PimaTucson LIGHTHOUSE will provide downpayment assistance and locked-in low interest rates for first-time homebuyers.
The Tucson Industrial Development Authority (Tucson IDA) and the Pima Industrial Development Authority (Pima IDA) have developed yet another innovative and inclusive housing program, investing $25M for first-time homebuyers. The City of Tucson Mayor and Council provided the final authorization to issue the bond that will provide capital for the program.
The downpayment assistance program, called PimaTucson LIGHTHOUSE (LIGHTHOUSE), is set to launch come the beginning of August. With this program, homebuyers can lock in lower interest rates paired with 4% down payment assistance that can turn into a grant after residents live in their household for 3 years. On average, 4% down payment equates to about $14,000 in assistance to buy their first home. In addition to first-time homebuyers, this program also benefits veterans and working families in lower-income zip codes.
PimaTucson LIGHTHOUSE was established in response to the ever-changing and costly housing market. With a bond-funded down payment assistance program, a low rate is locked in which means even if the Federal Reserve raises interest rates, homebuyers through this program will not be impacted. The Federal Reserve is expected to raise rates twice more this year, which means LIGHTHOUSE will be able to provide a below-market interest rate for local homebuyers who need the extra help. Bond-funded programs used to be the standard, but the last bond-funded program through the IDAs was 2008.
“The conditions were finally right to bring back a bond-financed down payment assistance program. Interest rates have been so unpredictable, so we wanted to offer home buyers some surety and security by locking in an interest rate that won’t increase, even if the Federal Reserve continues to push rates up,” explained Tucson IDA CEO Dre Thompson.
Down payment assistance is a critical component of an overall housing affordability strategy. Almost 40% of potential homebuyers say that a lack of a down payment is preventing them from moving into a home.
"This new $25 million bond program will give first time homebuyers a significantly low interest rate, paired with four points of assistance for downpayment or closing costs," said Pima IDA President Diane Quihuis.
The partnership between the Tucson IDA and Pima IDA has resulted in a number of innovative housing programs including Pima Tucson Homebuyers Solutions, Pima Tucson ADVANTAGE, and the Essential Workers Housing Fund. Combined, these organizations have infused almost $2,000,000 of their own capital and attracted $3,650,000 of public and private capital to support the local housing market. The programs provide housing relief to over 7,000 families and over $10,000,000 in downpayment assistance since 2013.
PimaTucson LIGHTHOUSE is expected to be in high demand, anticipating the funds for the bond will exhaust before the end of 2023. Lenders who would like to offer the program must sign up for a free certification to offer LIGHTHOUSE and participation in a digital training.
“Volatile markets demand intelligent, creative and dedicated people to navigate. The Tucson and Pima IDAs never cease to impress when confronted with challenges, often dedicating their own resources when required. The community we all share greatly benefits from their laser focus on the mission of financing and providing affordable housing,” commented HFA expert of Stifel, Scott Riffle.
With support from Tucson Mayor Regina Romero and Council, PimaTucson LIGHTHOUSE symbolizes the “beacon” of hope for first-time homebuyers in an unprecedented and fluctuating market, delivering access to affordable housing in our local community.