Vacant Property Redevelopment
Applications are provided once a qualified organization has met with Housing Division staff to have both the organization and proposed project vetted for eligibility. Funding for this program is limited.
For additional information please contact:
Kristina Eason, Program Manager
Office: 614-645-9643
[email protected]
111 N. Front Street, 3rd
Floor
Columbus, OH 43215
VPR Program Guidelines
The purpose of the VPR program is to redevelop residential homes and residential properties either for sale as homeownership opportunities or for short term lease purchase (up to 36 months). The City receives funds from the Columbus City Council in the Capital Improvements Budget. The Developer will serve as the property owner in all homeownership or lease/purchase projects. The Developer will be required to sign the City of Columbus’ developer agreement contracts and will be subject to the terms set forth therein.
Geographic Information
Priority will be given to projects located in one of the City of Columbus’ Neighborhood Investment Districts (NIDs) and Community Reinvestment Areas (CRAs); eligibility extends elsewhere in the city of Columbus.
Please click here for more information regarding NIDs and CRAs
Eligible Applicants
Non-profit and for-profit organizations are eligible to apply including Community Development Housing Organizations (CHDOs). A non-profit certified CHDO can develop anywhere within their established boundaries. The City will also evaluate a development organization's proven track record of completing, financing and selling its proposed product.
Eligible Property
Any residential structure or lot within the geographic boundaries of the identified funding source that is: 1) Vacant and 2) Single-family dwelling, which will serve as the principal residence of the prospective homeowner (including double conversions into single family dwellings), are eligible. Rental properties are ineligible. Units must be decent safe and sanitary as determined by the City before they are sold to homebuyers. Priority will be given to developers who take control of the site(s) from
Land Bank.
Eligible Activities
Eligible activities include, but are not limited to, acquisition/rehabilitation and soft costs; new construction with acquisition and soft costs; and affordability gap financing for the homebuyer. Construction must begin within ninety (90) days of loan closing.
Financing Guidelines
The program provides development and affordability gap financing based on need but not to exceed a total of $60,000.00. The funding is provided in the form of a grant. The City may consider larger gap financing amounts only if there are extraordinary circumstances and other financing sources cannot address the full gap. Also, a minimum of $1,000 in affordability gap subsidy is required as part of the project structure when there is a development gap only funding request. The City’s preference is that the total subsidy does not exceed maximum per unit subsidy limits as established by HUD.
A Developer Gap is the difference between the development cost of the unit and the appraised value of the unit after construction or rehabilitation. The actual Developer Gap is determined at the point of sale.
An Affordability Gap is the difference between the mortgage obtainable by the homebuyer and the unit appraisal value at the point of sale. A licensed appraiser must determine the appraised value.
- Developer/Builder Forgivable
- Maximum Developer Loan Limits: up to $60,000 per unit may be loaned for the purpose of Development and Affordability subsidies. The City may consider larger gap financing amounts only if there are extraordinary circumstances and other financing sources cannot address the full gap and if the applicant can demonstrate financial need based on construction costs, appraisal values, and/or buyer affordability needs.
- Construction Term: up to 24 months. Extensions are available upon request and will be considered on a case by case basis.
- Bond funded projects do not have income restrictions for households. However, the City may elect to impose income restrictions if the circumstances are appropriate.
Eligible Costs and Disbursements of Funds
- New Home Construction and Rehabilitation eligible costs may include but not limited to: site acquisition; loan origination fees; credit reports; title reports and updates; recordation fees; preparation and filing legal documents; appraisal; attorney fees; loan processing fees; architectural fees; engineering fees; preparation of work write-ups/cost estimates; Developer fee not to exceed 5% of acquisition costs(s) and 15% of other costs. (Developer Fee will not be adjusted based on the change orders or additional costs after agreement has been executed. If affordability subsidy exceeds the allowed amount (up to $20,000 out of the available $60,000 in gap financing), the developer may elect to reduce its developer fee as described above dollar for dollar for the additional affordability subsidy provided.)
- A Certificate of Occupancy is required to release the project contingency funds. Funds will be disbursed as a percentage of the construction costs. Receipts and documentation must be provided to verify costs. Lien Waivers may be required. Specifications and plans need to be written to meet or exceed
AWARE standards. Construction must begin ninety (90) days from the date of agreement signing.
Additional Obligations for Funds
- Relocation Review: Applicant must obtain Seller/Owner's acknowledgement of fair Market Value before closing, a Notice of Acquisition and the Seller/Owner's Certification of No Displacement.
