HOME Assisted Housing Rehabilitation Deferred Loan Program

Introduction to the HOME Assisted Housing Rehabilitation Deferred Loan Program

The HOME Assisted Housing Rehabilitation Program (Program) is made possible through a grant from the Iowa Department of Economic Development (IDED) to the City of Ottumwa, Iowa (City). This program is authorized under Title II of the Cranston-Gonzales National Affordable Housing Act, as amended and funded by the U.S. Department of Housing and Urban Development (HUD). The Housing Rehabilitation Division of the Planning and Development Department administers the program.

The Program enables the City to assist low-to-moderate first-time homebuyers obtain their first home by providing housing rehabilitation assistance to rehabilitate the dwelling.

The Program does not provide any down payment and/or closing costs for an applicant.

Eligibility Requirements for the Program

The qualified applicant is required to find their own home and financing. The dwelling is required to be financed through a bank, savings and loan or credit union. The State does not allow private land contracts and or mortgage companies.

The applicant must be a first-time homebuyer defined as: a person that has never owned a home, or has not owned a home within the past three (3) years in Wapello County, or is a displaced homemaker. The person cannot be purchasing a home on contract and/or have closed on the home before the application has been filed and accepted by the housing rehabilitation staff.

The dwelling must be located within the corporate city limits of Ottumwa, Iowa.

The dwelling must be feasible for housing rehabilitation and lead-based paint reduction as determined by an inspection by the housing rehabilitation staff.

Under this year's program, the program will provide a deferred loan up to $24,999 for housing rehabilitation and up to $10,000 in lead-based paint hazard reduction activities, with the payment of the loan being deferred until the property is sold, if it is sold before five- or ten-year residency requirement. Residency requirement is determined by the amount of housing rehabilitation and lead-hazard reduction funds expended on the dwelling.

The qualified applicant is required to sign a second mortgage and promissory note, to secure the amount of housing rehabilitation and lead-based paint hazard reduction.

The applicant cannot have closed on the dwelling before the application has been filed and approved. Applicants purchasing a dwelling on a private land contract are not eligible for the program.

By making an application to the program, the application does not guarantee assistance. All applications are reviewed on a first-come, first-served basis. Applicants that have financing, loan approval and close first are processed first.

Applicants that select a residence that is not deemed feasible for housing rehabilitation, has excessive lead-based paint, and/or does not have the proper number of bedrooms for the family size will be advised to look for another residence.

Homebuyers are required to reside in the dwelling for a period of ten (10) years. During which time, the homebuyer cannot rent, lease or use the dwelling for anything other than a single-family residence. Home business are not allowed to be operated out of the dwelling during the term of the City's housing rehabilitation second mortgage. During the term of the second mortgage with the City, the dwelling cannot be refinanced to remove all equity for credit cards, consumer loans and/or other debt incurred by the homebuyer.

Partial list of items qualified for rehabilitation up to $24,000, if the repairs exceed this amount, the dwelling will not qualify:

• Roof repair or replacement.
• Porches, repair or replacement of existing porch flooring, ceiling, railing, steps or hand railings;
• Residential electrical systems
• Residential plumbing system
• Residential Water
• Water heater repair or replacement;
• Exterior residential doors; same size
• Window replacement of the same size;
• Structural, incidental or general non-luxury repairs;
• Minor foundation repairs.

Program Requirements

Basic requirements for participation in the Locally Funded Housing Rehabilitation Loan Program include:

• Property owner must qualify as a low-income household and must reside in the residence at completion of rehabilitation.
• Deed must be free of Mechanic's Liens.
• Dwelling must be feasible for rehabilitation and structurally sound as determined by the City's inspector.
• Dwelling must be located within the corporate city limits of Ottumwa
• Applicant is subject to a credit check.
• Applicant must have a variable source of income.
• Applicant is only eligible to receive one HOME Assisted Housing Rehabilitation Loan within their lifetime.
• Dwelling/property address is only eligible to receive any type of housing rehabilitation, as administered by the City of Ottumwa, within twenty (20) years of the work being completed.
• Applicant and/or dwelling can not have received prior assistance under any of the following programs:
• Federal Emergency Management Agency (FEMA)
• HOME Assisted Homebuyer's Housing Rehabilitation
• HOME Homeowner Occupied Housing Rehabilitation Program.
• Flood Funds from the Area XV Regional Planning Commission,
• Locally Funded Housing Rehabilitation Program.
• City of Ottumwa is required to hold first or second position on all loans. The City will not accept a third position on the loan.
• Applicants Total Gross Household Income can not exceed the following income limits as determined by the Department of Housing and Urban Development:

Income limits effective March 30, 2007

*subject to change

Equal Housing Opportunity

We do business in accordance with the Federal Fair Housing Law. (Title VII of the Civil Rights Act of 1968 as Amended by the Housing and Community Development Act of 1974). IT IS ILLEGAL TO DISCRIMINATE AGAINST ANY PERSON BECAUSE OF RACE, COLOR RELIGION, SEX OR NATIONAL ORIGIN:

• In the sale or rental of housing or residential lots.
• In the advertising the sale or rental of housing.
• In the financing of housing.
• In the provision of real estate brokerage services.
• Blockbusting is also illegal.

An aggrieved person may file a complaint of a housing discrimination act with:
U.S. Department of Housing & Urban Development
Assistant Secretary for Fair Housing and Equal Opportunity

Application Information

If you have any questions or would like to make an appointment, call our office between the hours of 8:00 a.m. to 4:00 p.m. Monday through Friday .

Applications are received by appointment only.

Call Ted Ellis, Housing Technician
683-0616
City of Ottumwa
105 East Third Street
City Hall Room 301 3rd Floor
Ottumwa, Iowa 52501-2905

At the time of the application, you will need to bring with you the following documents:

• Letter from your lending instruction that you have been pre-approved for a loan.
• Employment Information providing the employer's name, address, salary, length of employment, etc. for each adult member of the household. Social Security Number and Benefit Verification letter from SS Office.
• Social Security Cards for each family member
• Pension/Retirement Income Verification letter.
• Bank and Credit Information account numbers, account names and addresses
• Other Required information if applicable:
• Death Certificate
• Disability Letter from Social Security
• Divorce Settlement
• Probated Will