Iowa City is working to help low-income families become homeowners. Here's how.

Iowa City is going hands-on in its latest effort to address an affordable housing shortage.

The City has been working on the South District Investment Partnership Program for several years, overseeing projects in south Iowa City. They've also facilitated the purchase and sale of duplexes to create a better balance between renters and homeowners.

Since the collaborative program began, the city has sold six duplexes ? a total of 12 units ? to local low-income families. Four units will soon hit the market and the city has an additional six duplexes that will be rehabbed and sold to the community in the next few years.

The rehabilitation is comprehensive and “covers everything short of removing drywall and tearing open walls,” Doug Black, one of the city’s housing rehab specialists, said. That means installing brand-new cabinets, flooring, windows, gutters, siding and more.

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Residential rehab aids climate action goals

Renovations have also helped address some of the city’s climate action goals, with properties outfitted with full electric utilities, Black said. The properties also now use air-source heat pumps and furnaces.

The program is an effort to both encourage affordable home ownership while also reinvesting in the South District Neighborhood, Neighborhood Services Coordinator Erika Kubly told the Press-Citizen. The projects are concentrated along Taylor Drive and Davis Street. The city has also rehabbed and sold two duplexes on Sandusky Drive.

“We're hoping to create affordable homeownership opportunities for residents that already live in the neighborhood, and we're doing that by providing a home that is renovated and ready to move in,” Kubly said.

Neighborhood stabilization efforts began with the city’s University Neighborhood Partnership, a decade-long program that began in 2010 in a separate area of town. It serves as the basis for the new program.

The city hopes to increase home ownership and, thus, neighborhood stability by converting old rental properties.

“It's incredibly important,” David Powers, one of the city’s housing rehab specialists, said. “Especially within neighborhoods that are so highly occupied with rentals, where people turn over very quickly, having long-term residents who are invested in the neighborhood and what happens there is really, really important.”

Priority is given to current and former residents of the rehabbed homes and renters on Taylor Drive and Davis Street who are interested in home ownership.

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South District Investment Partnership qualifications

Buyers must have an annual income 80% below the area’s median income. In 2023, that means a maximum income of $64,650 for a one-person household and $73,850 in a two-person household.

The figures increase by between $8,000-$10,000 for additional income earners within the household. The city does factor in the income of current college students 24 years or younger.

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Prospective buyers must also complete a free homebuyer education course. The city also provides down payment assistance on a need-based scale based on guidelines outlined by the U.S. Department of Housing and Urban Development’s HOME program, designed to provide grants to local municipalities for the creation of affordable housing for low-income individuals.

Program offers financial assistance

Down payment assistance can help eliminate costs for homeowners as well, Kubly said. A $200,000 home can be trimmed to a $125,000 mortgage after the city’s $25,000 down payment assistance and $50,000 rehab assistance kick in.

Iowa City officials will continue work on the remaining six properties once both units within the home have been vacated. The city does not want to displace residents simply for renovations.

Interested residents should reach out to the city now, Kubly said, where they can run through a list of available homes.

“People are excited for an affordable homeownership opportunity,” Kubly said. “We've had several people say they didn't realize they could be homeowners, but with the city's program and with down payment assistance, it's more affordable than when they were renting.”

Ryan Hansen covers local government and crime for the Press-Citizen. He can be reached at [email protected] or on X, formerly known as Twitter, @ryanhansen01.

This article originally appeared on Iowa City Press-Citizen: Iowa City South District program addresses affordable housing shortage