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CRA funds residential wealth‑building pilot: CDCU down‑payment program approved; partial funding recommended for Northwest Pipeline rent‑to‑own
Summary
The CRA board awarded $2 million to CDCU for a down‑payment assistance product and approved partial CRA support for a Housing Authority rent‑to‑own proposal at the Northwest Pipeline Building; board members recused where conflicts existed and staff outlined program details and repayment terms.
Salt Lake City’s Community Reinvestment Agency Board on March 18 approved two funding allocations under the residential wealth‑building pilot. The board authorized a $2.0 million grant allocation to the Community Development Corporation of Utah (CDCU) to seed a silent second mortgage down‑payment assistance product, and it approved partial funding for the Housing Authority’s Northwest Pipeline rent‑to‑own proposal as recommended by staff.
CDCU proposal: staff and the applicant described a $2.0 million “silent second” down‑payment loan program targeted to first‑time homebuyers at approximately 50–80% of AMI. Staff and CDCU said the product is principally a second mortgage repaid upon resale or refinance (no monthly payments required), and that repayments would be recycled into future households. CDCU estimated the initial $2.0 million could serve about 20 households at an average assistance level near $100,000 per household depending on need and sale price. CDCU said the second mortgage would be repayable upon sale or transfer and could be structured as a 30‑year term; it would not be a direct monthly payment burden imputed in underwriting for the first mortgage.
Housing Authority (HAME) Northwest Pipeline: the housing authority applied for a $2.0 million loan to support 56 units to be rented initially at or below 80% AMI, with a rent‑to‑own path after a minimum five‑year period required for historic tax credit compliance. Staff recommended partial CRA funding to the HAME proposal in recognition of family‑sized units (3+ bedrooms) that meet program priorities; staff recommended approximately $1.2 million of the HAME $2.0 million request from a mix of HDLP and school‑district‑linked funds, with conditions described in the staff memo.
Board action and votes The board took two separate votes: first, a resolution approving citywide affordable housing project funding (the HAME allocation as presented) carried (board member Mano recused; board member Young recorded absent earlier in the meeting). That motion passed as recorded in the minutes (vote counted as 5‑0 with Young absent and Mano recused). Second, a resolution awarding the residential wealth‑building pilot allocation to CDCU for a $2.0 million down‑payment assistance fund passed unanimously among members present.
Context and next steps Staff noted these pilot allocations are intended to test models that bridge renters to homeowners and to create reusable capital (repayments would be placed back into revolving funds). CDCU will administer the down‑payment product; the HAME loan terms will be structured as a loan similar to HDLP terms with affordability deed restrictions and repayment tied to unit sales. Staff will return to complete loan documents, underwriting and closing steps.
