HomesFund, a nonprofit organization that specializes in affordable housing programs, recently was awarded nearly $2 million to continue providing mortgage assistance loans, paving the way for low- to moderate-income households to become homeowners in Southwest Colorado.
HomesFund has served Montezuma County since 2016, and other counties in the Four Corners region since 2008, while the area, along with the rest of the state, has experienced a dramatic increase in the gap between low workforce wages and high home prices. Higher interest rates also have decreased affordability.
Statistics that the Four Corners Board of Realtors sent The Journal in an email show that Montezuma County median sale prices increased by close to 57% since 2018.
HomesFund’s executive director, Lisa Bloomquist Palmer, said that income limits vary by different programs they offer, but essentially a family of four that earns $104,400 qualifies for assistance in Montezuma County. This would be the maximum they can earn and still participate in the program.
If the household earns less, they can get more assistance only if they can sustainably afford the payments. Applicants have been turned down in the past because some houses were unaffordable to them.
“We’re not going to help people get into an unsustainable financial position,” Bloomquist Palmer said.
Interested? Now what?
For those interested, potential homebuyers need to attend the homebuyer education class listed on HomesFund’s website. The class is free of charge, but there is a $15 workbook fee. Classes are held in Durango, Cortez and Pagosa Springs.
After that, applicants submit an application that includes financial information so that HomesFund can take a deep dive into their financial situation.
The next step includes counseling sessions for homebuyers. If they pass and HomesFund successfully reviews the eligibility for each buyer, they can work together to provide mortgage assistance.
For the mortgage assistance program, HomesFund offers up to 10% of the purchase price and the homebuyers provide the equivalent. Therefore, the first mortgage is 80% of the purchase price.
The income maximum is 120% of the area median income by household size. This means for Montezuma County, the maximum household income has to be $104,400.
The down payment assistance program allows people to receive up to 30% of the purchase price, with a $104,700 limit. For this situation, the annual household maximum would be $87,000.
For each loan, the buyer has two options on how to borrow money. The most popular is a shared appreciation loan with a 0% interest rate. When they sell or get a cash-out refinance, or if they are not living on the property, the homeowners have to pay off the principal and a proportional share of the appreciation.
The other option includes an amortizing loan that stretches over 30 years with a calculated interest at 2.5% less than the first mortgage interest rate.
Bloomquist Palmer said that La Plata County is most in need of assistance since it’s especially expensive in Colorado’s Four Corners area. Still, the grant money is pooled and one county is not favored over another.
As of 2022, HomesFund has assisted 56 households since 2016 in Montezuma County and a total of 361 households in the Four Corners counties they cover dating to 2008.
