Strategies to Minimize Displacement

Down Payment and Closing Cost
Assistance Programs

Benefit: Closing	Problem addressed: Removal

homeownership gap; building	of potential barrier to

generational wealth	homeownership

t Scale of impact: Community-
* ^ wide, individuals

Introduction

Brownfields—or properties with environmental contamination or potentially contaminated land—are disproportionately
located in or near communities of color and low-income communities. Residents near these properties may face heightened
health hazards and economic disinvestment until the site undergoes assessment and cleanup, which can be costly and
lengthy. Safely reusing a brownfield site is an opportunity to improve community health, spur economic investment, and bring
in new amenities. However, brownfield redevelopment can also exacerbate affordability and displacement concerns. As rent
and property taxes rise and it becomes more expensive to live in a community, lower-income residents and small businesses
may be displaced. Strong, early community engagement in the brownfields reuse process presents an opportunity for the
community to have a meaningful role and input on how to minimize displacement throughout the planning, cleanup, and
reuse process. Community leaders, stakeholders, and practitioners can be proactive and implement strategies to minimize the
risk of displacement. These strategies take time, resources, and political will to implement, and they are most effective if put
into place before displacement is already occurring.

Tool: Down Payment and Closing Assistance Programs

Homeownership is an important tool for families to build generational wealth in the United States. Supporting
homeownership in communities experiencing brownfield redevelopment is critical
to helping long-term residents remain in their communities, maintain community
connectivity, and benefit from the economic impacts likely to accrue from
neighborhood revitalization.

Unfortunately, the high upfront costs of home buying, such as the necessary down
payment and closing costs, are barriers to entry for many first-time or first-generation
homebuyers. This is especially true for younger people and people of color who have
been historically excluded from homeownership opportunities.

Down payment assistance (DPA) programs can support first-time homebuyers who
qualify for assistance by providing grants, loans or other incentives to defray the expense of down payment and closing costs.
Federal, state, and local governments typically fund public DPA programs. Other organizations in the private or nonprofit
sectors often leverage DPA programs to further assist first-time homebuyers in the process of buying a home.

Types of Down Payment Assistance

Some common ways down payment assistance can be provided to the homebuyer include:

1.	Grants, or direct payments, are the most common type of assistance. This assistance does not need to be repaid.

2.	Deferred Payment Loans do not need to be repaid until the home is sold, refinanced, or otherwise paid off.

3.	Interest Rate Reductions provide a lower interest rate than a typical home loan.

4.	Forgivable Loans do not need to be repaid if the buyer lives in the home for a certain number of years.

brownfields and DevetoPedin wrtn&ship with EPAs office Of Brownfields and Land	Smart Growth America

LAND REVITALIZATION RcvitoliZCltiOn (5105T) EPA 560" F-24-005 | April 2024.	^llir Improving lives by improving communities

O Administered by: Government
f) or Nonprofit organizations

Source: AN DP, Example ofANDP's
single-family development in partnership
with BIPOC developer Fortas Homes.


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Tips for Success

Reaching prospective homebuyers through education, engagement, and information-sharing is essential for a successful and
sustainable DPA program. State and local governments, nonprofits, and other
organizations offering DPA should have a targeted plan to engage community
members and other audiences about the program. Education and information
outreach should be ongoing and available on demand. Target audiences for
outreach should include prospective homebuyers, real estate professionals,
mortgage lenders, and HUD-approved housing counseling agencies. Tracking
participation in DPA programs is critical; strong participation demonstrates the
need to prioritize and allocate funding to support DPA.

The importance of DPA is outlined
in a national study of Home
Mortgage Disclosure Act data that
found denied mortgage applications
totaled $3.7 billion and that 33
percent of the denied mortgage
applicants were eligible for down
payment assistance.1

To ensure eligible community members can access DPA programs, program
administrators should leverage engagement strategies that educate people before
they start the process of buying a house. This way, potential homebuyers will know

how to access these important tools before making a home purchase decision. Effective communication about DPA programs
for first-time homebuyers can significantly impact homeownership and build generational wealth.

Case Study

The Atlanta Neighborhood Development Partnership (ANDP) is a nonprofit organization with a mission to develop,
finance, and advocate for affordable housing at a scale that promotes racial equity and healthy communities where families
thrive. A chartered member of the NeighborWorks Network, ANDP implemented a three-pronged affordable homeownership
model to increase Black homeownership. Within their model, ANDP established a loan fund aimed at increasing the number
of affordable housing units in the Atlanta region. The low-interest loans provide growth opportunities for Black-owned
development and real estate firms, directly finance projects, and support other local organizations committed to affordable
housing. As a part of its "Closing the Gap " initiative to build or preserve 2,000 units of affordable housing by 2025, ANDP
has also committed to conducting at least $50M in business with BIPOC construction, real estate, property management, and
other sector-related organizations.

To address the homeownership gap for minority residents, ANDP maintains its own DPA program. Combined with other
service providers such as the City of Atlanta and other local jurisdictions, the Georgia Department of Community Affairs,
Federal Home Loan Bank of Atlanta, and local banks, ANDP offers 0 percent interest loans up to $20,000 through New
Market Tax Credits to eligible households. These loans help homebuyers cover closing costs to secure a mortgage.2

ANDP found that 93 percent of the 482 households benefiting from its DPA program were still currently living in the
same house paid for through ANDP. 215 homeowners who received DPA and lived in their homes for five or more years
accumulated an average of $88,797 in housing wealth in 2019, and $135,421 by 2021. These results demonstrate real
impacts in terms of wealth generation anti-displacement measures. The organization is also partnering with place-based
organizations like Westside Future Fund which focuses on Atlanta's historic westside neighborhoods at risk of displacement
due to a strengthening housing market.

Though its main intent is to close the gap in Black homeownership, ANDP has increasingly served submarkets with other
BIPOC communities. Since 2010, when ANDP began focusing on single-family homeownership during the Great Recession,
the organization has provided nearly 1,000 homebuyers with $15.7M in down payment assistance.

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1	https://downpaymentresource.com/professional-resource/analysis-finds-33-of-declinecl-inortgage-applications-were-eligible-for-
homebuyer-assistance/

2	https://www.iirban.org/sites/default/files/2023-Q9/l-low%20ANDP%20ls%20Advancing%20Affordable%20l-lomeownership%20
from%20Development%20to%20Down%20Payment.pdf

i	Links to external, non-EPA resources are provided for informational purposes only. References to external resources do not

g ilJtH	constitute an endorsement by EPA, and EPA does not take any responsibility for their content.

Developed in partnership with EPA's Office of Brownfields and Land	jjijj Smart Growth America

LAND REVITALIZATION RcvitoHzotiori (5105T) EPA 560" F"24"005 | April 2024.	^Ilir Improving lives by improving communities


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