Williamstown Affordable Housing Trust Chairman Thomas Sheldon and Trustee Dick DeMayo review the minutes from a prior meeting.
WILLIAMSTOWN, Mass. — For people of modest means, it can be difficult to chart a path to home ownership.
Williamstown is offering a MAP.
The board of the town's Affordable Housing Trust on Wednesday approved the town's first-ever mortgage assistance program. (See complete text below.)
The initiative, modeled after a similar program in Lenox, will offer grants of up to $15,000 to first-time homeowners with households earning up to 80 percent of the area mean income.
The trustees met with representatives of two area lending institutions this spring to hammer out details of the plan, and approved the framework at their last meeting, pending approval of town counsel from the firm of Kopelman & Paige PC.
On Wednesday afternoon, attorney Joel Bard send the trustees a letter giving the plan the firm's blessing.
Bard wrote that there may be minor changes necessary to the wording of the program's guidelines, but the committee got the go-ahead to start promoting the grants to lending institutions and local real estate agents.
"It's in their interest and our interest but, most importantly, in the potential homeowners' interests to know about this opportunity," board Chairman Thomas Sheldon said.
After a potential homeowner is approved for a mortgage on a home in Williamstown, he or she will be able to apply for a grant under the program. Although it is referred to as a mortgage assistance program, the trustees have discussed a wide range of potential uses, including non-cosmetic improvements to a home either to bring it up to code or to make it more energy efficient and, therefore, more affordable.
The chairman of Williamstown's Affordable Housing Committee attended Wednesday's meeting and complimented the trustees on the initiative and the speed with which it has been brought to fruition.
"On behalf of the committee, I want to commend the trust for initiating this and making it happen," Van Ellet said. "It's a great complement to a lot of the effort that's been going on the last couple of years. It's going to be reaching out to families.
"It's very different from what's already going on."
Ellet referred to the senior housing project at Highland Woods, on which developers hope to break ground later this summer.
The AHT has financially supported the senior apartment complex with money the trust was awarded by town meeting from the town's Community Preservation Act assessments. The CPA money also is funding the MAP, although on Wednesday, the trustees discussed going after private funding sources to supplement its coffers.
Also on Wednesday, the trustees and Ellet discussed how the two town boards can work on an action plan for the town's subsidized housing efforts.
Sheldon shared an unsolicited proposal for such a plan that was submitted by a town resident.
"She makes what to me is a persuasive case that having an action plan is a helpful step in seeking grants but also in organizing our own thinking and ascertaining where we are and what we need," Sheldon said.
"As an 'Exhibit A,' this person sent me what could be a section of an action plan pertaining to a home ownership program like the one we just put in place."
Ellet agreed that an action plan is necessary for the town.
"Unfortunately, the Affordable Housing Committee over the last couple of years was in the middle of a lot of things and never got to putting together a comprehensive plan with a lot of steps and clarity about where we're going and how we're going to get there," Ellet said. "We'd like to work with you on that."
Ellet said his committee plans to hold a retreat session in August or September to, among other things, talk about the town's next steps in addressing its need for affordable housing.
WILLIAMSTOWN MORTGAGE ASSISTANCE PROGRAM
The Williamstown Affordable Housing Trust proposes to institute a program (“Program”) of assistance to would-be homeowners in Williamstown. The Program will be aimed at households with moderate income (as defined by the Program Guidelines) but able to meet the financing requirement of local lending institutions. Our aim is to add to the economic diversity of the Town’s population by making home ownership more accessible and affordable.
The Trust intends to keep the Program simple and streamlined—relying heavily on the lending institutions to determine which applicants appear to qualify for the Program and have the long-term capacity to meet the various costs of home ownership.
In furtherance of these objectives, the Trust has adopted the following guidelines for the Program. The Trust reserves the right, and indeed anticipates the future need, to refine and modify any and all aspects of the Program Guidelines as experience is gained in implementing the Program.
Eligibility: Applicants must (a) be “first-time homebuyers” as that term is defined under 42 U.S.C §12704(14) and interpreted by the lending institution; or (b) after having lost employment, be relocating to Williamstown in order to begin a new job located within fifty (50) miles of Williamstown; and (c) have family income at or below 80% of the Area Median Income, a number that varies according to family size (in 2014, for example, $51,150 for a family of two; $62,900 for a family of four). Family income comprises all sources of income received by the borrower(s) and spouses/partners. Applicants need not be residents of Williamstown but must purchase a home in Williamstown. Applicants must be approved for a mortgage by a lending institution with an office in Williamstown. The Trust will make a decision on the grant application based on a pre-qualification but will only fund a given grant at the time of closing. For grants which are to be expended in their entirety on the date of closing, the Trust anticipates making payment of grant funds to buyer’s counsel’s IOLTA account, to be disbursed with other funds at, but not before, the time of closing. For grants which are to be expended in whole or in part post-closing, the Trust anticipates the lending institution overseeing the post-closing disbursement of funds in accordance with such lender’s typical construction loan and/or escrow procedures, and in accordance with the terms and conditions of the grant.
Permissible Uses of Grant: Grant funds will be issued through the lending institution and may be used for these purposes:
So-called “pre-paid” items including, without limitation: (i) the initial one-year up-front homeowner’s insurance cost; (ii) fuel oil adjustments made at the time of closing; (iii) real property tax adjustments made at the time of closing
Private mortgage insurance including advance payment of up to five years of insurance
Property tax escrow account
Homeowner’s insurance escrow account
Necessary repairs for safe habitation, such as roof, furnace, wiring, plumbing
Installations that promote energy efficiency and thereby reduce maintenance costs, such as insulation, energy efficient windows, high efficiency heating system
Note: Cosmetic or optional home improvements are NOT eligible expenses.
Qualifying Properties: Grants may be applied to the purchase of a single-family house, duplex, condominium, townhome or qualifying mobile home in Williamstown. Purchase of a newly constructed home is acceptable but a grant may not be used for construction costs and a certificate of occupancy will be required at closing. The property must be deemed affordable by the Trust according to Federal, Commonwealth and/or regional guidelines.
Repayment: Grant recipients who no longer live in the acquired property as a primary residence or no longer own such property within five years of purchase must repay the Trust a pro-rated amount corresponding to the remainder of five years, e.g., 40% repayment if residence ends in three years. The repayment obligation shall be secured by a second mortgage on the acquired property.
Grant Terms: Grants are for a maximum of $15,000 of eligible expenses and will be made on a first-come, first-served basis. Grants will be made as long as funds are available, as determined by the Trust.
Privacy / Anonymity: The Trust prefers not to know the identity of Grant applicants during the time the Trust is evaluating individual Grant proposals. Grant Applications will be made through participating lending institutions. Applicants will not make applications directly to or have direct communication with the Trust during the Trust’s Grant evaluation process.