- Historic Review: Clearance must be obtained from the City of Columbus Historic Review Officer. The rehabilitation must comply with Section 106 standards set by the Secretary of the Interior.
- Environmental Review: Phase 1 Environmental Site Assessment must be provided when applicable. The project must receive Environmental Review clearance from the city of Columbus, as defined by the National Environmental Policy Act, which includes a Historic Preservation Review.
- Lead Based Paint Hazards: Work on properties that were built prior to 1978 must comply with Title X rules and regulations, as well as applicable state lead paint laws. The cost and scope of rehabilitation work determines what inspections and interventions will be required.
- Code Inspection/Occupancy Permit: All projects must have building permits, pass a building code inspection and receive a final Certificate of Occupancy prior to final draw.
Community Consultation
Applicants are required to submit their applications to the appropriate Area Commission or Civic Neighborhood Association for disclosure and review prior to submission to the Department of Development. For assistance identifying the appropriate organization, contact
Toya Johnson at 645-1991. For your Neighborhood Liaison contact information and area map,
click here . There may be several civic or neighborhood associations to meet with. Be advised that the Area Commission process can take 2-3 months.
Eligible Home Buyers
A homebuyer who is pre-approved for a mortgage must be presented at the time of application for funding. An estimated affordability need will be determined at that time. Potential homebuyers are eligible to receive is up to $20,000 out of the available $60,000 in gap financing. If affordability subsidy exceeds the allowed amount (up to $20,000 of the available $60,000 in gap financing), the developer may elect to reduce its developer fee as described above dollar for dollar for the additional affordability subsidy provided.
The City will consider, on a case by case basis, waivers to increase affordability and the addition of other types of City funds including the American Dream Downpayment Initiative (ADDI).
American Dream Downpayment Initiative
Qualifying Ratios: Total household expenses (principal, interest, taxes, and insurance) should not exceed 35 percent of household income and total debt service must not exceed 45 percent of the monthly household income. Buy downs must be for the full term of hte loan and financing must be fixed rate only. The City may consider higher ratios if the homebuyer can demonstrate to the City's satisfaction that the total mortgage payment will be able to be met.
The buyer must have at least $500 of their own saved funds exclusive of loans, credits or gift funds to contribute as equity.
Homebuyers purchasing a home assisted with City funds must receive mandatory 8 hours of Homebuyer Education provided by a city of Columbus Certified Homebuyer Education Agency which includes:
- Face to face counseling before the purchase of the property;
- Assisting first-time homebuyers in identifying the most suitable and affordable properties;
- Providing homebuyers with financial management assistance;
- Assisting homebuyers in understanding mortgage transactions and home sales contracts;
- Assisting homebuyers with eliminating and credit problems that may prevent them from purchasing the property; and,
- Home maintenance training.
- Click here for a list of city of Columbus Certified Homebuyer Education Agencies.
A certification of completion of the Homebuyer Education Program must be submitted to the city of Columbus prior to closing and expires one year from the date the course was completed.
NOTE: Total yearly household income includes the income of all adults 18 years of age and older living in the home; Family size includes all persons living in the home.
- Income Qualified Homebuyer Forgivable Loans
- Maximum Homebuyer Affordability Gap Loan Limits: up to $20,000 out of the available $60,000 in gap financing.
- Term: 5 years
- Interest Rate: Zero percent (0%) per annum
- Restrictive Covenant
- All eligible homebuyers are to be informed that a Restrictive Covenant must be executed by the Developer for an affordability period of 5 (five) years.
- The Restrictive Covenant is an agreement between the homeowner and the Developer that states that the homeowner will use the home as their primary residence for the full term of the affordability period.
- The Restrictive Covenant will include a recapture amount based on the affordability assistance received by the homeowner. If no affordability assistance is received, the recapture amount will be 10% of the total committed amount up to $10,000 (Ten Thousand Dollars) to the Developer.
- If the initial homeowner ceases to occupy the property as an owner occupant during the affordability period, they must notify the Developer to discuss release of the Restrictive Covenant.
City Reservation of Rights
The City of Columbus reserves the right to waive the provisions of these guidelines within the limits of the Federal HOME, CDBG, City and State regulations in order to advance its mission and the goals of the Consolidated Plan. Such waiver shall not be construed as a general set-aside of the provisions and is at the sole discretion of the Director of the Department of Development.
These guidelines outline the basic funding requirements of this program and are not meant to be all-inclusive. The funds for this program are limited. As such, they will be available on a first-come, first-served basis based on submission of eligible projects.