Page last updated on November 29, 2021 at 1:41 pm
For more information, please contact
Brent Pierce, Assistant Director, Housing and Neighborhood Development Department, brent.pierce@bloomington.in.gov, 812-349-3420
The Challenge
The City of Bloomington’s housing market can be hard for some prospective homebuyers to access, with the long-term affordability of homes being a concern for many in the region. In the wake of the COVID-19 Pandemic, Mayor Hamilton rolled out “Recover Forward”, a detailed plan promoting economic, racial, and climate justice. The initiative also promises to address the need for more affordable housing in the City. The City’s Housing and Neighborhood Development Department was eager to manage a program that would get more of the City’s housing stock into long-term affordability. They hoped, with “Recover Forward” funds, the City might be able to partner with Bloomington residents in accessing homeownership.
The Idea
The Shared Appreciation Homeownership Program addresses one piece of the affordable housing shortage challenge. It helps those buying homes, by providing 20% of the purchase price (up to $50,000) which can establish permanent affordability through shared appreciation of the home. “Shared appreciation” agreements let the future homeowner access home equity in exchange for a share of the property's future appreciation. This program recently awarded a first-time homebuyer with the perspective and tools needed to make buying a home feasible. Audrey, the first-time homebuyer, was able to close on a home for $155,000 with the help of a loan totaling $36,052.47 in down payment and closing cost assistance made available to her through the program.
The Cost
The Bloomington Common Council approved reallocating $2 million of 2019 reversion funds on August 12, 2020, as the first step in a multi-phase strategy to help the community rebound and thrive in the face of concurrent crises. The Mayor called this strategy “Recover Forward.” $450,000 of those funds were earmarked towards expanding affordable homeownership, down payment assistance, and second mortgage assistance in the form of loans for home buyers like Audrey.
The Benefits
This program will provide first-time and lower-income prospective homebuyers the help and support necessary to make Bloomington their home. The terms of the loans offered through the Shared Appreciation program include zero interest over a 99-year term, with the principal repayable to the City upon the future sale of the home to an income-eligible buyer. The buyers will share 50% of the property’s appreciated value with the City upon resale. “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.”
Metadata
City Department: Housing and Neighborhood Development
City Point of Contact: Brent Pierce, brent.pierce@bloomington.in.gov, 812-349-3420
Partner(s): N/A
Partner Point(s) of Contact: N/A
Date Implemented: Summer 2020
Type of Innovation: New Service