Utah will loan first-time homebuyers $20,000 for new homes
Jun 5, 2023, 5:00 PM
(Kristin Murphy/Deseret News)
SALT LAKE CITY — In less than a month, a program begins to loan first-time homebuyers $20,000. The loan is meant to help afford new homes in Utah.
The force behind this effort is Senate President Stuart Adams, R-Layton, who sponsored S.B. 240, which passed the Legislature last session, became law with the governor’s signature and the First-time Homebuyer Assistance Program was created.
Under the program, qualifying homebuyers can use the money for a down payment, closing costs and reducing the interest rate on the qualifying mortgage loan or any combination of the three.
Under the program, only new homes priced at $450,000 or less qualify, Adams said.
The average Utah home value is $512,582. That’s down 3.8% over the past year and goes to pending in around 19 days, according to Zillow.
Who is eligible for a $20,000 loan?
“OK, remind our listeners how it works and who is going to be eligible,” Dave said.
Adams those who qualify are first-time homeowners buying new homes.
“It’s first homebuyers. So you’ve had to live in Utah for a year before you close, which means if you find a new home, which this is for new homes, five or six months into the process, and it takes five or six months to build it and you’ve lived in Utah that long, you qualify. Now this isn’t just a gift. You have to pay it back when you sell the home,” Adams said.
“President, just to be clear. If I qualify for the house, I qualify for this loan. So other than that, I don’t have to show any other financial ability because if I can buy the house, the state would also help me out with this loan,” Maura asked.
“Absolutely. So what you do is you can go to Utah housing.org or you can go find your bank or mortgage lender or credit union and make application,” Adams said. “If you qualify for the loan, they will hold this money for you, this $20,000 for 90 days while you go look for a home.
“And then after that 90 days, if you need more time, you can get an extension. But then you make an offer and then they’ll work with you through the construction process to be able to have the money available when you close,” he said.
New homes only
“Just to clarify, to make sure people are crystal clear on this,” Dave said. “This is not to help with existing homes. This is for new builds. Is this a single-family dwelling or can I use it for a condo or a townhouse?”
“You can use it for a condo or a townhome or a single-family dwelling,” Adams said, adding this program was created out of the dearth of affordable homes for single families.
“This is to stimulate and try to motivate cities and builders to build a home under $450,000 or condo or townhome to help with that affordability problem,” Adams said. “The more we get on the market, the more homes we get built, the better off we’re going to be with affordability.”
“OK, so I got asked the question: How much money do we have?” Maura asked. “Can everyone who applies this year probably get some? Are you going to maybe allocate some more at the next session? Is there enough money for anyone who wants it?”
“We put $50 million into the program. That’s enough for 2,500 families If you figure maybe four people, a couple of kids, four people per family — that’s 10,000 Utahns that will actually qualify.”
“Again, when you sell the home or refinance it, the money will go back into the program,” Adams said, “and if the program is successful, we’ll look at maybe adding more money to it, but this initial effort is $50 million. And that’s quite an effort.”
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