Summary
The
American Dream Downpayment Initiative (ADDI) was signed into law
on December 16, 2003. The American Dream Downpayment Assistance
Act authorizes up to $200 million annually for fiscal years 2004
- 2007. ADDI will provide funds to all fifty states and to local
participating jurisdictions that have a population of at least 150,000
or will receive an allocation of at least $50,000 under the ADDI
formula. ADDI will be administered as a part of the HOME
Investment Partnerships Program, a formula grant program.
Purpose
ADDI
aims to increase the homeownership rate, especially among lower
income and minority households, and to revitalize and stabilize
communities. ADDI will help first-time homebuyers with the biggest
hurdle to homeownership: downpayment and closing costs. The program
was created to assist low-income first-time homebuyers in purchasing
single-family homes by providing funds for downpayment, closing
costs, and rehabilitation carried out in conjunction with the assisted
home purchase.
Type
of Assistance
ADDI
will provide downpayment, closing costs, and rehabilitation assistance
to eligible individuals. The amount of ADDI assistance provided
may not exceed $10,000 or six percent of the purchase price of the
home, whichever is greater. The rehabilitation must be completed
within one year of the home purchase. Rehabilitation may include,
but is not limited to, the reduction of lead paint hazards and the
remediation of other home health hazards.
Eligible
Customers
To
be eligible for ADDI assistance, individuals must be first-time
homebuyers interested in purchasing single family housing. A first-time
homebuyer is defined as an individual and his or her spouse who
have not owned a home during the three-year period prior to the
purchase of a home with ADDI assistance. ADDI funds may be used
to purchase one- to four- family housing, condominium unit, cooperative
unit, or manufactured housing. Additionally, individuals who qualify
for ADDI assistance must have incomes not exceeding 80% of area
median income. If you are interested in obtaining downpayment assistance
through ADDI, please contact your local
HOME administering agency.
Eligible
Activities
ADDI
funds may be used for downpayment, closing costs and, if necessary,
rehabilitation in conjunction with home purchase. ADDI funds used
for rehabilitation may not exceed twenty percent of the participating
jurisdiction's total ADDI allocation. The rehabilitation assisted
with ADDI funds must be completed within one year of the home purchase.
Funding
Status
In
FY 2003, the ADDI appropriation was $74.5 million. The FY 2004 appropriation
was $87 million. HUD has issued formula
allocations for both FY 2003 and FY 2004 to assist participating
jurisdictions in preparing their consolidated plans.
If
you are interested in obtaining downpayment assistance and your
city is listed as a recipient
of ADDI funds, please contact your local
HOME administering agency. If your city is not listed, ADDI
funds may be available through your state. Every state received
ADDI funds. The contacts for each state are listed under your local
HOME administering agency.
For further information regarding the administration of ADDI, visit
our Q&A page (PDF
| Word).
|