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For the first time in over a decade, Little Rock officials will designate $272,622 of the city's federal housing dollars to help more than 50 buyers with low incomes purchase their first homes.

The money will come out of the city's 2018 HOME funds, which are allocated by the U.S. Department of Housing and Urban Development. HOME funds go to states and local municipalities to increase home ownership and affordable housing for low-income residents.

In 2018, Little Rock received $649,720 in HOME money. The money was disbursed in the fall of 2018, and part was designated for first-time homebuyers, said Kevin Howard, Community Development Division manager for Little Rock.

"It's something that if anyone comes to our public meetings, we'll say, 'Is this something we need?' And they said, 'Yes, we need this,'" Howard said.

The down payments can be up to 6 percent of the purchase price or $5,000, according to a city press release. Howard said the amounts people get will vary depending on their financial situations.

Potential buyers can't earn more than 80 percent of the area median income. HUD standards for the Little Rock region say that the top of the 80 percent limit would be an annual income of $37,150 for an individual or $53,050 for a family of four.

Buyers also have to complete a homebuyer counseling course, ask their lenders to request the money from the city and be approved for a first mortgage through a bank or mortgage company that has a physical location in Arkansas.

All repairs on the homes have to be completed before buyers get the assistance, according to the news release.

Mayor Frank Scott Jr. said this program was one of a few things the city planned to do to address affordable housing issues in Little Rock and encourage financial literacy. He said he plans to work on a "strategic plan" to improve affordable housing options, but the idea to start down payment assistance was already in place when he came into office.

"A foundational start for building wealth is through home ownership," Scott said.

North Little Rock, Fort Smith, Pine Bluff and the state of Arkansas also got funds from the program. The state administers money separately from cities.

North Little Rock, Fort Smith and Pine Bluff housing authorities also received Family Self-Sufficiency grants, HUD officials announced Thursday.

Family self-sufficiency grants can eventually be used as a down payment on a house. Families that are eligible to participate in the program are also in the Section 8 housing choice voucher program.

Self-Sufficiency participants start out by paying 30 percent of their incomes to rent, and the rest is subsidized by the housing authority. They get case management and pay incrementally more of their rents as their incomes increase.

They all get escrow accounts set up and the amount credited to the account is based on increases in their incomes. If at the end of five years, they are no longer receiving public assistance, they get the money in the account.

"That's the purpose of the program, to help them get prepared to be off of and be self-sufficient from the government assistance," said Mitch Minnick, executive director at the Fort Smith housing authority.

Fourteen housing authorities across the state, including Fort Smith, will get a total of $633,231. The Pine Bluff Housing Authority got the most at $127,000, and the Pope County Public Facilities Board got the least at $19,117.

Minnick said his agency got the same amount it received last year -- $52,134. The money allows about 50 people to participate in the Family Self-Sufficiency program.

This round of funding, which usually follows the calendar year, was delayed by the partial federal government shutdown that lasted 35 days.

"We've had several of our participants that have graduated from the FSS [Family Self-Sufficiency] program and used that money to purchase a home," Minnick said.

Maps and information about HOME and Family Self-Sufficiency grants in Arkansas

Metro on 02/16/2019

Print Headline: Little Rock to help low-income homebuyers

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Archived Comments

  • GeneralMac
    February 16, 2019 at 9:38 a.m.

    If people are renting and need HUD in order to pay rent, how in the world are they going to make house payments after they buy a house ?

  • purplebouquet
    February 16, 2019 at 4:52 p.m.

    I'd like to see an example with actual figures of how this would work. How much would one have to earn in order to afford what type of mortgage on what kind of house with what kind of HOME assistance?

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