Among more than 200 budget amendments proposed by Virginia’s governor that lawmakers are preparing to consider is one that would cancel the creation of a $5 million program to help low-income families buy homes.
The pilot program would provide grants for people who earn up to 60% of an area’s median income to put toward a down payment on a home. The grants would be forgivable if recipients regularly pay the mortgage and live in the home for at least 15 years.
Bob Adams, chair of the board of directors of Habitat for Humanity Virginia, supports the program. He said few existing housing assistance programs help families with incomes that low and said much state and federal housing assistance money currently is geared toward rentals.
“So what’s different about this is, it’s a home ownership program and it’s deeply targeted,” said Adams, who has spent more than 40 years working in the affordable housing industry.
Habitat’s Virginia organization supports nearly 40 local Habitat affiliates around the commonwealth, including nearly a dozen based in Central, Southside and Southwest Virginia. Adams said the nonprofit network helps about 100 Virginia families each year acquire a home, and the proposed program would help Habitat work toward its goal of doubling that figure.
Gov. Glenn Youngkin’s press secretary, Christian Martinez, said the governor made his amendment to cancel the down payment assistance program “after careful consideration” because the commonwealth “already has existing programs that provide down payment assistance and that support affordable housing.”
“He remains committed to ensuring stable, affordable housing for all Virginians and will continue to work with legislators and communities to increase homeownership and our affordable housing in Virginia,” Martinez said in a statement.
The state Department of Housing and Community Development provides down payment assistance through programs including the HOMEownership Down Payment and Closing Cost Assistance program, or DPA, and the Virginia Individual Development Account, or VIDA, said agency spokesperson Alexis Mehretab.
Mehretab declined to detail how such programs differ from the proposed $5 million program, citing the fact that the state budget has yet to be finalized.
Comparing descriptions of the programs shows that the DPA program helps first-time homebuyers at or below 80% of the median income, compared to a cap of 60% under the new program.
The VIDA program is a savings match that offers $8 for every $1 the participant saves up to a maximum of $4,000.
“DHCD is awaiting the signed budget for guidance on the agency’s future involvement in any new programs,” Mehretab said in an email.
Legislators in the state Senate and House of Delegates are reconvening in Richmond starting Wednesday to consider Youngkin’s amendments to the budget and to bills on topics such as skill games, small modular nuclear reactors and broadband deployment.
The Republican governor’s budget amendment to cancel the down payment assistance program would negate a budget amendment creating it; that first amendment was endorsed by a conference of eight Democratic and four Republican lawmakers and adopted by the Democratic-controlled legislature.
The lawmakers’ amendment authorized the state Department of Housing and Community Development to set up the $5 million program and included requirements such as developing a way to gauge its long-term effectiveness.
One of the dozen budget conferees, Sen. Creigh Deeds, D-Charlottesville, said he was “disappointed” with Youngkin’s amendment.
“I saw it as assisting first time homebuyers,” Deeds said via email.
Adams praised the fact that Youngkin chose not to touch the two-year state budget’s allocation of $175 million to the Virginia Housing Trust Fund, which provides low-interest loans to developers supplying affordable housing.
But he noted that the fund’s Affordable and Special Needs Housing program is only available to developers building at least five housing units at a time.
“Very often in rural communities, housing organizations, including Habitat affiliates, are doing houses one at a time and they’re scattered. That kind of approach is a difficult fit for the existing programs,” Adams said.
Generally speaking, Adams said it “makes all the difference in the world” when people can buy homes because they can build equity and enjoy more stable housing.
“What we’ve found over many, many years is that it makes a huge difference in the trajectory of people’s lives,” he said.