County may help new home buyers with down payment

Linkage fee funds may be used in new program

If you’ve always wanted a home in Gunnison County but could never quite come up with the down payment, help may be on the way. Due to an affordable housing fund that’s been accruing from the county-implemented new construction linkage fee, the Gunnison County Housing Authority and the Board of County Commissioners are poised to offer a down payment assistance program to qualified potential first-time home purchasers.

At the February 6 county commissioners work session, Housing Authority executive director Denise Wise explained that the payment assistance initiative has been developed to provide help for local households at or below 80 percent of the Area Median Income (AMI) who wish to purchase an area home. For Gunnison County, 80 percent of AMI for a family of four works out to $49,750, she said.
Under the terms of the initiative, the county would provide a loan of $6,000 to 25 qualified households to defray the cost of their down payment and closing fees.
Wise said people may have the means to pay a monthly mortgage but don’t have the ability to come up with a down payment, and therefore this type of assistance would be a good use of the linkage fee fund.
“The shortfall is in the down payment,” Wise told commissioners.
Wise said the loan, plus 4 percent interest, would be paid off when the mortgage was paid in full or when the home was sold or refinanced. “We call it a deferred loan,” said Wise.
According to Wise, the money could be provided to just over two dozen families without depleting the linkage fee fund—which accrued $305,223 in 2007. The commissioners established the fee in June of 2006 to assure availability of essential housing for low and moderate income area households.
Wise said a nexus study determined the amount of housing need generated by countywide non-incorporated new construction, and the linkage fee was calculated based on that need. The amount collected is determined by the square footage of the new construction, with the north end of the valley contributing more due to exacerbated need.
To qualify for the down payment assistance, area first-time home buyers would have to meet AMI requirements and pay a $50 application fee. Attendance to a one-day homebuyers training seminar would also be required.
Applicants would be chosen on a first-come, first-served basis, and additional potential home purchasers would be placed on a waiting list if they wished to take advantage of the program.
According to Wise, there are opportunities to purchase Gunnison area housing in the $200,000 range using the proposed $6,000 county-provided down payment, as long as the potential buyer meets the monthly income requirements.
However, she said such opportunities do not exist in the Crested Butte area. “Honestly, in the north end of the valley, there isn’t much,” she said.
Commissioner Jim Starr said that could present a pitfall. “I see this as a potential problem, because we collected 74 percent of the fees up north,” he said.
Starr suggested that the assistance initiative could possibly be worked into affordable housing that may come on line if the town of Crested Butte agrees to the Foothills annexation proposal.
“I support this, but I think we need some of the money going to the towns,” he said.
Commissioner Paula Swenson said the loans could still be made available to north end residents who were considering buying homes costing more than $200,000.
“It’s open to anyone buying a home,” she said.
The commissioners agreed to workout additional details at their regular meeting on March 4.