Recover forward funds homeownership and permanent affordability through shared appreciation program
Bloomington, Indiana – A first-time participant in Mayor John Hamilton’s Recover Forward affordable homeownership program has been active in purchasing her own house. The first-time homebuyer was able to purchase a home with a zero-interest loan from the City, repayable upon potential sale to another income-eligible buyer, thanks to the Shared Appreciation Homeownership Program. The program provides at least 20% of the purchase price up to $50,000 in exchange for permanent affordability of the home through shared appreciation.
The Shared Appreciation Homeownership Program is one of two programs launched through Recover Forward to assist homebuyers who have difficulty accessing the Bloomington homeownership market and, at the same time, to establish long-term affordability of some homes. The program was launched in the summer of 2020 as part of a package to help Bloomington recover from the pandemic and economic collapse and to advance racial, economic, and climate justice. The City’s Housing and Neighborhood Development Department (HAND) is managing this program and an enhanced down payment assistance program, which were funded through $450,000 of 2019 reversion funds.
“My experience with HAND was phenomenal,” said homebuyer Audrey, a musician and music teacher who has lived in Bloomington for 10 years. “There is no way I would have been able to purchase a home without HAND. The class I took as a first-time homebuyer really put everything in perspective and set me up with the tools to actually make this home purchase a reality. I cannot thank HAND, and everyone else behind the scenes who helped me, enough.”
Audrey closed May 12 on a home purchase for $155,000 with the help of a loan for $36,052.47 in down payment and closing cost assistance made available through the new program. The terms of the loan include zero interest over a 99-year term, with the principal repayable to the City upon future sale of the home to an income-eligible buyer. The buyer will share 50% of the property’s appreciated value with the City upon resale.
“It’s exciting to partner with another Bloomington resident in accessing homeownership, and also, to find a way to get more of our housing stock into long term affordability through the shared appreciation mechanism,” said Mayor Hamilton. “This program puts home buying within reach for this individual, and also has the ripple effect of extending the same opportunity to future generations of low-income buyers.”
More information about the Shared Appreciation Homeownership Program is available at firstname.lastname@example.org or (812) 349-3420. Funds are also available through the Down Payment Assistance Program, which offers homebuying-ready families up to $10,000 to help with a down payment needed to purchase a home.
The Shared Appreciation Homeownership Program is a Recover Forward Phase One project. The Bloomington Common Council approved reallocating $2 million of 2019 reversion funds on August 12 as the first in a multi-phase strategy to help the community rebound and thrive in the face of concurrent crises. Projects funded through Recover Forward expand access to jobs through training and education, housing, transportation options, renewable energy, social services, food, the arts, and the internet.