Steamboat Springs Some 30 Routt County residents gathered west of Steamboat Wednesday, beneath a mid-day sun, to celebrate National Homeownership Week by discussing 100 affordable homes that will eventually be built upon what is now a gravel-strewn, undeveloped 30-acre lot.
"There are a lot of residents working hard here, who pay outrageous rent, and therefore can't afford to save money for a down payment on a home," said Sharon Stoddard of the U.S. Department of Agriculture's Rural Development Office in Craig.
Regional Affordable Living Foundation Executive Director Rob Dick believes that the lack of affordable housing is the biggest problem facing the Routt County today.
To help alleviate some of the financial pressures on home buyers in the area, RALF has created a public-private partnership with Steve Cavanagh of TCD Inc. Together, RALF and Cavanagh are planning to building 100 affordable homes in the proposed West End Village development, located off of Downhill Drive.
Half of the homes duplexes and single-family houses included will be strictly owned by the nonprofit RALF, while the remainder will belong to Cavanagh, who will be selling the homes for profit.
All of the homes will be targeted toward lower-income residents, and will be reasonably priced, Dick said.
People who attended the open house saw a preliminary drawing of six houses and several floor plans for the proposed development. Lot sizes will average 50 by 120 feet, while home sizes will vary. Townhomes and multi-family units will range from $80,000 to $135,000; duplexes from $120,000 to $150,000; and single-family homes from $135,000 to $175,000.
RALF has held several meetings with the city planning staff and Planning Commission, Dick said.
"We don't foresee any serious impediments to the project, and will get building as quickly as possible," he added.
Stoddard attended the open house to describe some of the finance options that USDA Rural Development may be able to provide prospective homeowners.
Direct loans and guaranteed loans will be available to the buyers, depending on their gross income, number of people in the home, and credit history. Stoddard said that many people could qualify for the USDA guaranteed loans.
Self-Help Housing, also known as sweat equity, wherein buyers make their down payments by building their own homes, is another option, she said.
Bud Rogers, a private general contractor, is initiating his own sweat-equity project and is hoping he will be able to use some of the land in West End Village, he said.
"USDA financing options will not be the only ones available," Dick said. "RALF is going to bring an array of financing options to the development project."
Eligibility for the financing options will depend on many factors. Brokers, lenders, residents and project coordinators all agreed upon some fundamental recommendations for interested parties:
If you're thinking about buying a home in the near future, don't buy a car right now. If you have poor credit or credit-card debt, start fixing it this afternoon. Get pre-qualified for financing as far ahead of time as possible. If you don't qualify, lenders can tell you what you need to do to qualify.
Patricia Campangna, a Steamboat resident and single mother of three, attended the open house and thinks the project sounds "absolutely wonderful."
While she thinks it has promise, Campangna also said she has concerns about the development.
Like several other people who attended the open house, she worried about reselling the homes in the future, and whether West End Village will be another way for the rich to get richer.
"I don't want this to turn into another high-priced rental area," she said.
When people sell their homes, they often need a down payment for their next purchase, she said. Because home costs tend to increase, owners would probably need to sell their RALF homes for more than they paid and, eventually, the homes would become unreasonably priced.
RALF is trying to cover that base through a special plan it is proposing, which would not apply to homes sold by Cavanagh.
By offering a silent second mortgage, with no associated payments for the buyer, RALF would be able to create and capture community equity.
For example, if a house costs RALF $100,000 to build, the appraised value would probably be around $150,000, Dick explained. Home-buyers who qualify for a $100,000 loan would get a $50,000 silent second mortgage from RALF, meaning that the foundation would, in essence, have created $50,000 of equity. If that house was sold for an appreciated value of $180,000, RALF would get back the $50,000, as well as one-third of the appreciated amount. RALF could then use the equity for West End Village homes or for other projects.
"Eventually, we hope, it will be interspersed throughout town, so that there will be RALF housing throughout the valley. It is not RALF's long-term desire to be in the development business," Dick said.
Campangna believes the plan would be a good one, as long as RALF is strict about it.
Residents were also concerned that anybody, particularly second-home owners, would be able to take advantage of the affordable housing.
"The half that will be sold through RALF will not be sold to anyone whose gross income is over 120 percent of the median income," Dick said.
Although RALF will be working in conjunction with Cavanagh on the for-profit side of the project, to ensure that all the housing goes to residents in need, Dick said that Cavanagh will probably sell his homes as quickly as possible.
Routt County residents interested in finding out more should submit their names and current addresses to Rob Dick at 870-0167, and take the first important step in the process by consulting with a local lender typically free of charge to find out more about personal financing options. Those interested in USDA loans should contact Sharon Stoddard at 824-3476.
To reach Bonnie Nadzam call 871-4205 or e-mail email@example.com