EL PASO, TEXAS (KFOX14/CBS4) — El Paso leaders are weighing a major shift in how the city uses federal housing dollars, as rising home prices have made it harder for residents to qualify for first-time homebuyer assistance.

City officials are set to discuss a proposal tomorrow that would move $2.5 million from the city’s first-time homebuyer program to help pay for the development of multi-family units.

The $2.5 million comes from unused funds from the program.

Paulina Carr reports on El Paso weighs shifting $2.5M from first-time buyer aid to affordable housing (Credit: KFOX14)

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The first-time homebuyer program provides up to $45,000 in assistance for first-time homebuyers, plus an additional $5,000 that can be used toward a down payment or closing costs.

The city said several factors have limited its ability to use the funds for first-time homebuyer assistance, and the last time the program was used was in 2021.

One factor is that home prices have increased, causing people to no longer qualify for the assistance.

To qualify, household income could not exceed 80% of the area median income, and the property would have to be priced below $226,000.

According to the El Paso Association of Realtors, the average price for a property is now $280,000. In 2021, the median price for a home was $182,000, making homes ineligible for the program in 2026.

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El Paso officials said they want to redirect the unused funds into the construction of 35,731 affordable multi-family units the city is in need of. The money also would be used for rehabilitation of existing units, acquisitions, and projects that will create affordable rental units.

After tomorrow’s proposal, public comment will be taken into account before the amendment is submitted to the U.S. Department of Housing and Urban Development in October. A notice of funding availability is expected to be announced by the end of the year.

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