Homeowner Assistance

Are you considering buying a home? The Town of Davidson and its non-profit housing partners, the Davidson Housing Coalition (DHC), and Our Town Habitat for Humanity, have many programs to assist potential homebuyers through every step of the process.

All persons interested in purchasing an affordable home are required to take a homebuyer class, even if not a first time homebuyer.

First-Time Homebuyer Classes

DHC offers a one-on-one First-Time Homebuyer Class. The class is $60. Please contact Gail Brooks- Lemkin, Housing Counselor, at 704-892-4486 or by email to set up an appointment. Our Towns Habitat for Humanity also offers a First-time Home Buyer Class. The class is $25. Please contact Lareka Knox at 704-896-8957 or by email at lareka@ourtownshabitat.org to set up an appointment.

Individual Pre-Purchase Counseling

If you have questions about the homebuying process, homeownership, mortgages, or buying a home through a town program, DHC staff can provide one-on-one counseling. Please contact Gail Brooks- Lemkin, Housing Counselor, at 704-892-4486 or by email to set up an appointment.

Affordable Homeownership Units

The town offers affordable homeownership units which are available to homebuyers with incomes up to 120% of area median income who would like to purchase a home in the town.

For information about purchasing a unit through the town's affordable housing programs, please contact Eugene Bradley, Housing and Equity Director, at 704-940-9653 or by email.

Affordable Mortgage Products

DHC staff work with homebuyers to help you understand and assess available mortgage products. There are several products which are specifically designed for first-time buyers and make homeownership more affordable. The affordable homes are similar to market-rate homes in that they are individually-owned and require the buyer to qualify for a loan from a lender.

Down Payment Assistance

For households that earn less than 80% of the area median income

I. Program Description
The Town of Davidson provides down payment assistance to income-qualified buyers who meet program guidelines. Lenders apply for the program on behalf of qualified buyers. The home must be in the Town of Davidson. The assistance is in the form of a no payment, no interest loan that is forgiven in increments during the occupancy/ownership of the home. Persons who wish to receive assistance must attend a homebuyer education class (provided by DHC and other non-profit housing agencies) and the combined gross income of all household members must be below the following HUD area median income limits:
Size of Household
Median Income Limit
 (80% AMI)
Median Income Limit 
(120% AMI)
1-person household
$46,800 $70,200
2-person household
$53,450 $80,160
3-person household
$60,150 $90,240
4-person household
$66,800 $100,200
5-person household
$72,150 $108,240
Projected cash assets, at the time of application, cannot exceed 20% of the purchase price of the property.

II. Program Eligibility
All parties on the loan must attend a homebuyer education class that is approved by the Town of Davidson. A certificate is issued upon training completion which is valid for one year only. Completion of the homebuyer education training does not guarantee approval of down payment assistance funds.

The applicant’s projected cash assets, at the time of application, cannot exceed 20% of the purchase price of the property. Cash assets include, but are not limited to: checking and savings accounts, certificates of deposits, earnest money deposit, gift funds, residential property assets, and cash on hand of all adult members. Individual Retirement Accounts or other similar retirement investments, attributed to the household that are less than $100,000 and to which access is limited or restricted, will not be considered cash assets.

III. Eligible Property
  • The property must be located in the Town of Davidson.
  • Eligible properties are existing or newly constructed, one unit, single family residences, including condominiums and modular homes on a permanent foundation.
  • The property must conform and comply with all current zoning and planning ordinances.
IV. Use of Funds
The funds can only be used to assist with the Buyer’s down payment or closing costs. Costs that are normally associated with the seller are ineligible. If the Buyer has prepaid certain closing costs items such as the appraisal fee, credit report fee, or first year hazard insurance premium, the HUD Settlement Statement can show the Buyer receiving cash reimbursement for such prepaid items, as long as it does not exceed the amount prepaid.

V. Level of Assistance
The assistance is up to $10,000 (for buyers earning less than 80% AMI) which includes a $50 lender processing fee that is paid by the Buyer. Closing costs include the lender processing fee and document recording fees that are associated with the assistance. The assistance is limited to $7,000 for buyers earning 80% to 120% AMI. The assistance from the Town of Davidson is in the form of a 5 year no interest declining loan and requires a written loan recapture agreement with the Buyer.

VI. Recapture
Recapture is a mechanism for the Town of Davidson to recover all or a portion of the direct assistance if the Buyer voluntarily or involuntarily (through a foreclosure) sells the house during the affordability period. A note and deed of trust will be taken in favor of the Town of Davidson for the amount of the assistance. The amount of the loan will be forgiven on a declining, sliding scale basis for the time the Buyer occupies the residence. For example, on a loan of $10,000, 20% will be forgiven the 1st year reducing the loan to $8,000, 20% will be forgiven the 2nd year reducing the loan to $6,000 and so on. If, at the end of 5 years, the home is owned and occupied by the Buyer, the loan will be completely forgiven.

VII. Subordination Policy
The Town of Davidson will consider subordinating its homebuyer assistance mortgage to a position lower than a second in the following circumstances:
  • If the homeowner is refinancing the original mortgage in order to obtain a lower interest rate and/or overall mortgage cost. To be eligible for subordination, a refinancing cannot result in any cash out to the homeowner.
  • If the homeowner is borrowing money to make additional improvements to the property. Documentation must be provided to identify the type and cost of the improvements to be made.
  • If the homeowner is securing a loan that includes funds for home improvements and for reasons other than home improvements (ex. debt consolidation, medical expenses, vehicle purchase, etc), the Town of Davidson will only consider subordination if a valuation of the property shows that the equity in the home is sufficient to cover the value of all mortgages against the property, and if the homeowner has been in the home for at least three years.
  • The Town of Davidson will not subordinate if the loan only covers non-home improvement related items.
VIII. Reservation of Funds
Loans will be offered through participating lenders and will be available on a first-come, first-serve basis. To request that funds be set aside for a particular applicant, a lender must submit a Request for Reservation of Funds. A Reservation Request must include:
  • The Reservation Request
  • A copy of the Certificate of Completion from the Homebuyer Education Program
  • A copy of the loan application
This process will only reserve Home Buyer Assistance funds; it does not mean that the applicant has been approved to receive funds.

IX. Documents
The Note, Deed of Trust and Deed Restrictions will be prepared by the Town of Davidson and electronically sent to the closing attorney. The Town of Davidson will rely on the Lender for notification of the date of closing. The Lender should allow 10 working days for the Note, Deed of Trust, Deed Restrictions, and funds to be prepared.

The Home Buyer Assistance loan should be recorded so as to assure it is inferior only to the lender’s first mortgage. The recording fees for this mortgage can be paid from the Home Buyer Assistance funds.

Loan reservations and applications should be submitted to:
Eugene Bradley, Housing and Equity Director
Town of Davidson
216 South Main Street
P.O. Box 579
Davidson NC 28036

Documents and Forms