Fayetteville incentive program aims to make buying a house easier. Here's who qualifies.

An incentive program for first-time homebuyers in Fayetteville aims to support long-term, successful homeownership.

An incentive of up to $30,000 is available for employees of the city of Fayetteville, Cape Fear Valley Medical Center, Cumberland County Schools and Cumberland County government. The program was introduced by the city’s Economic and Community Development Department and is called the Homebuyer Education and Readiness Opportunity Program, or HERO for short. Potential homebuyers can receive up to $30,000 in gap financing through a 0% fixed-interest loan.

“The incomes, qualifications, and structure for this program are set at the most generous terms allowed by Federal and State regulations,” Brian Rick, city spokesperson, said by email last week.

The Homebuying HERO program

The Homebuying HERO Program "seeks to enable long-term, successful homeownership" by providing citywide education and counseling services, according to a city news release. These services are intended to help potential buyers qualify for fixed-rate, responsible mortgage loans, the release said.

Rick said the HERO Program is funded by the HOME Investment Partnership, state allocations, local city dollars and a donation from First Horizon Bank. The HOME Investment Partnerships Program offers formula grants to states and localities for building, buying or rehabilitating affordable housing for rent or homeownership, according to the U.S. Department of Housing and Urban Development.

Rick said that since July 1, 2023, 127 individuals completed the educational workshop, 33 underwent one-on-one counseling and six participants purchased homes.

“Iterations of the program were re-instituted two years ago under different names,” he said. “The Homebuyer’s HERO program is a consolidation of programs to expand opportunities by removing matching requirements.”

Jeffrey Morin, housing program manager with the city's economic community development department, said that previous homebuyer programs required buyers to match funds. This meant the city would match the amount a buyer contributed, up to a specified limit based on the type of HERO under which they were classified.

Three tiers of HERO incentives

The Homebuying HERO program offers three tiers of gap financing to assist first-time homebuyers — citizen HERO, public service HERO and city employee HERO.

• A citizen HERO is considered any current or future resident of Fayetteville who meets the income requirements for their household. Specific income limits can be found on the program's website at fayettevillenc.gov/city-services/economic-community-development/residents . This tier can receive up to $20,000 in financial assistance, Morin said.
• A public service HERO is any employee of Cape Fear Valley Medical Center, Cumberland County Schools or Cumberland County government. This tier can receive up to $30,000 in financial assistance, Morin said.
• A city employee HERO is any employee of the city of Fayetteville. Rick said that approximately 1,800 employees work for the city and would be eligible under the city employee HERO tier. This tier can receive up to $30,000 in financial assistance, Morin said.

Morin said that gap financing helps bridge the difference between the price of a home and the amount a buyer can afford. He said that, for example, if a buyer wants to purchase a $150,000 home but only qualifies for a $125,000 loan, the city will assist by covering the $25,000 gap. This support, which comes in the form of down payment assistance, ensures that the buyer can keep their mortgage payments affordable without affecting the amount they borrow.

What types of homes qualify?

The release said that single-family homes and modular homes are eligible; however, manufactured homes are not. Both citizen HERO and public service HERO participants can receive a 0% fixed-interest loan that is forgivable within a 10-year period. The funds can go toward closing costs and a down payment, the release said.

Morin said that as long as the home remains the buyer's primary residence, they won't have to repay the city. Each year, on the anniversary of the loan, $2,000 of the loan amount will be forgiven, continuing over a 10-year period until the entire loan is forgiven.

Looking ahead

Rick said that it is difficult to determine the ultimate future of these programs as any expansion will be based on the amount of funds provided annually, market trends and participation in the program.

With this program, first-time homebuyers hoping to purchase their first home within Fayetteville city limits now have up to three options in gap financing available toward the purchase of a new home, the release said.

Reporter Lizmary Evans covers growth and development for The Fayetteville Observer. You can reach her at LEvans@gannett.com

This article originally appeared on The Fayetteville Observer: Fayetteville incentive program aims to make buying a house easier. Here's who qualifies.