45 Utahns buy homes in initial week of $20k assistance program
Aug 3, 2023, 5:14 PM
SALT LAKE — More than $3 million has already been spoken for during the first week of Utah’s new, $20,000 first-time homebuyer assistance program.
Utah lawmakers allocated $50 million for the program.
Utah Housing Corporation started funding the assistance loans on July 25, since then 45 Utahns have already completed a purchase of a newly built home, townhome, or condo totaling $900,000 in assistance loans.
“We’re really excited about that,” said Jonathan Hanks, the corporation’s chief operating officer. “There’s a lot of enthusiasm towards it and there’s a lot of people who are sending in their reservation requests.”
On top of the closed loans, Utah Housing reports that they have received 113 reservations that are either approved or pending, which total $2,260,000. There are 2,142 reservations remaining.
In order to make a reservation, potential buyers don’t need to already have a new home, townhome or condo selected or under contract. They just need to be pre-approved by a participating lender.
So far, the average home purchase price has been $376,722 and the average assistance loan amount has been $19,770.
The program is only available for new construction and will provide a loan for up to $20,000 that can be used for any combination of down payment, closing costs or to permanently buy down the mortgage interest rate.
Hanks explained that a two-point rate buydown in current conditions can amount to significant savings for buyers.
“You’re going to be saving anywhere from $450 to $550 a month, which not only reduces your monthly payment but also creates an availability to maybe purchase more of a home than you thought you could otherwise,” Hanks said.
To qualify for the program, the newly built residential unit must be priced at or below $450,000 and recipients must be a resident of Utah for at least one year when they close on the loan.
“There is a lot of building going on and this has really encouraged a lot of homebuilders to really focus product in this $450,000 or below range,” Hanks said.
So far, 66% of the identified properties for the program are in Utah County. 27% of the properties are in Salt Lake County and 10% in Washington County.
“Eligible property types include detached single-family homes, condominiums, townhomes, or similar residential dwellings, including manufactured or modular homes attached to a permanent foundation,” according to the housing corporation.
The loans will have a zero percent interest rate and will not have monthly payments. Recipients will have to pay back the loan—or a portion of it—only when they sell the home or refinance the mortgage.
The repayment amount will be either the amount of the assistance loan or 50% of the home’s equity at the time of sale or refinancing, whichever is less.