Summary
The
American Dream Downpayment Initiative (ADDI) was signed into law
on December 16, 2003. The American Dream Downpayment Assistance
Act authorizes up to $200 million annually for fiscal years 2004
- 2007. ADDI will provide funds to all fifty states and to local
participating jurisdictions that have a population of at least 150,000
or will receive an allocation of at least $50,000 under the ADDI
formula. ADDI will be administered as a part of the HOME
Investment Partnerships Program, a formula grant program.
Purpose
ADDI
aims to increase the homeownership rate, especially among lower
income and minority households, and to revitalize and stabilize
communities. ADDI will help first-time homebuyers with the biggest
hurdle to homeownership: downpayment and closing costs. The program
was created to assist low-income first-time homebuyers in purchasing
single-family homes by providing funds for downpayment, closing
costs, and rehabilitation carried out in conjunction with the assisted
home purchase.
Type
of Assistance
ADDI
will provide downpayment, closing costs, and rehabilitation assistance
to eligible individuals. The amount of ADDI assistance provided
may not exceed $10,000 or six percent of the purchase price of the
home, whichever is greater. The rehabilitation must be completed
within one year of the home purchase. Rehabilitation may include,
but is not limited to, the reduction of lead paint hazards and the
remediation of other home health hazards.
Eligible
Customers
To
be eligible for ADDI assistance, individuals must be first-time
homebuyers interested in purchasing single family housing. A first-time
homebuyer is defined as an individual and his or her spouse who
have not owned a home during the three-year period prior to the
purchase of a home with ADDI assistance. ADDI funds may be used
to purchase one- to four- family housing, condominium unit, cooperative
unit, or manufactured housing. Additionally, individuals who qualify
for ADDI assistance must have incomes not exceeding 80% of area
median income.
Eligible
Activities
ADDI
funds may be used for downpayment, closing costs and, if necessary,
rehabilitation in conjunction with home purchase. ADDI funds used
for rehabilitation may not exceed twenty percent of the participating
jurisdiction's total ADDI allocation. The rehabilitation assisted
with ADDI funds must be completed within one year of the home purchase.
Funding
Status
In
FY 2007, Congress appropriated $24,750,000 for ADDI. Previously,
Congress appropriated $74,513,000 in FY2003 and $86,984 in FY2004,
$49,600,000 in FY2005 and $24,750,000 in FY2006.
HUD has issued formula
allocations for FY 2007 to assist participating jurisdictions
in preparing their consolidated plans.
Obtaining
Assistance
First,
check the formula
allocation page to determine whether your local HOME
administering agency received ADDI funding. If they did not
receive ADDI funding, ADDI funds may be available through
your state. Every state received ADDI funds. The contacts for state
are available in the HOME
administering agency list.
For further information regarding the administration of ADDI, visit
our Q&A page (PDF
| Word).
|