Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Housing topic
No spam. Unsubscribe anytime.
Council approves pilot down-payment program to turn single-family rentals into owner-occupied homes
Summary
The Kent committee approved a $50,000 pilot offering up to five $10,000 forgivable loans to incentivize converting single-family rentals into owner-occupied homes; loans will be second-position mortgages, require three years of prior rental registration on the property and eight years of owner occupancy to fully forgive.
A committee of the Kent City Council on April 1 approved a pilot down-payment assistance program designed to encourage conversion of single-family rental properties back to owner-occupied homes.
Miss Schaer Bish, the staff presenter, described the plan as "a pilot program" that would use $50,000 to fund up to five $10,000 forgivable deferred loans. She said the loans would be forgiven at a rate of $1,250 per year over eight years and that if a home were sold before the eight-year forgivable period the borrower would owe a proportionate repayment; if the property is resold into rental use before eight years, 100% of the assistance would become due.
Under the eligibility rules described to council, the property must be registered in the city’s single-family rental licensing program for three years prior to application; the borrower must obtain a primary (first-position) mortgage and the city would record its mortgage in second position. Miss Schaer Bish said the assistance could be used for down payment, closing costs or necessary repairs and that the structure mirrors the city’s existing housing rehabilitation mortgage approach.
Councilmembers pressed staff on details including deed restrictions versus recorded mortgages, the qualifying rental-history window and whether to limit awards by household income. Miss Scha Bish said deed restrictions have sometimes failed to be enforced in the past and the city prefers a recorded mortgage because it is consistently discovered in title searches. After discussion, council settled on three years in the rental licensing program for the house to be eligible (not the borrower) and kept the eight-year forgiveness schedule for the occupant.
Bridget, who leads housing and planning staff, told council the pilot will be funded from the general fund, though several councilmembers suggested the recent state marijuana-tax receipts could be tracked or used instead. Staff said proposals for the housing study RFQ—separate from the pilot—are due April 9 and the city expects to contract for an updated housing study in May.
The motion to approve the pilot (with emergency adoption) passed unanimously. Staff will draft program documents, work with the law department on mortgage forms, and begin outreach to real estate agents, lenders and landlords.
The committee described the pilot as limited and evaluative: staff will report back after the initial awards so council can decide whether to extend or modify the program. Ending: council members said they supported a cautious, data-driven rollout and asked staff to return with application materials and an outreach plan.
