Second Mortgage Assistance
Operation Fresh Start is able to assist buyers to purchase OFS homes through long-term deferred "second mortgages." The amount available on each home varies, but generally ranges from $21,000 - $23,000. The effect of the second mortgage is to make the home more affordable.

For example, assume that the sale price of an OFS' home is $157,000. The second mortgage available on this home is $21,675. When this amount is subtracted from the sale price, the remaining $135,325 is the total first mortgage you need to obtain from a lender. The second mortgage makes it easier for a buyer to obtain financing, and it reduces the total monthly payments you will pay as the owner.

Second mortgage terms are as follow:

• While you live in the home, you make no principal or interest payments on the second mortgage.
• You must repay the loan when you sell or transfer the home or when it ceases to be your primary residence.
• In Madison, the homeowner repays the greater of either the original loan amount or the value of its "shared appreciation." For example, if the second mortgage equaled 10% of the total original purchase price, the owner will repay 10% of the new market value to the City.
• To simplify shared appreciation, assume that the original value of the home was $150,000, and the second mortgage equaled $15,000, or 10% of the home's value. If the buyer resells the home in the future, and its new market value is $160,000, the owner will repay the City $16,000, or 10% of the new value.
• In other Dane County communities, the buyer repays only the original loan amount with no additional interest or shared appreciation.

Additional Downpayment Assistance can make OFS homes even more affordable. Generally, homebuyers apply to these programs with the help of their first mortgage lender. Programs include the following:

• American Dream Downpayment Initiative (ADDI) - Linette Rhodes 608-261-9240 or www.ci.madison.wi.us/cdbg/addi/
• HOME-Buy Downpayment Program -Terri Goldbin 608-266-4223 ext. 302
• Dane County Housing Authority Downpayment Assistance Program-Kate Nardi Sullivan 608-224-3636 ext. 20 www.dcha.net/homebuyer-assistance-program.php