Lakewood staff propose $180,000 in down-payment assistance to Habitat for Humanity for three homes

City staff presented a request on June 15 to allocate up to $180,000 from Lakewood’s HOME/home-affordable-housing fund to provide down-payment assistance for three Habitat for Humanity homebuyers in a four-home phase. Staff said Habitat will sell the homes for about $275,000 and the city-funded assistance would reduce mortgage payments so buyers’ mortgage-to-income ratios meet affordability thresholds.

The assistance would be structured as forgivable 30-year loans secured by a deed of trust and affordability covenant. Staff said the city’s HOME program rules set a maximum mortgage-to-income ratio at 35% for program compliance, while Habitat’s internal policy targets a 30% cap; Habitat will apply its more restrictive 30% standard in underwriting.

The request draws from a designated city affordable-housing fund (about $900,000 available per staff) and would not exceed $180,000 total; the staff report said final per-household amounts will be determined when loan packaging is complete. The council was asked to place the item on the July 6 consent agenda for formal approval.

Background: Lakewood has partnered with Habitat for Humanity on prior phases that produced multiple permanently affordable owner-occupied homes. Staff said the loans would align with the city’s consolidated plan and HOME annual action plan requirements.

Next steps: If council approves at the July 6 consent agenda, staff will execute forgivable loan documents, record affordability covenants for each assisted home and proceed to loan closing with Habitat and eligible buyers.