jonathan.ericson@wcfcourier.com

CEDAR FALLS - The city will try to gain some moderately-priced new home construction with state aid available to communities affected by the 2008 flood.

A council committee agreed Monday to start working with former Waterloo Mayor John Rooff to develop new homes with a maximum cost of $180,000 in existing Cedar Falls subdivisions.

Through an Iowa Department of Economic Development program, homebuyers could get a subsidy of up to 30 percent toward a down payment. The subsidy would only be allowed for households whose incomes are at a or below the median for the area. A family of three would need an income of $53,900 or less.

The grant would be in the form of a forgivable loan. If the homebuyer stays in the house for three years, the loan would be taken off the books.

The city has submitted a preliminary application to the Iowa Department of Economic Development for the subsidized housing project. A final application will soon be completed.

All homes built through the program would have to be stand-alone single family houses.

The city handles contracts with the developer and works with the subsidy. The developer is responsible for buying the land and constructing the home.

"We're kind of a conduit. We're a middle person," said Ron Gaines, city director of developmental services.

Rooff said he's already working on two homes through the same program in Waterloo. He plans to do seven in Waterloo altogether.

"We would be open to working with other developers, but others haven't come forward at this time," Gaines said.

Three developments have agreed to make lots available for the development. Those include Green Creek off of Greenhill Road; Huntington Ridge off of Cedar Heights Drive; and University Meadows off of Hudson Road.