Salt Lake City (20 March 2005)—This month marks the one year anniversary of a unique homeownership program administered in partnership between the Community Development Corporation of Utah (CDC) and the US Department of Housing and Urban Development (HUD) to help low to moderate income families, police officers, and school teachers realize the American Dream of homeownership and revitalize neighborhoods in the process. CDC is one of fewer than 20 organizations around the country that has an agreement with HUD to administer the Asset Control Area (ACA) program, an initiative designed to clear out HUD-owned properties and sell them to eligible homebuyers.

CDC purchases HUD-foreclosed properties in targeted areas within Salt Lake County for 50% of their "as is" value. CDC rehabilitates the homes, often using donated materials to reduce the cost of repairing the homes. The new sales price of ACA homes is their fair market (renovated) value. Yet, in most cases, CDC can improve the home, while keeping its costs below the improved, fair market value. The eligible buyer secures a mortgage for the cost of the home and HUD retains a temporary “enforcement note” or soft second mortgage for the difference. HUD forgives the enforcement note after one to three years, allowing the buyer to realize the equity. Keeping the mortgages low helps low-to-moderate income working families purchase a home and enables them to stabilize their housing costs while building assets. In addition, neighborhoods are revitalized when home ownership rates increase.

One family that benefited from the ACA program just last week is Paul and Robynn Davidson and their two-year-old daughter Sydney. The Davidsons bought a CDC rehabilitated home in Midvale. Says Paul about the program:

“It worked perfectly for us. We were at a dead-end in finding a home and had given up, thinking we’d never be able to afford anything decent. Thanks to the CDC, we got everything we wanted and more! We thought we could never do it. And, we got a house that was so well remodeled.”

Paul is a gas line installer for a local plumbing company and Robynn is a cashier at Albertson’s grocery store. The Davidson family was income-eligible to purchase an ACA home from the CDC.

Since March of 2005, the CDC has acquired 63 homes from HUD under the ACA program. The CDC has already rehabilitated and resold 31 of these homes, and some of the data about the homebuyers is powerful:

• Fourteen of 31 homes sold were to police officers and school teachers.
  
• The average annual income of the police officer and school teacher homebuyers is $39,257, or 80% of the area median income.
  
• The average fair market value of the homes purchased by police officers and school teachers is $120,000 and the average equity passed on to them in the form of a forgivable enforcement note is $27,000.
  
• Seventeen of the 31 homebuyers were not police officers or teachers, but rather income eligible, meaning their income falls below 115% of the area median income. In fact, the average income of these 17 homebuyers is $28,465, or 58% of average median income.
  
• The average fair market value of the homes purchased by income-eligible families is $100,000 and the average equity passed on to them in the form of a forgivable enforcement note is $19,000.
  
  

Tom Godfrey, CDC Board of Directors President says “This program has allowed us to get many people into homeownership that otherwise would never get the opportunity.”

The Community Development Corporation of Utah (CDCutah.org) is a Utah non-profit corporation founded in 1991 with the mission to develop affordable housing in order to promote strong families and stable neighborhoods. To date, the CDC has aided more than 1600 families in more than 125 communities to become homeowners. Programs offered by the CDC include new home construction, homebuyer education and counseling, and down payment assistance.

“Making the dream of homeownership a reality for working families is our core business,” says Darin Brush, CDC Executive Director. I couldn’t be more pleased with our first year progress in the ACA program. We’ve changed dozens of lives already.”