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First-Time Home Buyer Program
Salt Lake City, Utah

Salt Lake City provides three-bedroom, two-bath models for new construction of first-time home buyer units.

Like most American cities, Salt Lake City, Utah, has experienced little new housing development in its inner-city neighborhoods in the past three decades. Since the early 1960s, these formerly working-class areas have deteriorated; incomes have decreased and crime has increased. The proportion of homeownership in these neighborhoods also declined over this period. However, because of a very tight housing market (the vacancy rate is only about 2 percent), rents have remained fairly high.

The city has had a long-standing interest in reviving these neighborhoods. Salt Lake City has had an active housing rehabilitation program for some 20 years and, until it was eliminated in 1990, used the Urban Homesteading Program to make units available for affordable homeownership. In 1992, when the city began to receive HOME funds, the staff developed a First-Time Home Buyer Program that combined acquisition and rehabilitation with new construction to provide affordable homeownership opportunities and help revitalize the inner-city neighborhoods. The program began operating in the spring of 1993.

Since then, more than $1.6 million in HOME funds have been used to acquire units for rehabilitation or infill sites for new construction and then to renovate the existing houses or build new ones. The completed units are sold to eligible families at very favorable terms.

Applications for the program are accepted in March each year and a drawing is held in April to establish a pool of qualified households. Program participants must be first-time home buyers and must have incomes no greater than 80 percent of the area median. They must also successfully complete two courses designed to help them with homeownership: a budgeting, credit, and financial counseling course offered by the Community Action Program and a home maintenance and repair class provided by Utah State University. These institutions also offer ongoing assistance to program participants to help them resolve issues related to homeownership.

Working with a pool of private lenders, the program offers an array of financing options including 3 to 5 percent mortgages with 15-, 20-, or 30-year terms. In addition, a portion of the mortgage may be deferred as a zero percent loan, which can be repaid upon sale of the property. Other sources of funding for the program include a Community Development Block Grant (CDBG), the city's housing trust fund, the state housing trust fund, the Community Development Corporation, and private investment.

The city provides several models for construction of new units, and the staff have worked closely with neighborhood councils to ensure that the designs are consistent and compatible with the existing architecture in the community. Each of the models offers at least three bedrooms, two baths, and some room for expansion. All rehabilitation performed under the program is designed to bring the unit up to the city's minimum preservation housing code. The average cost of rehabilitated units has been approximately $80,000; new units have averaged $91,500.

To date, some 73 units have been rehabilitated and 15 new units have been constructed through the First-Time Home Buyer Program. A total of 88 households, with incomes between 50 and 80 percent of median, have been assisted in attaining homeownership. At the same time, formerly vacant or deteriorated sites in inner-city neighborhoods have been vastly improved, substantially contributing to the overall revitalization of those areas.

The Salt Lake City First-Time Home Buyer Program has been successful because the city was able to redesign and expand existing programs as new resources became available. The city also built on or established relationships with funding sources, educational institutions, and service providers to maximize the chances for success. Finally, the program was crafted as an integral part of a neighborhood revitalization strategy, which not only broadens its impact, but helps to ensure the long-term viability of the housing it has created.

Contact: LuAnn Fawcett, Director, Housing and Economic Development, 801/535-6136

Copyright 1997 - 1998 - 1999 - 2000
Affordable Housing and HOME
National Association of Housing and Redevelopment Officials (NAHRO)
630 Eye Street, NW
Washington, DC 20001-3736
Telephone: (202) 289-3500
Fax: (202) 289-4949