Wilmington City Council approves Substitute No.1 to Ordinance 21-056 to Create a Down-payment and Settlement Assistance Program

February 17, 2022

The Wilmington First Start Home Ownership Down Payment and Settlement Assistance Program, a municipal loan program that will provide eligible homebuyers with loans of up to $15,000 to assist with down payment or settlement costs related to the purchase of a primary residence in the City of Wilmington, is projected to roll out on July 1, 2022.

To expand homeownership, encourage mixed-income neighborhoods, and promote housing stability and wealth-building among City residents, Council Member Linda M. Gray of the 1st District sponsored Substitute No.1 to Ordinance 21-056 to create a down-payment and settlement assistance program for the City of Wilmington that authorizes the Department of Real Estate and Housing to undertake the program using grant funds or capital budget funds in any fiscal year for the purpose of providing down payment and settlement assistance to eligible homebuyers.

“The program supports residential development, stabilization of city neighborhoods, and fits with Mayor Mike Purzycki’s projects and desires for the city going forward,” said Councilwoman Gray. “This is a program for people who have less than 80% of the HUD median income, which right now is $75,600 for a family of four. If you make less than that, as a family of four, you may qualify for this program. It will also help first-time homebuyers and people who are on the verge of purchasing a home but don’t have the funds for a down payment.”

During their regular city council meeting on Thursday, February 3, 2022, Council voted 11-yes (1st District Council Member Linda Gray, 2nd District Council Member Shané Darby, 3rd District Council Member Zanthia Oliver, 4th District Council Member Michelle Harlee, 5th District Council Member Bregetta Fields, 6th District Council Member Yolanda McCoy, 7th District Council Member Chris Johnson, 8th District Council Member Nathan Field, At-Large Council Members Maria Cabrera, James Spadola, and City Council President Congo) and one absent (Council Member At-Large Loretta Walsh) to pass the substitute ordinance.

“I’m excited that this ordinance passed. To see new people wanting to move into the City and people that already live here want to own, the program is a stepping stone to moving up in the economic pyramid. People who own homes usually own cars, and people who own cars are usually working, and all this will contribute to Wilmington being a better city,” said Councilwoman Gray.

To be eligible for the assistance program, a homebuyer must meet the following requirements:

· Homebuyer must not have owned their principal residence at any point in the three years prior to a settlement except that single parents who have not owned their principal residence in the year prior to the settlement shall be eligible;

· Homebuyer must have at least $1,000 to contribute towards settlement costs;

· Homebuyer must intend for the property to serve as their principal place of residence;

· Homebuyer must complete a homeownership counseling program with a HUD-certified counselor before signing a sales contract or applying for a mortgage;

· All purchase money lenders must be approved by the Department of Real Estate and Housing;

· An American Society of Home Inspectors (ASHI) home inspection must be completed on all properties, and all major defects identified by the inspection must be repaired by a licensed contractor prior to closing;

· New construction homes must have a one-year HUD-approved warranty;

· A visual assessment for lead-based paint must be conducted on all homes built prior to 1978. Repairs must be completed according to HUD guidelines; and

· Homebuyer’s income cannot exceed 80% of the median income based upon family size for New Castle County as defined annually by the United States Department of Housing and Urban Development.

The funds for the Wilmington First Start Home Ownership Down Payment and Settlement Assistance Program will consist of grant funds, Community Development Block Grants (CDBG) funds, and capital budget funds however the program will have zero effect on the City’s current budget.

One of the co-sponsors of the substitute ordinance, Council Member At-Large Maria Cabrera, who is also chair of the Community Development and Urban Planning Committee, said that she remembers buying her home under a similar program with the City.

“I think this is a great piece of legislation and I want to thank Councilwoman Gray for sponsoring it. There is a lot of support now for people to buy homes. There’s money from the State and banks are giving very lucrative incentives. But by having this program in Wilmington, I firmly believe that the program is an incentive for people to buy in Wilmington and we do want to encourage more home buying in our City.”

The substitute ordinance was signed into law by Mayor Purzycki on February 4, 2022, which can be read here. The procedure for applying for the program is forthcoming. For the latest information, visit the City’s Real Estate and Housing website here.