The rollout of the programs comes as the average sale price of an Ohio home is up by more than 15%, about four points below the national average, data shows.
The programs will help “provide affordable and sustainable opportunities for Kettering residents to enjoy homeownership,” City Manager Mark Schwieterman said in the announcement.
Kettering has committed $1 million in American Rescue Plan Act funds while Day Air has been awarded about $1.8 million in Rapid Response Program grant funds, said Amy Schrimpf, city economic development manager.
Day Air is not allotting a specific amount to the programs, but is anticipating about $5 million in first mortgages and $1.25 million in home improvements with the partnership, a company spokesman said.
The programs will “help make the financial dreams of our members and our community more achievable,” Day Air President and CEO Bill Burke added.
Schrimpf said Kettering ARPA funds for both programs will be in the form of a zero-interest declining balance loans, which “will be completely forgiven in five years providing the homeowners remain in their home.”
First-time homebuyers can get up to a 10% down payment and cover closing costs up to $20,000 when paired with a Day Air mortgage, according to the Kettering business.
Officials said Day Air has agreed to provide special financing and terms for the remainder of the program.
The home improvement program aims to help Kettering residents make home upgrades that enhance property value by providing a special low-rate loan of which 40% — up to $20,000 — will be forgivable, according to Day Air.
Funds can be put toward a “large list” of exterior and interior home improvements as approved by the city, which will manage and service the ARPA programs and loans, officials said.
Applications for the homebuyers program can be made at dayair.org/firsthome while those seeking home improvement assistance can do so at dayair.org/improvehome.
More than 62% of Kettering housing is owner occupied, according to U.S. Census data. In October 2021, the median listing home price in the city was $182,500, up 14.1% year over year, Realtor.com data shows.
Statewide, the average sale price of a home in the first half of 2021 was up 15.8% compared to the same time in 2020, according to Ohio Realtors.
Nationally, home prices rose 19.5% in September year over year, according to the S&P CoreLogic Case-Shiller National Home Price Index.
That percentage was down slightly from August, the first decrease in the annual gain since May 2020, the index said.
Both Kettering programs have eligibility guidelines based on household incomes while the home improvement applicants’ projects must range from $5,000 to $50,000, according to Day Air.
“It is a very specific targeted market as to what these dollars can be used for,” Kettering Mayor Don Patterson said.
Kettering has been awarded about $6.9 million in ARPA funds and local officials have been told the city has qualified to receive a similar amount next year.
Patterson told the Dayton Daily News earlier this year his main priority was to spend ARPA money on projects or programs most impacted by the coronavirus.
“We don’t’ want to duplicate,” he said. “We don’t want somebody to get a lot of money and somebody (else) to get nothing. We want to help as many people as we can.”
About 12% of those funds should be spent on ARPA community programs, Schwieterman recommended in September.
The city’s proposed 2022 operating costs include $2 million in ARPA funds not designated for a specific use, records show.
BY THE NUMBERS
•$5M: Estimated value of first mortgages Day Air Credit Union anticipates from the programs.
•$350K: Median existing home price in U.S. in May.
•$182K: Median listing home price in Kettering in October.
•62.4: Percentage of owner-occupied Kettering housing.
SOURCES: Day Air Credit Union, National Association of Realtors, U.S. Census, Realtor.com.
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WHO IS ELIGIBLE?
Kettering and Day Air Credit Union are partnering on programs using federal funds to help current and future homeowners. Qualified applicants must:
Home improvement funds
•Be Kettering residents.
•Have projects from $5,000 to $50,000.
•Have closed-end loans.
•Be households making up to 120% of Area Median Income.
•Have loans subject to credit union approval
•Have city approved projects and contractors.
Homebuyer funds
•Be first-time homebuyers.
•Be households making up to 120% of Area Median Income.
•Be purchasing a home in Kettering.
•Have loans subject to credit union approval.
SOURCE: Day Air Credit Union.
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