Some 300 flood victims in replacement homes will get to keep up to $25,000 in earlier down payment assistance after all

One upset group of flood victims has been a group of about 300 households who received state Jumpstart down payment assistance on a new home only to learn that the money will be deducted from what they receive once their flood-ruined home is bought out by the city.

The rules changed on Thursday afternoon with an announcement in Cedar Rapids by Gov. Chet Culver.

The rule change will protect up to $25,000 in down payment assistance from being subtracted from a buyout payment. The rule change applies to those who already have gotten the down payment assistance and to those who are planning to take advantage of the Jumpstart assistance and it is intended to take into account the fact that most replacement houses cost more than the flooded homes that people lost to the flood.

A total of 380 households in Cedar Rapids have signed up for down payment assistance, but some of that group have been waiting to receive a buyout settlement to get enough money to buy another home, explained Jennifer Pratt, the city of Cedar Rapids' development coordinator. Those people now also will qualify for up to $25,000 in down payment assistance over and above what they get from their buyout, she noted.

At an afternoon news conference in the flood-damaged Town Centre building downtown, Culver said knowing that down payment assistance was to be subtracted from buyout payments was “unacceptable to me.” He credited the state Rebuild Iowa Office with working with the U.S. Department of Housing and Urban Development to get the rule changed, and he also credited Cedar Rapids City Council member Jerry McGrane with lobbying state officials about the change.

Jon Galvin, a flood victim and an advocate for flood victims as a member of Northwest Neighbors, attended Culver's news conference to hear first hand of the rule change that will benefit him and others.

Galvin, 70, said the $25,000 he will realize from the Culver announcement will mean he will have only a $50,000 outstanding mortgage on the house he and his wife live in now. He had owned his previous house outright before it was ruined by the flood.

The city's Pratt suggested that people call 286-5521 with questions about the rule change. She said the city's monthly newsletter to flood victims also will answer additional questions. The city's buyout process already has begun for some homeowners, and those one-to-one meetings will be good times to discuss the Jumpstart down payment assistance for those who have not yet gotten it, Pratt said.

The city anticipates buying out up to 1,300 flood-damaged properties with federal funds now in place in Iowa.