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How does the program work?

Through the normal process of buying a home, low- to moderate-income families may not have adequate funds for the down payment and other up-front loan closing costs. Assistance up to $5,000 or 5% of the purchase price, whichever is less, can be provided in the form of a 5 year forgivable loan to assist home buyers in purchasing an existing home. These funds are only to be used for down payment and closing costs (prepaid costs such as taxes and insurance are not eligible), or to reduce the principle amount of a loan, and buyers must provide a minimum of $500 in cash toward the purchase.

Application for assistance is made through your lender in cooperation with the City of Columbia Community Develoopment Department. Once you have met your lender’s requirements to get a home loan, have your loan officer contact Community Development at (573) 874-7239.

Buyers are required to attend a home buyer education program, such as “Pre-Purchase Home Buyer’s Seminar ” or “MoneySmart” designed to help them understand their credit history and the process of buying and paying for a home. Local lenders are partners in this program. Some lenders offer home loans at terms that make home-ownership attractive and affordable. They can also refer buyers to the appropriate credit and home buyer education programs offered throughout Columbia. To register for the Pre-Purchase Home Buyer’s Seminar online, please click here.

In cases where additional assistance is required to meet lender or program underwriting requirements, the City may increase assistance to a maximum of $10,000 or 10% of the purchase price, whichever is less, in order to fill a financing gap. A deed of trust will be required where City assistance exceeds $5,000, and loans will be forgiven over ten years.

Buyer(s) must have an average combined credit score not less than 600 (subject to change). Completion of MoneySmart or other approved class may be accepted for scores lower than the required minimum.

Buyer(s) cannot have more than $15,000 in readily available resources.

Where can I buy a house?

Houses purchased under this program must be located within the Columbia city limits. Applicants must avoid flood plains to qualify.

What types of property are eligible?

The property can be a single or a multi-family (condominium) dwelling. City staff must inspect the entire property to determine that it meets the City’s property maintenance code. All deficiencies must be corrected prior to homeownership assistance funds being provided.

Houses built prior to January 1, 1978, must have an inspection to determine if deteriorated paint exists, and in certain situations, samples of deteriorated paint and bare soil may be taken and sent to a lab for analysis. If the paint is determined to contain lead above HUD’s level of concern, paint stabilization of deteriorated surfaces by trained personnel is required prior to homeownership assistance funds being provided. You are also restricted from moving into the home until it is determined that identified lead hazards are corrected and a clearance of the unit is achieved. A $500 grant is available to the buyer to help offset costs associated with lead hazard reduction; all costs over $500 must be paid by the buyer or seller.

Are there any other requirements?

Prior to receiving city funds, the buyer is required to sign a Deed of Trust, Promissory Note, and Borrower’s Agreement to prevent the leasing, subleasing or selling of their home for a minimum of five years. The Deed of Trust will be recorded at the Boone County Recorder’s Office. Funds provided for down payment and closing cost assistance shall be repaid on a prorated basis if the property is sold or ceases to be owneroccupied before the end of the affordability period.

The value of the property to be purchased cannot exceed $200,160.

What other programs are available?

Local lenders offer a number of loan packages — take the time needed to find the loan package that works best for you. You should also carefully read the informative brochure published by HUD, Don’t Be a Victim of Loan Fraud – Protect Yourself from Predatory Lenders.

Where can I get more information?

Contact a loan officer at a local bank, savings and loan, mortgage company, or credit union, or the Community Development Department on the 5th floor of City Hall at 701 E. Broadway.

Telephone: (573 )874-7239 (TTY: 1-800-MOR-ELAY)
Fax: (573) 874-7546