Capuano Amendments Pass House Banking Committee
March 16, 2000 -- Two amendments authored by Rep. Mike Capuano (D-MA) aimed at making it easier for working men and women to purchase homes passed unanimously in the House Banking Committee this week. A third amendment, which also received unanimous support, provides additional funding for the Grandfamilies Program. The amendments were added to H.R. 1776, "The American Homeownership and Economic Opportunity Act of 2000", which now moves to the floor of the House of Representatives for consideration.
The first amendment creates the "Multi-Family Affordable Mortgage Program". It allows cities and town receiving CDBG and HOME funds to offer down-payment assistance to individuals and families seeking to purchase two or three-family residences. Buyers must agree to live in the homes themselves and keep the rental units affordable for other low and moderate income families.
"The cost of housing continues to increase in Greater Boston and in many parts of the country. Many families are struggling to pay rent and cannot even think about saving for a down payment on a home. This amendment will help them achieve the American Dream of home ownership. It will also help other working individuals by keeping the rental units in the homes purchased affordable", stated Rep. Capuano.
Potential homebuyers must meet the following eligibility requirements:
If these eligibility requirements are met, then cities and towns can use CDBG or HOME funds to provide a no-interest loan to cover up to a 7% down payment and/or closing costs. The buyer is responsible for at least 3% of the cost of the home. As long as the buyer maintains the home as a primary residence and does not refinance the mortgage for equity capital, no loan payments will be required. Once the homeowner sells the home, the loan must be repaid in full along with a percentage of the appreciation value. The money repaid is then returned to the municipality so that others can benefit from the program. The second provision gives municipalities in high cost housing areas more flexibility in using federal CDBG and HOME funding for police officers, firefighters and teachers to purchase homes in the communities they serve by offering down payment assistance. The program is targeted to encourage these employees to move into neighborhoods that need revitalization.
The third amendment makes it easier to replicate the successful Grandfamilies House in Dorchester, a program that provides affordable housing and support services to grandparents raising their grandchildren. Rep. Capuano's amendment increases the flexibility of the federal funding needed to run these types of developments. The Grandfamilies House has had inquiries from across the country from groups hoping to develop similar housing units. "I am hopeful that H.R. 1776 will be considered by the House of Representatives in the near future so that families and individuals may benefit from the housing initiatives proposed in my amendments," stated Rep. Capuano.