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To amend City Code § 2-1526, concerning the employee first-time homebuyer’s assistance program, for the purpose of expanding eligibility to certain owners of deed-restricted or limited-equity homes purchasing their first unrestricted market-rate residence and renaming the program the employee homebuyer’s assistance program.
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THE CITY OF RICHMOND HEREBY ORDAINS:
§ 1. That section 2-1526 of the Code of the City of Richmond (2026) be and is hereby amended and reordained as follows:
Sec. 2-1526. Employee [First-Time] Homebuyer's Assistance program.
Subject to the appropriation of funds by the City Council, the Chief Administrative Officer may establish a program to provide financial incentives in the form of down payment assistance and closing costs assistance to City employees and employees of the School Board of the City of Richmond who are [first-time]:
(1) First-time homebuyers [to purchase] purchasing their primary residence within the corporate City limits[. Neither individual grants nor lifetime cumulative grants shall exceed the maximum amounts per employee specified in Code of Virginia, § 15.2-958.2.]; or
(2) Limited-equity homeowners purchasing their first unrestricted market-rate residence as their primary residence within the corporate City limits.
For purposes of this section, “limited-equity homeowner” means a person who currently holds or previously held an ownership interest in a residential property subject to a legally enforceable restriction that limits the resale price, appreciation, or amount of equity that may be realized by the owner, including a community land trust ground lease, affordability deed restriction, restrictive covenant, or other substantially similar instrument, and who has not previously held an ownership interest in an unrestricted market-rate residence.
For purposes of this section, “unrestricted market-rate residence” means a residential property that is not subject to a legally enforceable restriction limiting the resale price, appreciation, or amount of equity that may be realized by the owner.
The program shall be administered in accordance with the Code of Virginia, § 15.2-958.2. The Chief Administrative Officer is hereby authorized to promulgate such regulations, in conformance with applicable law, as necessary to ensure the integrity of the employee [first-time] homebuyer's assistance program.
§ 2. This ordinance shall be in force and effect upon adoption.
DATE: August 21, 2026
TO: The Honorable Members of City Council
THROUGH: The Honorable Ellen Robertson, Councilmember 6th District
THROUGH: RJ Warren, Council Chief of Staff
THROUGH: Will Perkins, Senior Legislative Services Manager
FROM: Whitney Brown, Policy Analyst
RE: To amend City Code § 2-1526, concerning the employee first-time homebuyer’s assistance program, for the purpose of expanding eligibility to certain owners of deed-restricted or limited-equity homes purchasing their first unrestricted market-rate residence and renaming the program the employee homebuyer’s assistance program.
CNL-2026-0095
PURPOSE: To amend City Code § 2-1526, concerning the employee first-time homebuyer’s assistance program, for the purpose of expanding eligibility to certain owners of deed-restricted or limited-equity homes purchasing their first unrestricted market-rate residence and renaming the program the employee homebuyer’s assistance program.
BACKGROUND: Community land trusts (CLTs) and other deed-restricted or limited-equity homeownership models are tools for expanding access to affordable homeownership while preserving affordability for future income-qualified households. Under these models, households are able to purchase homes at affordable prices in exchange for legally enforceable restrictions on resale prices, appreciation, or the amount of equity that may be realized when the property is sold. Homeowners therefore accept limitations on their potential financial return in order to preserve the affordability of the home and the public and private investment that helped make the initial homeownership opportunity possible for future households.
The City has previously recognized the role of community land trusts in advancing its affordable housing objectives. In Resolution No. 2016-R051, adopted July 25, 2016, City Council expressed its sense that the Maggie Walker Community Land Trust's pursuit of activities that provide and preserve opportunities for persons of low- and moderate-income to secure decent and affordable housing lessens the burdens of City government. Since that time, community land trusts and other permanently affordable homeownership models have continued to serve as tools for expanding access to homeownership and preserving affordable housing opportunities within the City.
While limited-equity homeownership provides an important pathway into homeownership, the restrictions necessary to preserve permanent affordability may also create an unintended barrier when homeowners are ready to move into the unrestricted housing market. Unlike owners of unrestricted market-rate properties, CLT and other limited-equity homeowners do not realize the full market appreciation of their homes and may therefore accumulate less equity for the down payment and closing costs associated with purchasing a subsequent home. At the same time, traditional first-time homebuyer eligibility requirements may exclude these households from down payment assistance solely because they have previously owned a home. This combination can create a gap in the homeownership continuum: households may successfully achieve affordable homeownership but have limited access to assistance when attempting to transition to their first unrestricted market-rate residence.
