AUBURN – A 20-percent increase in residential property values could force the city to change guidelines for a low-income homebuyer program.

Councilors will vote to make the city’s lease-buy program more generous. The program helps low-income residents qualify to buy homes in the downtown.

“We don’t want to be overly generous,” said Reine Mynahan, the city’s community development administrator. “We expect their budgets to be tight, but we do want to help them.”

Buyers who qualify can get loans from the city and Coastal Enterprises Inc., as well as grants. Some loans would be forgiven if the buyer pays off the others. In some cases, the city buys the property and leases it over time.

The program, which would be paid for with federal grant money, has two goals, Mynahan said. The first is to help low-income people buy homes. Almost as important a goal has been getting property owners to move into the city’s core downtown area – and cleaning it up and making it more livable along the way.

“The goal is to make subsidies deep enough to make basic housing affordable, but not higher-end housing,” Mynahan said. “All along, we’ve been looking for properties that need some work.”

Prices have risen

The program is open to those who earn 80 percent of the median income or less. For example, a family of four that makes less than $37,350 per year would qualify.

So far, the city has helped 10 families buy homes. Another 10 have been approved for loans but haven’t been able to find properties in their price range, Mynahan said.

“When we started the program in 2003, we looked at what houses were selling for in the target area and created the guidelines,” she said.

For example, a family of three that makes $29,900 per year would qualify for enough subsidies to help them afford a $90,300 duplex.

The average price for downtown duplexes in Auburn has risen to $91,835 as of May 2003, however. That’s just out of reach, Mynahan said.

“We’ve had several people that were approved and then just stalled,” she said. “They just could not move forward. We give them six months to look. We figure if they can’t find it today, they won’t be able to find it tomorrow.”

Mynahan’s changes would tie the amount of money a family could get to their total incomes – regardless of family size. That would help smaller families qualify.

“People that are five to a family qualify for a much larger share, but single or small families can’t qualify,” Mynahan said. “So we’ve made it based on straight income, and increased or decreased the subsidy so the payments come out to be 28 percent of household income.”

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