Maximizing IDA Savings and Match by Leveraging Additional Homeownership Assistance Programs

Successful IDA homeownership programs rely upon an abundance of housing assistance products aimed at complementing and leveraging their IDA matching grants. Households earning 200% of poverty must rely upon housing assistance programs that offer much more than the average $2,000 IDA matching grants. Many homebuyers’ matching IDA grants are in amounts that do not even cover the closing costs of their first mortgage. Fortunately, an ever-increasing number of local, state and federal programs provide financial aid to low-income first time homebuyers. The challenges for IDA homeownership program administrators are to recognize affordability gaps, identify affordable housing finance products, and determine how these products can be layered to provide the greatest benefit to the IDA participant. This White Paper will provide a framework for use by practitioners to help them explore the utilization and layering of various funding streams in order to maximize the leveraging of the IDA funds. The first section of this paper will focus on supply and demand issues inherent in local markets and how to identify affordability gaps. The next section will review housing subsidies that can effectively fill the gap. The third section will use a sample affordability analysis spreadsheet to explain how the subsidies can be layered and used in tandem with the IDA funds.