Columbus residents have an easier path to owning their first home with this new program
Buying a home is one of the most important purchases someone can make, and a down payment assistance program relaunched by the Columbus Consolidated Government’s Community Reinvestment Department aims to make it easier for first-time buyers in Muscogee County.
The program, Sweet Home Columbus, now provides up to $30,000 in down payment assistance to HUD income-eligible first-time home buyers. This means their household income is under 80% of the area median income.
“We made a big change in the program because we started noticing that the gap of affordability for homeownership for defined low-income households was pushing the American dream of homeownership out of reach for this population,” Robert Scott, director of the Community Reinvestment Department, told the Ledger-Enquirer.
The down payment assistance program in Columbus dates back over 40 years, city manager Isaiah Hugley told the Ledger-Enquirer, and it’s always been federally funded.
When Scott became the director in 2020, the program offered participants up to $10,000 and wasn’t well-marketed, he said. The department raised the amount of assistance to $15,000 in 2022.
The program had three participants from 2020-22 and four participants in 2023. Scott hopes the rebranding and significant increase in available assistance results in more participation.
“(Sweet Home Columbus) is the first step in many that our department has to address accessibility and availability of affordable housing,” Scott said.
How the program works
In Columbus, the 2024 HUD income-eligible limits, in effect until June 2025, range from $39,500 for a single-person household, $56,400 for a four-person household and $74,450 for an eight-person household.
More information about the income limits is on the Community Reinvestment Department’s website.
“Sweet Home Columbus provides an avenue for our citizens who work hard every day to inch closer to the American Dream of home ownership,” Hugley said in a news release. “This is a positive step for our citizens who can begin to utilize this funding source as an accelerant toward wealth creation through the traditional model of home ownership.”
Columbus residents who want to participate in the program must complete an eight-hour HUD-approved Housing Counseling Seminar within a year of purchasing a home. After completing the seminar, they would contact a certified mortgage lender to be pre-approved for a loan and begin the process of getting approved for the down payment assistance.
Only participants with a fixed-rate loan are approved.
All of the assistance must go toward the down payment, and the purchaser isn’t allowed to receive any funds as cash back at closing. Recipients must occupy the home as their primary residence for five to 10 years, depending on the amount of assistance.
Hugley is passionate about supporting Sweet Home Columbus because of his background growing up in poverty, he told the Ledger-Enquirer. When Hugley moved his wife and child back home to Columbus in 1984 as Assistant Director of METRA Transit, he learned about the program.
“I applied and received the down payment assistance grant allowing me to purchase my first home,” Hugley said.
After this experience, he’s made ensuring income qualified employees know about the program a priority.
“The program is real,” he said. “No tricks. I urge citizens to learn more about the program, apply and become a first-time homeowner.”
Housing market affordability crisis
Owning a home is not only a way for families to have somewhere to live but to also build wealth.
The COVID-19 pandemic impacted homeownership rates in the United States, dropping them from 67.9% in the second quarter of 2020 to 65.6% in the third quarter of 2024, according to data from the Federal Reserve. But rates remain much lower than before the Great Recession in 2008, when homeownership in the country peaked at 69.2% in 2004.
First-time homebuyers’ share of the market was at a historic low of 24% nationwide, according to a 2024 report by the National Association of Realtors. And the median age of first-time buyers reached an all-time high of 38 years old, the report said, in contrast to the 1980s, when it was late 20s.
Sweet Home Columbus can help younger generations, such as Millennials and Gen-Z, choose to stay in Muscogee County and invest in the community, Scott said.
“Millennials will most likely fit into this bracket of being eligible for a home loan but also considered low-income by HUD’s definition,” he said. “They’re the right population for this.”
Sweet Home Columbus also could be an incentive to encourage others to move into the city, Scott said.
As Americans become homeowners later in life, rates remain significantly lower among Black Americans as compared to white Americans. The Black homeownership rate is 44.1%, according to the National Association of Realtors, while the rate among white Americans is 72.3%.
Since the pandemic, a shortage in inventory and rising home prices have created barriers to homeownership that the Sweet Home Columbus program aims to help overcome. The number of homes for sale each month listed on Zillow dropped from around 1,900 in 2018 to about 1,000 this past September.
The problem isn’t that there aren’t any housing units available, Scott said, but that many residents are priced out of available housing.
Some people are cost-burdened by their rent, he said, which means they’re spending more than 30% of their income on housing. However, the increasing prices of homes make it harder for some to buy a home rather than rent.
“When they’re paying rent, they’re earning no equity over time,” Scott said. “As long as you’re stuck paying rent to somebody, you’re making someone else rich instead of yourself.”
In Columbus, the average home value is up 5.3% from last year at $160,549, according to Zillow.
The average sale price of a home in Columbus rose from $159,514 in January 2019 to $221,963 in January 2024, according to Zillow’s data. Listing prices are up about 10% over the past year, Scott said.
“It’s a seller’s market,” he said, “and it’s increasingly becoming a seller’s market as the days persist.”
Ultimately, helping Columbus residents grow wealth is one of Scott’s primary goals with the Sweet Home Columbus program.
“This is an opportunity we sincerely hope people can take advantage of,” Scott said.
This story was originally published November 7, 2024 at 1:37 PM.
