Best Practices - Vol. IV

Mayor Saul N. Ramirez

First-Time Homebuyer/New Construction Program

The City of Laredo has placed great importance on increasing the availability of affordable housing for low income individuals and families within the community. The driving force for these efforts is the disparity that exists between the income levels of residents and the high cost of housing. Notably, 37 percent of the City's households live in poverty. Laredo's high rate of growth further compounds the problem: Laredo is recognized as the fastest growing city in Texas and second fastest growing in the U.S.

To address the housing needs of low income residents, Laredo has been successful in implementing a First-Time Homebuyer/New Construction Program that has made dreams of homeownership a reality for many and that has prompted a renewed interest on the part of the private sector to construct affordable housing.

In partnership with the U.S. Department of Housing and Urban Development and the private sector, the City, since 1992, has assisted 134 families in the construction and purchase of single family housing. Projects undertaken include the Poncho De La Garza Affordable Housing Development, the East Laredo Affordable Housing Project, and the South Laredo Affordable Housing Project. Scheduled to begin in mid-1997 is the construction of an additional 100 single family units in the City's Los Obispos Subdivision.

Contributing to the Laredo program's success is the use of innovative construction and financing strategies and the participation of the City's private sector. In essence, HOME funds are utilized to pay project subsidies and finance interim construction; permanent financing is provided by a participating local lender. The HOME subsidy provided to the project eliminates the need for any down payment and helps to ensure the long term affordability of the unit. The participation by the private sector allows HOME funds to revolve and be used in creating additional housing opportunities for low income individuals and families. To keep the cost of construction to a minimum, the City assists participating first-time home buyers in the administration of sub-contractual agreements for all trade work. This further creates employment opportunities for small businesses and low income individuals. Donations from the private sector in the form of reduced and/or waived fees also contribute to the program's success.

This program facilitates home financing and construction of affordable housing, and also allows assisted home buyers to live under more suitable housing conditions. Many of the assisted families have previously been tenants of substandard housing and have experienced severe cost burdens. Participation in homeownership has given assisted families a sense of accomplishment and has helped to promote pride in their homes and their community. Officials in Laredo note that the City's First-Time Homebuyer/New Construction Program has served as a catalyst for other public and private ventures in support of the construction of affordable housing. In recognition of the market demand, local builders have climbed on the bandwagon and are looking to partner with the City as a means of tapping into HOME program funds to facilitate homebuyer assistance initiatives.

Contact: Office of the Mayor, (210) 791-7309
Erasmo Villarreal, Community Development Programs, (210) 791-7364

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The United States Conference of Mayors

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