(The Center Square) – The city of Iowa City is partnering with a bank and a credit union on an initiative to help community members buy a home.
The goal of the initiative is to decrease racial gaps in homeownership in the city, according to an Iowa City news release. In The Hawkeye State, 75.6% of White residents owned homes in 2022, compared with 25.7% of Black residents, 56.5% of Hispanic residents and 54.3% of people of other races or ethnicities, according to the Urban Institute. Nationally, in 2010, the homeownership rate was 73.0% for White Americans, 41.9% for Black Americans, 49% for Hispanic Americans and 58.1% for other Americans.
Iowa City has the 31st highest homeownership gap between Black and White people among all U.S. metros, according to Stacker. While 66% of White people own a home, only 16.6% of Black people own a home. Iowa City’s Black homeownership rate is the 16th lowest among all metros.
GreenState Credit Union and Hills Bank & Trust will provide financing for neighborhoods and households that have had difficulty in obtaining a standard 30-year mortgage, the release said. They’ll be flexible in considering credit, assets and job tenure.
The city will provide up to $15,000 in down payment assistance with federal Community Development Block Grant program/HOME Investment Partnerships Program funds to buyers whose household income is below 80% of the Area Median Income, according to the release. For example, that income level is $64,650 for a one-person household, $73,850 for a two-person household, $83,100 for a three-person household and $92,300 for a four-person household.
Buyers must qualify for financing through either lender for the rest of the cost of the home, and that home must be in a Census-determined lower-income area of the city, the release said. Mobile homes aren’t eligible. The home purchase price can’t exceed $271,000.
Buyers must complete an application with the lender and the HUD-required homebuyer education course through Horizons, the release said. GreenState Credit Union or Hills Bank & Trust will cover any costs of the course. They can then apply for down payment assistance through the city for an eligible home, make an offer, complete home inspections and close on the offer.
