Down payment assistance program recommended by Justice and Memory Project set for approval

The ACC Commission will likely approve a program to help first-time home buyers with their down payments in March as recommended by the Athens Justice and Memory Project. This is part of the local government’s ongoing commitment to reparations for the victims of the urban renewal period of the 1960s and 70s.

ACC staff are recommending First American Bank and Trust for a grant of $718,400 to start a new down payment assistance program called HOME (Helping Overcome Mortgage Encumbrance). Through this program, First American intends to help families with low to moderate incomes become homeowners by offering up to $25,000 interest free.

First American will work with the Athens Justice and Memory Project and other stakeholders to target this assistance to underserved populations, such as those making under 80 percent of the area median income in certain census tracts. Outside of these census tracts, First American will seek out those making under 65% of the area median income for the program.

The Georgia Constitution normally stops local governments from giving away money without receiving a service in exchange, but this project is funded through the federal American Rescue Plan. That means it is not subject to the state gratuities clause and can go forward without legal barriers. 

Federal rules allow the prioritization of underserved populations, but First American’s down payment assistance program will be available to all regardless of race. 

The Justice and Memory Project is a local government committee created by Athens residents who grew up in Linnentown, a former neighborhood off Baxter Street that was destroyed in the 1960s. Their homes were purchased using eminent domain and then razed to allow the University of Georgia to build student dormitories.

This would be perfectly legal, ethics aside, except that Linnentown residents were not justly compensated for their property as required by the fifth amendment of the US Constitution. UGA Geography Professor Jerry Shannon analyzed these purchases and found that the local government underpaid residents by about $5 million. The Justice and Memory Project decided that a down payment assistance program like the one First American is proposing should count towards the repayment of that debt. The local government already awarded $531,000 to Historic Athens last year for home repair assistance as part of their commitment to make amends.

First American’s proposal has very low administrative costs (only 1.4 percent), meaning the vast majority of the $718,400 will go to the people it is intended to serve. This was one reason why ACC staff is recommending First American for the award. Another reason is that the bank is already an approved lender with the Georgia Department of Community Affairs, meaning they can help prospective home buyers gain additional down payment assistance through DCA’s Georgia Dream program.

With the skyrocketing home prices Athens has seen in recent years, it seems likely that many applicants would need DCA’s additional assistance for their down payments. It’s also possible that even the two programs combined would not be enough. If First American has difficulty in finding applicants for down payment assistance as the program is currently structured, they may choose to offer more help to fewer people instead.

First American’s program is only available to buy homes in Athens. They will offer this assistance as a 0% interest revolving loan. After loan repayment, the funds can be redirected to a new first-time homebuyer. Such a revolving loan fund was recommended in the affordable housing investment strategy accepted by the commission last year.

Commissioner Ovita Thornton
Commissioner Ovita Thornton

Commissioners praised First American’s down payment assistance program at their agenda-setting meeting on Tuesday.

“This is one of the best partnerships that I have seen,” said Commissioner Ovita Thornton. “I think when we’re dealing with loans and income and housing, you need a professional that’s already in that field. I think this is going to be a major win for the community.”

The commission is on track to give their formal approval for the program on March 5.

Help APN continue covering local elections for the Athens area!
Please consider becoming a member or giving a one-time donation via PayPal.

Leave a comment

Your email address will not be published. Required fields are marked *