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Hubbard County HRA approves changes to entry-cost assistance policy, raises borrower contribution to $1,000
Summary
The Hubbard County Housing and Redevelopment Authority voted to adopt clarified Entry Cost Assistance Program rules, keeping the $7,500 maximum assistance, raising the minimum borrower contribution from $500 to $1,000 and clarifying income and mortgage limits; the changes take effect July 1.
The Hubbard County Housing and Redevelopment Authority on a unanimous voice vote approved revisions to its Entry Cost Assistance Program that clarify income and mortgage limits and raise the minimum borrower contribution to $1,000.
The policy changes, which the board approved to take effect July 1, keep the program’s maximum entry assistance at $7,500 and clarify that income limits should align with the first-mortgage products the agency intends to pair with the assistance. The board also approved raising the maximum mortgage amount the policy references from $175,000 to $250,000.
Authority staff said the clarifications were intended to align the HRA program with available first-mortgage products and to reduce confusion for applicants and lenders. A staff presenter explained, “The current limit is based on a household size of 4.” The presenter also noted the program’s bank-account limit for applicants: households may have no more than $7,500 across all accounts to remain eligible.
Board discussion touched on program design and risk. One board member asked whether income limits should be adjusted for household size; staff replied that loan-qualifying ratios and the cash-on-hand limit are meant to screen applicants and that many higher-income households would be disqualified by those measures even if they otherwise met the income test.
Board members debated the minimum contribution the borrower must bring to a closing. After discussion, the board adopted the staff recommendation to increase the minimum borrower contribution from $500 to $1,000, with one board member saying a larger contribution “shows you’re committed” to the purchase.
On funding, staff said the program has historically drawn on the HRA levy and loan repayments and that the board could choose to cap new originations at the existing loan-portfolio balance if it wanted to limit exposures. Staff committed to bring the portfolio balance and a funding update to the board next month for further discussion.
The board motion to approve the edited policy package, including the change to the borrower contribution, was made and seconded and carried on a voice vote. Staff said the policy edits will be implemented July 1 and that a follow-up portfolio report will be presented at the next meeting.
The change affects prospective homebuyers seeking down-payment or closing-cost assistance through the HRA’s Entry Cost Assistance Program and is intended to better match local underwriting and available first-mortgage products.
