Barnstable has launched an interest-free loan program designed to help low-income and first-time homebuyers and bring some stability to Hyannis, the town’s village with the most rental units.

The Hyannis Homebuyer Assistance Program offers two loans of up to $75,000 each to would-be first-time homeowners who earn less than 80 percent of the area median income, provided they complete a homebuyer education course and are either a U.S. citizen or have eligible immigration status.

The program defines a first-time homebuyer as someone who has not had principal ownership of a home within the past three years or is a single parent who only owned a home with a now-former spouse.

The maximum purchase price of a qualifying home is $325,000, and the buyer must contribute at least 1.5 percent toward the purchase. The loans are issued as a second mortgage to be repaid to the town when the property is sold.

Town Councillor Jennifer Cullum, who represents most of Hyannis, said the village has much of the town’s economic activity but has generally had the lowest household incomes and a high proportion of recent immigrant families. Housing costs continue to rise, however, and as people sell their homes to downsize or move into retirement communities, the result is absentee landlords or vacant homes.

“I know many people my age with children my age – I’m 47 with a 10-year-old – that have never been able to buy on Cape Cod because it’s so difficult,” Cullum said. “This is an effort to fill our neighborhoods with kids again.”

Cullum approached Barnstable Housing Coordinator Arden Cadrin to develop a plan using the limited resources available to provide incentives for homeownership in the village. Cadrin said the town recently completed a housing production plan that highlighted the issue.

“Hyannis is … the employment and transportation hub of the entire Cape, and the population and housing stock here is different,” she said. “The need in the rest of town is rental housing, but in Hyannis the need is for homeownership. … We learned what we should be incentivizing, and trying to sort of balance that homeownership-rental mix.”

This first round of loans is funded through a Community Development Block Grant, but Cadrin is in the process of applying for additional funding through the town’s Community Preservation Act and hopes to expand the program throughout the town.

Healthy communities, Cullum said, have a mix of older residents and families, burgeoning and blossoming schools, and bustling main streets.

“Cape Cod has defined itself over the years as a place with an extremely aging population,” she said. “We have a huge amount of retirees, but it’s really difficult for young families to stay and get involved because they just can’t make ends meet. … We’re losing a population here that needs a break to be able to afford a down payment on a home.”

Written by Daniel DeMaina, Associate Editor