participation [in normal lending programs].”

LINK nky was not able to directly corroborate this assertion at the time of the meeting.

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Independence Mayor Chris Reinersman, who works as a real-estate appraiser and is generally familiar with the local market, believed that the program would be especially helpful for police officers and teachers who worked in the city but maybe couldn’t afford local property with their income levels.

The average wage for police officers and teachers in Kentucky as of May 2022 was $48,170 and $51,540 respectively, according to the Bureau of Labor Statistics.

Between the beginning of July 2022 and the end of April 2023, 31 home loans in the member cities had been given out with at least five more in progress. 

CityNo. of Approved LoansHome Funds Expended
Covington20 (with 5 in progress)$251,132.61

“$10,000 for down payment assistance and other things can make a real difference for a lot of people,” Meyer concluded.

“The City of Independence is excited to be able to assist our residents through the housing consortium,” Reinersman said in an email after the meeting. “While many think of us as a typical suburb that this wouldn’t apply to, more than a third of our population have household incomes under $75,000. As a result, many will meet the income requirements. In addition, greater than 40% of the estimated 2022 home values would qualify for the program. I see this as a great way for renters to become homeowners.”

With the council’s vote, Independence could be active in the program by the beginning of next fiscal year on July 1, 2023, depending on how long it takes to finalize documents and complete other legal matters.

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If you would like to apply for a HOME Consortium grant, visit its online application portal.

If you have questions about the HOME program, contact the program’s coordinator John Hammons at either (859)292-2105 or [email protected].

The next Independence City Council meeting is planned for July 3 but may be rescheduled due to its proximity to Independence Day.

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