In an effort to help first time homebuyers contend with rising real estate costs, the City of Pittsburgh set aside $15 million from federal American Rescue Plan aid for grants and deferred mortgages.
The Urban Redevelopment Authority [URA], the city’s economic development agency, discussed the emerging OwnPGH program on Thursday during its board meeting as a step toward finalizing the effort. The URA and the Housing Authority of the City of Pittsburgh [HACP] would run OwnPGH to help first time homebuyers who make 80% or less of the area median income [AMI]. If approved, OwnPGH would provide grants of up to $50,000 and HACP would add an additional $40,000 in deferred mortgages.
“We’re beginning this conversation and getting the program off the ground,” said Derek Kendall-Morris, URA’s manager of consumer lending. “The overall goal is to increase access to homeownership across the city to potential homebuyers at or below 80% AMI.”
The URA currently can only provide deferred financing to people who are buying houses that are being constructed or rehabilitated through the agency’s housing development programs, according to the URA staff’s report to the board. If approved, the program would allow the URA to give up to $50,000 to first time homebuyers who make 80% or below the AMI. In the Pittsburgh area, 80% of the AMI for a household of one is $53,100, and for a household of four it’s $75,850.
Under the new program, homeowners who purchase a place through OwnPGH will be required, for 30 years, to only sell to other buyers who make 80% of AMI or less.
Additionally, the housing authority’s deferred mortgage of up to $40,000 would require no regular payment and would have a 0% interest rate, according to the URA. If the house isn’t sold within 10 years, the deferred mortgage would be fully forgiven.
Kendall-Morris told the URA board that the agency has begun to increase their staffing to accommodate the expected increase in work from the new program.
“We believe we’re prepared to launch the program,” he said. “We’ve begun to staff up in preparation for launch. So we’re pretty much ready to go.”
Because funding for the program would come through the American Rescue Plan [ARP], it would have to be used by 2027.
The URA will accept feedback and continue to finalize the plan, and the board may vote on final approval in October. After that, a funding agreement will have to be finalized by the city in order for the ARP funds to be accessible.
Eric Jankiewicz is PublicSource’s economic development reporter, and can be reached at ericj@publicsource.org or on Twitter @ericjankiewicz.
