A new program from the City of Sarasota will offer help to low-income Sarasota families who are looking to buy a home. Using $650,000 in funds from the State Housing Initiative Partnership, the city will offer families up to $30,000 in the form of a Shared Appreciation Mortgage loan. The money can be used towards the down payment and closing costs on a family home.
Program Applicants Must Already Have 3% Of Purchase Price
In order to qualify, the buyers must already be in a contract to buy a home. The bank or mortgage lender will then send the application to the City’s Housing Office. This program is available for pre-existing homes or condos in Sarasota County that are valued less than $175,000. Other restrictions on qualifying for the program include having an income that is less than 80% of the median adjusted income for Sarasota County. With some exceptions, the applicants cannot have owned a home in the last three years. Applicants will also have to attend a home buyers’ class and will have to be able to contribute 3% of the purchase price.
No Monthly Payments, 0% Interest
The loan will be made on the basis that no monthly payments will be required and the interest on the loan will be 0%. As a Shared Appreciation Mortgage, the city will get a percentage of any appreciation (along with the return of the principal) when the house is sold, or the owner is no longer occupying the property. The percentage of the appreciation that will be charged will be calculated based on the percentage of the original purchase price provided by the down payment loan. So in other words, if the original purchase price of the house was $150,000 and the down payment loan was $20,000, the applicant will have to pay 13% of any appreciation.
Bringing Down Barriers To Home Ownership
For lots of low income buyers, putting together the money for a deposit is the biggest barrier to home ownership. After writing earlier in the week about how Sarasota is becoming such an attractive destination for high-net-worth individuals, it’s great to see that the community is ensuring that everyone gets a chance to own a home in our beautiful city!
Interested in buying a home in the Sarasota area? Call Coffey & Company on 877.308.6311 or send us an Email. We’re always happy to share our knowledge and experience!