The City's Employee First-Time Homebuyer's Assistance Program currently provides down payment and closing cost assistance to eligible City and Richmond Public Schools employees who are first-time homebuyers. The City's administrative guidelines use a traditional first-time homebuyer standard that generally excludes households that have owned a home during the preceding three years. However, Va. Code § 15.2-958.2 authorizes the City to provide homeownership grants to eligible City employees and employees of the School Board of the City of Richmond purchasing their primary residence within the locality and permits the City to establish terms and conditions for administration of the program. The statute does not limit eligibility to first-time homebuyers or prescribe a definition of "first-time homebuyer." The City's current first-time homebuyer standard therefore represents a local program eligibility requirement rather than a restriction imposed by the enabling state statute. As currently applied, that standard does not distinguish between an employee who previously owned an unrestricted market-rate property and an employee whose ownership interest was subject to legally enforceable affordability and equity restrictions.
This issue has direct relevance within the City of Richmond. The Maggie Walker Community Land Trust (MWCLT) currently serves more than 80 homeowners within the City, approximately five of whom are employed by the City of Richmond or Richmond Public Schools. MWCLT also reports that three additional Richmond Public Schools teachers are currently in its applicant pool. As permanently affordable and deed-restricted homeownership opportunities continue to expand, the number of City and RPS employees who may encounter this eligibility gap could increase. Addressing the issue now provides an opportunity for the City to establish a policy framework that recognizes the distinct circumstances of limited-equity homeowners before the barrier affects a larger population.
The proposed ordinance addresses this gap by establishing limited-equity homeowners purchasing their first unrestricted market-rate residence as a separate eligible category under the City's employee homeownership assistance program. It does not eliminate or redefine the existing first-time homebuyer category. Instead, it recognizes that prior ownership of a deed-restricted or limited-equity residence differs from prior ownership of an unrestricted market-rate residence because the homeowner's ability to realize appreciation and equity was legally restricted.
The proposed change is also consistent with broader City goals related to homeownership and economic mobility. The City's Mayoral Action Plan identifies creating pathways for residents to move from poverty to stability to wealth building, increasing homeownership, and identifying and removing barriers to opportunity as City priorities. Supporting the ability of limited-equity homeowners to transition to unrestricted homeownership recognizes that affordable homeownership can be one stage within a broader continuum of housing stability, homeownership, economic mobility, and wealth building.
Supporting homeowner mobility can also preserve the benefits of permanently affordable housing for future households. When a CLT or other limited-equity homeowner sells and transitions into the unrestricted market, the affordability restrictions remain with the deed-restricted property, allowing the home to become available to another income-qualified household. Assistance with the transition can therefore support one household's advancement along the homeownership continuum while preserving an affordable homeownership opportunity for another household.
The Employee Homeownership Assistance Program has also experienced challenges with utilization, while the federal funding supporting the current program is subject to a December 2026 expenditure deadline. Although the population directly affected by this particular eligibility change is expected to be relatively small, the program's utilization experience provides an additional reason to examine whether existing requirements create unnecessary barriers for otherwise qualified employees. The proposed ordinance addresses one identified eligibility barrier while establishing a framework that can continue to apply to the Employee Homeownership Assistance Program subject to future appropriations.
As CLTs and other shared-equity and deed-restricted homeownership models continue to be used as affordable housing strategies, local governments will increasingly need to consider both how households enter affordable homeownership and how they successfully transition from it. Richmond has an opportunity to recognize this emerging policy issue by supporting a homeownership continuum in which permanently affordable homeownership can serve as a stepping stone, rather than a ceiling, toward greater economic mobility and wealth building.
COMMUNITY ENGAGEMENT: N/A
STRATEGIC INITATIVES AND OTHER GOVERNMENTAL: N/A
FISCAL IMPACT: Adopting this ordinance should not incur additional fiscal impacts beyond the current budget. The program remains subject to appropriations, meaning awards cannot exceed the amount budgeted.
DESIRED EFFECTIVE DATE: Upon adoption
REQUESTED INTRODUCTION DATE: October 13, 2026
CITY COUNCIL PUBLIC HEARING DATE: November 9, 2026
REQUESTED AGENDA: Consent
RECOMMENDED COUNCIL COMMITTEE: Finance and Economic Development Subcommittee
AFFECTED AGENCIES: City Council
RELATIONSHIP TO EXISTING ORD. OR RES.: None
ATTACHMENTS: “Re: Promoting Homeowner Mobility Through Inclusive Homeownership Assistance Policies”; ARPA Status Report_Accomplishments_August 2026; ARPA Obligation and Expenditure Dashboard
STAFF: Whitney Brown, Policy Analyst, (804-646-3765)