PROGRAM: This pilot program is open to either for- or non-profit developers interested in developing homeownership units in single or two family buildings in the City. The program is for new construction and rehabilitation projects. This program provides gap financing in the form of a deferred forgivable loan to projects that meet the program criteria. The program subsidy is in the form of gap financing.
PROGRAM GOAL: To encourage the development of quality, infill housing in Cincinnati neighborhoods and to expedite the funding process for small (no more than 3 units) homeownership projects.
TYPICAL STRUCTURE: Subsidy is structured a deferred forgivable loan. Loan is forgiven and mortgage released when the unit is sold to an eligible homebuyer.
MAXIMUM AMOUNT: $30,000 per unit or up to $42,000 for a 2 family
REPAYMENT: None as long as units are sold to eligible homebuyer(s).
BENEFITS: Provides a subsidy to infill projects that may otherwise not be economically feasible for developers to do.
ELIGIBILITY: Both for profit and non-profit developers may apply. The rehabilitation or new construction of homes to be sold to buyers who intend to use the homes as their primary residence and who may have to meet income criteria depending upon the funding source used. Either single family or two family homes are eligible for this program.
CRITERIA: Funding for each project is determined by the gap or "need" demonstrated by the developer through the project budget. The project gap is the difference between the cost to construct (or rehab) the unit and the sales price that the market will bear to sell that unit. In addition to demonstrating a funding gap, the following items must be included with the application:
- Evidence of funding commitment.
- Evidence of owner's equity.
- Deed to the property or copy of sales contract between developer and current owner.
- Two bids from a general contractor (at least one to be submitted at time of application) with prevailing wage assumptions.
- Outline specifications that include a full description of work to be performed.
- Evidence of marketability.
- Completed Home Ownership Pro forma, Use of Funds (development budget) and Source of Funds statements.
- Proof of Community Council notification.
- Evidence of a minimum of one pre-sale (sales contract).Evidence that the project is a) in the vicinity of existing construction activity, b) where other neighborhood revitalization activity is taking place, or c) where new construction activity is readily marketable because of a stable or appreciating housing market.
- Documentation of developer's previous experience in single family housing.
- Plans and drawings with location, site plan, floor plans and elevations.
- Three copies of entire application package.
ELIGIBLE/
INELIGIBLE USES: Ineligible uses include: Transitional housing facilities and/or group homes, projects to be sold to investors, not homebuyers, projects where the developer and the buyer are the same, rental projects of any kind, and projects greater than 3 units.
EVALUATION: Staff evaluates whether there is a funding gap based upon the information provided by the developer. If there is a funding gap and the developer has provided the above referenced criteria, the project is likely to be funded up to either the amount of the actual funding gap or the program maximums of $30,000 per unit (or $42,000 per 2 family) whichever is less.
APPROVAL: City Council approved an enabling ordinance that sets out the criteria that all projects through CHIRP must meet. Projects that do not meet criteria are not eligible for CHIRP funding. Projects that do meet the criteria and have provided all of the required information do not have to go back to Council for approval.
PROGRAM EXAMPLES: Pilot Program
