City presents proposed down payment assistance pilot offering up to $10,000 per household

Michael McInnis of the City of Prescott’s Community Development Department outlined a proposed down payment assistance pilot that would use CDBG dollars to help income‑eligible homebuyers with down payments and closing costs.

Under the proposal, eligible households earning at or below 80% of area median income (AMI) could receive up to $10,000 through 0% interest, deferred-payment loans secured by a junior deed of trust. McInnis said repayment would be deferred until sale, transfer or refinance of the home; the city would recover either the original loan amount or a proportional share of appreciation so that repayments could seed a revolving fund for future assistance.

McInnis said the assistance would generally cover up to 50% of the down payment; if a household needs less than $10,000 for the down payment, the remaining funds could be applied to closing costs so the full award is used. The City expects an initial allocation of $50,000 for a pilot intended to serve about 3–5 homes in the first 12–18 months.

He said the program would be modeled on successful examples elsewhere and that Madison, Wisconsin, was an influential early adopter, noting it has run its program "since the late 1980s" and generates program income annually. McInnis described an anticipated start in the fall if funded, and emphasized partnerships with lenders, real estate professionals and nonprofits would be necessary for outreach and operations.

Committee members asked about program administration, timing, eligible housing types (including single-family, condominiums, townhomes and manufactured housing), and how program income would be handled; McInnis said the city would manage the loans and partner with lenders and service providers to operationalize the pilot.

The committee took no final funding action at the meeting; applicants and staff will refine program details ahead of any funding decision.