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Some Racine homeowners, property investors, and people looking to buy a home may be able to take advantage of a forgivable loan program.
The City of Racine Common Council has approved three new programs in the Tax Incremental District (TID) No. 22 for current and new homeowners. The programs help remediate building and health code violations, promote property investment, and increase homeownership in TID 22. The measure passed on January 19, 2021, without debate on the consent agenda.
These programs provide City residents access to additional funds necessary to purchase and improve new homes and currently owned homes. Further, the TID is bounded on the south by Goold Street, Melvin Avenue on the north, Northwestern Avenue and Rapids Court to the west, and Michigan Boulevard to the east. See the image below.
The City wants to “allocate the $320,000 in tax increment revenue generated by TID 22 for the purposes of neighborhood stabilization,” according to the Common Council documents.
“As a City, we want our residents to have safe homes that are compliant with both building and environmental health codes and want to support those looking to purchase a home for the first time. We also realize that fixing code violations can get expensive and that not everyone has the cash to address issues quickly. Likewise, closing costs and down payments can be a barrier to those who are looking to purchase a home, especially in a tough economic climate. The neighborhood TIDs are designed to help us get at these issues directly. They support residents needing to make repairs, promote projects that add value to homes, and provide incentives for homeownership for our residents,” said Mayor Cory Mason.
What is a TIF District
A TIF district is a development tool municipalities can use to attract business. It works because the taxing jurisdictions create a financing district and establish a district’s base value. The property’s increased value is still charged at the base rate. Then the district uses the increased tax revenue to pay for the infrastructure projects.
The following programs will allocate the tax increment revenue to stimulate the economic and communal vitality of a more prosperous Racine area.
- The Homeowner Repair Program assists property owners with building or health code violations. The program allows up to $10,000 per household to repair code violations.
- The Property Enhancement Program provides matching funds to homeowners with projects that will increase the property value. The program will provide up to $10,000 with a 1:1 match of private dollars per property.
- The New Homeowner Assistance Program aims to remove barriers to homeownership through closing cost and down payment assistance. Approved homebuyers will receive up to $10,000 for the purposes as mentioned above.
Further, most TID 22 funding will go to the New Homeowner Assistance program. The program’s primary goal is to increase homeownership, generate wealth for populations that may have previously been unable to obtain homeownership, and stabilize neighborhoods with long-term residents.
All TID 22 programs will be in the structure of a forgivable loan. The loan will be forgiven at a rate of 20% per year until it is completely forgiven at the end of the fifth year. Moreover, the New Homeowner Assistance Program can be combined with either the Homeowner Repair Program or the Property Enhancement Program, but not both.
For more information, visit the Racine Housing Loans website or call (262) 636-9197.