Program Transition Information
A Note to Legacy Program Borrowers
In anticipation of a program update, our team sent the below to borrowers in December 2020. We look forward to continuing to support you in your homeownership journey. Frequently asked questions follow.
Effective January 1, 2021, we are sunsetting the City First Homes program. The City First Homes program began 12 years ago, in response to the foreclosure crisis to preserve and provide affordable housing options for DC residents. In that time, we have helped hundreds of homeowners achieve the dream of homeownership in the District through our Recoverable Grant and stewardship programs. However, the DC housing market has become a more challenging landscape for low- to moderate-income individuals and families to find a property that fits their needs. Market conditions have changed, and we are adapting, to meet the needs of DC residents and families, we are transitioning from a property-based program to a person-based program. City First Homes will provide direct financing to low- and moderate-income individuals to help them purchase a property of their choosing in the City. We are reaching out to all our CFH clients to let them know how this change will impact City First Homes properties when they come onto the market.
All of our current homeowners have properties that are secured by a covenant, either a stand-alone Unit Housing Covenant or an Occupancy Agreement (for co-ops). These documents outline City First Homes Right of First Refusal on the property. That clause provides CFH with the option to assist the homeowner with reselling their property and qualifying an interested buyer and providing a recoverable grant to maintain the affordability of the property or to buy the property at the end of 90 days, in many cases CFH extended the 90-day period to allow for a suitable buyer to be found.
As a part of the transition, we are working with homeowners who currently have their properties on the market prior to 01/01/21 and providing those homeowners with the option to remain in the program (where CFH will assist with qualifying buyers and providing the recoverable grant) or to immediately authorize the release of the covenant so that the property can be sold to any interested party regardless of income. This process still includes CFH’s request for an appraisal and providing the resale calculation, so that homeowners are aware of the amount outstanding on their grant and the potential amount of shared appreciation that each homeowner would receive.
For properties that come on the market after 01/01/2021, CFH still prefers that the homeowner request an appraisal or qualified real estate comp report, and CFH will prepare the resale calculation. City First Homes will pay for the appraisal upfront and will request reimbursement for half the cost at the time of closing. The homeowner will then be able to sell their property to any interested buyer regardless of their income.
At the time of closing City First Homes will be reimbursed for the recoverable grant provided for the property and receive 75% of the appreciation in the property.
City First Homes will continue to use these funds to promote affordable housing in the District of Columbia. The new iteration of the second trust mortgage program is expected to launch in the Summer of 2022 and will work to qualify low- and moderate-income individuals and families for down payment assistance loans to purchase properties in the city. This program will have the same template as the current CFH program, but the financing will be tied to an individual buyer vs. being tied to a specific property. When this program launches, our homeowners would be able to refer a buyer to our program if financing could potentially be a hindrance to the buyer closing the loan. Our singular goal and intention are to continue City First Homes commitment to providing buyers in the District with a strong path to homeownership with a focus on economic equity, economic stability, and housing choices.
We remain available to answer any questions specific to your property or about the process going forward. You can reach out to either Lisa Williams or Rodrigo Cordon at any time via email and phone.
Below homeowners may find answers to some important questions regarding the changes to the Legacy Shared Appreciation Program. If you find that your question is not answered here, please feel free to reach out to us for further assistance.
