Columbus, Georgia

Agenda Item # __2___





Columbus Consolidated Government

Council Meeting



May 31, 2005



Agenda Report # 77





TO: Mayor and Councilors



SUBJECT: DreamColumbus Designation



INITIATED BY: City Manager?s Office

________________________________________________________________________________

________

Recommendation: Approval is requested for a collaborative effort between the

City of Columbus and the Georgia Department of Community Affairs? Georgia Dream

Homeownership Program and the designation of ?DreamColumbus?.



Background: DreamColumbus is a collaborative effort between the City of

Columbus and the Department of Community Affairs to provide affordable mortgage

financing and down payment assistance to Columbus? first time homebuyers. The

DreamColumbus collaborative is comprised of segments of three loan programs

currently in existence. The three programs are the City of Columbus? Homebuyer

Assistance Program (HBAP) and American Dream Downpayment Initiative (ADDI)

Program; and the Georgia Department of Community Affairs? Georgia Dream

Homeownership Program (GDHP). DreamColumbus will provide affordable mortgage

financing and down payment, pre-paids, and/or closing cost assistance to first

time homebuyers purchasing within the city limits of Columbus by offering

layered financing options through the combined efforts of the Georgia

Department of Community Affairs and the City of Columbus, Department of

Community Reinvestment. DreamColumbus will offer qualified purchasers,

affordable Conventional, FHA or VA first mortgage loans, second mortgage loans

for down payment assistance and possibly third mortgage loans that may be for

pre-paid items and/or closing cost and additional down payment assistance.



Analysis: The designation of DreamColumbus will not change the current HBAP

and ADDI Program policies and procedures. The City will continue to provide

second mortgage loans for down payment assistance. This collaborative effort

with the Department of Community Affairs will add an additional financing tool

for Columbus homebuyers. What DreamColumbus adds, through the Department of

Community Affairs funding, is the possibility of a third mortgage loan that

will be for pre-paid items and/or closing cost and additional down payment

assistance. With these additional financing opportunities, we will increase

the number of eligible homebuyers by reducing the out of pocket expense and the

balance of the first mortgage.



Financial Considerations: Funding for the HBAP and the ADDI programs will

continue to be funded through the Department of Housing and Urban Development.

There will be no impact on the operating budget of the City.



Recommendations: Approve a resolution authorizing a collaborative effort

between the City of Columbus and the Georgia Department of Community Affairs?

Georgia Dream Homeownership Program and the designation of ?DreamColumbus?.







A RESOLUTION

NO. _____



A RESOLUTION AUTHORIZING A COLLABORATIVE EFFORT BETWEEN THE CITY OF

COLUMBUS AND THE GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS? GEORGIA DREAM

HOMEOWNERSHIP PROGRAM AND THE DESIGNATION OF ?DREAMCOLUMBUS?.



WHEREAS, DreamColumbus is a collaborative effort between the City of Columbus

and the Department of Community Affairs to provide affordable mortgage

financing and down payment assistance to Columbus? first time homebuyers; and,



WHEREAS, DreamColumbus will offer qualified purchasers, affordable

Conventional, FHA or VA first mortgage loans, second mortgage loans for down

payment assistance and possibly third mortgage loans that may be for pre-paid

items and/or closing cost and additional down payment assistance; and,



WHEREAS, DreamColumbus will increase the number of eligible homebuyers by

reducing the out of pocket expense and the balance of the first mortgage; and,



WHEREAS, the City of Columbus will continue to promote decent, safe, affordable

housing for all citizens with this collaboration with the Department of

Community Affairs.



NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:



1. The collaborative effort between the City of Columbus and the Georgia

Department of Community Affairs is hereby approved.



2. The designation of ?DreamColumbus? is hereby approved.



3. The City Manager and/or his designee is hereby authorized to sign any

contracts, agreements and understandings related to the DreamColumbus program.



Introduced at a regular meeting of the Council of Columbus, Georgia, held the

_________day of _____________, and adopted at said meeting by the affirmative

vote of ____________members of said Council.

Councilor Allen voting __________.

Councilor Anthony voting __________.

Councilor Davis voting __________.

Councilor Henderson voting __________.

Councilor Hunter voting __________.

Councilor McDaniel voting __________.

Councilor Turner Pugh voting __________.

Councilor Rodgers voting __________.

Councilor Suber voting __________.

Councilor Woodson voting __________.

___________________________________ ____________________________

Tiny B. Washington, Clerk of Council Robert S. Poydasheff, Mayor



DreamColumbus Fact Sheet



DreamColumbus is a collaborative effort between the City of Columbus, Georgia

and The Georgia Department of Community Affairs to provide affordable mortgage

financing and down payment assistance to Columbus? first time homebuyers. The

DreamColumbus collaborative is comprised of segments of three loan programs

currently in existence. The three programs are: The City of Columbus?

Homebuyer Assistance Program (HBAP) and American Dream Downpayment Initiative

Program (ADDI); and The Georgia Department of Community Affairs' Georgia Dream

Homeownership Program (GDHP). Segments of these three programs have been

combined to create DreamColumbus. DreamColumbus has limitations on total

household income, purchase price and assets and is made available through the

combined efforts of The Georgia Department of Community Affairs and the City of

Columbus, Department of Community Reinvestment.



