Cleveland proposes forgiving up to $10,000 debt for eligible homeowners
Cleveland’s Department of Community Development is proposing legislation to forgive up to $10,000 on some Afford-A-Home loans issued years ago.
Between 2005 and 2011, the city distributed the loans of between $5,000 and $20,000 to help 351 Clevelanders purchase fully rehabilitated homes. The majority of those were $10,000 or less.
Now the city wants to wipe out the debt of all the borrowers who are up to date on their taxes and are still living in the property.
"We want to remove the debt obligation for borrowers who are in good standing so that they can move on with their lives," said Alyssa Hernandez, the director of the Department of Community Development. "We want this to foster generational wealth for low to moderate-income households."
The total debt forgiven could be up to $910,000, though the city said it depends on the number of eligible loans identified. AAH is an active program through 2041, originally funded by Community Development Block Grants and HOME Investment Partnerships Programs from the U.S. Department of Housing, though no new loans have been issued since 2011.
The legislation will go through city council hearings. Once approved, Hernandez said the city will contact eligible residents.