St. Petersburg enhances its down payment assistance program

City officials are increasing St. Petersburg’s down payment assistance from $60,000 to $75,000; however, state funding changes present new hurdles for citywide expansion.

Dr. Avery Slyker, assistant housing and community development director, highlighted the potential financial pitfalls Thursday at a Housing, Land Use and Transportation Committee meeting. She told city council members the $15,000 increase would align with Pinellas County’s program and soaring home prices.

Initially, the additional assistance would only apply to homes within the South St. Petersburg Community Redevelopment Area (CRA). While citywide expansion may have to wait, Slyker said the increased support would become available in fiscal year 2025, which starts in October.

“To some people who are maybe not part of this space may go, ‘Oh, $15,000 apiece, that’s a lot of money,’” said Councilmember Brandi Gabbard. “In the grand scheme of things though, it is not. And it will make all the difference to our homeownership opportunities in our city.”

Currently, homebuyers earning less than 80% of the annual median income – $48,650 annually – can receive up to $60,000 through a 0% subordinate mortgage loan. The home’s sales price and closing costs determine the amount, and borrowers must contribute 1%.

After 10 years of continued occupancy, the city will forgive the loan. The rules slightly differ for homebuyers earning up to 140% AMI, or $85,260 annually. Those residents must pay half of the 0% loan over a decade.

The most recent income limit data, according to a city website. Screengrab.

The city will then forgive the remaining balance after 10 years of continued occupancy. Moderate-income earners must also purchase a home in the South St. Pete CRA for less than $481,176.

Slyker said administrators hoped to increase the purchasing assistance citywide in the upcoming State Housing Initiatives Partnership Program (SHIP) funding cycle. “The bad news is, we are expecting one-third less of SHIP dollars this year,” she added.

Slyker said housing officials spent $2.4 million on down payment assistance last year. CRA coffers, supported by tax-increment financing (TIF) funding, provided $1.5 million.

The citywide program relies on SHIP funding; money allocated to the CRA must stay within its boundaries. The area runs from 5^th Avenue North to 30^th Avenue South and east to west from 4^th Street South to 49^th Street South.

“That cut for the SHIP dollars could possibly mean less down payment assistance citywide for those who fall within those income limits,” Slyker said. “Yet increase the amount of work we’re doing in the CRA.”

Under the proposed changes, housing officials would still forgive deferred payments for those earning under 120% of the AMI – $73,080 – after 10 years. Homebuyers earning up to 140% would receive a five-year deferral and then repay just half of the loan.

Slyker said the 50% repayment would return to CRA coffers, increasing funding for South St. Pete projects. “These deferred payments may not necessarily go through the citywide program, though,” she added. “With the cut in SHIP dollars, we will need program funding flowing in … we’re just not there – yet.”

The potential impediment to expansion did not negate Councilmember Copley Gerdes’ excitement for an “amazing” initiative. He noted that most residents qualify under the 140% AMI limit.

“I just think programs like this are what make St. Pete awesome,” Gerdes told the Catalyst. “They’re going to give you a $75,000 down payment that you’d have to pay half of the loan back, 0% interest, after five years. It’s free money.”

The full city council must vote on the proposed changes. Amy Foster, housing and neighborhood services administrator, said some potential homebuyers have waited for the enhancements since January.

Gabbard said the council “obviously” supports the program. She also noted that the need for assistance “far outweighs any individual organization’s ability” to help homebuyers.

“Prices are increasing at a rate that is – there’s just no way to keep up,” Gabbard said.