DreamColumbus will offer to qualified purchasers, affordable Conventional, FHA

or VA first mortgage loans, second mortgage loans for down payment assistance

and possibly third mortgage loans that may be used for pre-paid items and/or

closing cost and additional down payment assistance. The DreamColumbus ADDI

second mortgage loan is only available to qualified first time homebuyers

purchasing new or existing homes in the City of Columbus redevelopment areas as

specified below. The DreamColumbus? HBAP second mortgage loan is available to

qualified first time homebuyers purchasing new or existing homes anywhere

within the Columbus city limits. The DreamColumbus GDHP third mortgage loan is

available to qualified first homebuyers utilizing the Georgia Department of

Community affairs first mortgage loan in conjunction with either of the City of

Columbus programs above.



Objective



DreamColumbus will provide affordable mortgage financing and down payment,

pre-paids, and/or closing cost assistance to first time homebuyers purchasing

within the city limits of Columbus by offering layered financing options

through the combined efforts of the Georgia Department of Community Affairs and

the City of Columbus, Department of Community Reinvestment. It is anticipated

that these options will possibly reduce the homebuyer's monthly payment,

interest rate, closing costs, and/or debt-to-income ratios



Project Goals



1) To increase the number of Columbus residents that have addressed credit,

budget and savings issues previously preventing them from becoming credit

worthy homebuyers and long term homeowners by utilizing Homebuyer Education and

Counseling providers to provide required homebuyer training and individual one

on one counseling.



2) To increase the number of eligible Columbus homebuyers by reducing out of

pocket expenses and the balance of the first mortgage through the layering of

the second mortgage funds of Columbus HBAP or ADDI and the Georgia Department

of Community Affairs GDHP for payment of down payment, closing costs and

prepaid items.



3) To increase the number of low to moderate income Columbus applicants

approved for

financing due to lower monthly mortgage payments as a result of

increased use of the GDHP

first mortgage loan with its lower than market fixed interest rate and

limited closing costs.



4) To increase the pool of mortgage lenders providing affordable financing

to homebuyers.



5) To encourage competitive, low interest rates and lower closing cost

mortgage financing for

all Columbus homebuyers.



6) To encourage the development of affordable housing within the City of

Columbus.





Participants



The City of Columbus, Department of Community Reinvestment, Georgia Department

of Community Affairs Office of Homeownership, Development Partners,

Participating Lending Institutions, Realtors/Realtist and Homebuyer Education

and Counseling Providers.



Mortgage Financing



Homebuyers will be encouraged to work with DreamColumbus participating lenders

to determine the financing options that are best for them. Information

regarding program criteria, rates and terms will be distributed via homebuyer

education providers and other distribution channels. Mortgage financing will

be provided by GDHP and HOME approved lenders that have agreed to make

affordable loans to DreamColumbus applicants. A list of participating lenders

will include those lenders who have agreed to offer The Department of Community

Affairs' GDHP Conventional, USDA/RD, FHA and VA first mortgage loans, the City

of Columbus? HBAP or ADDI second mortgage loans and The Department of Community

Affairs' GDHP second mortgage loans at affordable rates and terms for first

time homebuyers. Mortgage insurance may not be required if the first mortgage

financing is less than 80% loan to value.



Financing Options:



Option 1: (ADDI - $10,000)



For the purchase of new or existing homes within the City of Columbus?

Redevelopment Areas (2nd Avenue, South Lawyers Lane, Beallwood, 5th/6th Avenue,

East Highlands and the Medical Center Areas (Per maps provided by the city)



Maximum purchase price $95,000.



Available to qualified first time homebuyers (or those who have not owned a

home in past 3 years)



GDHP First Mortgage ? Conventional, FHA, VA, USDA/RD

ADDI Second Mortgage- $10,000 or up to 6% of the purchase price whichever is

greater

GDHP Second Mortgage (third lien position) - up to $20,000



Option 2: (HBAP - $5,000)



For the purchase of new or existing homes within the City of Columbus



Maximum purchase price $95,000

Available to first time homebuyers (or those who have not owned a home in past

2 years)



GDHP First Mortgage - Conventional, FHA, VA, USDA/RD

HBAP Second Mortgage - $5,000

GDHP Second Mortgage-(third lien position) - up to $20,000



Application Process



Participating lenders, agents, development partners, etc. will inform

homebuyers of their financing options.



Applicants seeking DreamColumbus financing are required to attend an approved

8-hour Home Buyer Education course prior to loan closing. Homebuyer education

offers a comprehensive look at the home buying process and home ownership

responsibilities. Home Buyer Education will be provided through a partnership

with the local entities listed below:



Homebuyer Education Agencies:



CCCS of West Georgia 706-327-3239

800-757-7227



NeighborWorks Columbus 706-324-4663



Urban League of Columbus 706-323-3687



Enrichment Services 706-653-4200



If homebuyer elects to participate in DreamColumbus, the homebuyer will select

the approved lender of their choice. The lender will then process the

application based on DreamColumbus? program guidelines. Once pre-approved for

the GDHP First Mortgage (and GDHP second mortgage, if applicable), the lender

forwards the necessary documents to the City of Columbus, Department of

Community Reinvestment for HBAP/ADDI second-mortgage consideration.



Terms and Conditions



Homebuyers must meet the eligibility requirements set forth for the HBAP or

ADDI program and the GDHP program. The minimum out of pocket homebuyer?s

contribution to the purchase transaction is 1% of the purchase price of the

subject property. Rates and terms are subject to change. Other terms and

conditions also apply.