Homeownership Bill Containing Key Capuano Amendments Passes House
April 7, 2000 -- A bill containing key amendments authored by Rep. Mike Capuano passed in the House of Representatives on Thursday. The provisions are included in H.R. 1776, "The American Homeownership and Economic Opportunity Act of 2000". The legislation is aimed at increasing homeownership opportunities for working families and now moves to the United States Senate for consideration. Two amendments make it easier for working men and women to purchase homes. The third provides additional funding for the highly successful Grandfamilies Program.
Through this legislation, Representative Capuano is working to create the "Multi-Family Affordable Mortgage Program". It allows cities and towns 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 program 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.
A second amendment gives municipalities in high cost housing areas more flexibility in using federal CDGB 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. Additionally, Representative Capuano authored an amendment making 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 urge the Senate to take up H.R. 1776 so that we can pass these housing initiatives quickly on to the people who need them most," stated Rep. Capuano.