City of Cedar Rapids

Obtaining Financing
The City's forgivable mortgage will be up to 25% of the purchase price of the unit. Buyers participating in ROOTs are required to secure a mortgage for the remaining portion of the purchase price.

Multiple lenders in the area have participated in previous rounds of the Single Family New Construction Program. As such, there is not a list of approved or recommended lenders. Buyers are encouraged to visit multiple lenders to find the right mortgage product for their specific situation.

A signed loan preapproval letter must be submitted with your application in order to process your application.

Mortgage Requirements

• All mortgage products must meet the following requirements:
• Loans must be in the form of a minimum 15-year, fully amortized, fixed rate mortgage. Early payoff provisions must be allowed.
• No adjustable rate mortgages or balloon payments will be allowed.
• Loan interest rates shall not exceed four percentage points above the federal prime rate at the time of loan commitment.
• Loan to value (LTV) ratios shall be less than or equal to 75%.
• The forgivable mortgage for the ROOTs program shall be senior to all debt other than the principle mortgage on the property.
• Subordination of the forgivable mortgage (such as for refinancing) will be allowed during the five year retention period if no equity is removed from the property.
• Buyers must qualify for and obtain their own mortgage financing (co-signers are not allowed). 

Closing Guidelines for Lenders
Please notify staff of an upcoming ROOTS closing at least one week in advance.
The following documentation is needed before staff can submit a check request for the down payment assistance:

• Good Faith Estimate
• Appraisal
• Title Opinion
• Draft HUD-1
• Homeowner's Insurance with flood declaration page

Additional Information
HUD Guide to Buying a Home

Contact Us

Ali Suntken
(319) 286-5893
a.suntken@cedar-rapids.org