Kat Kelly spends time with her sons, Thomas, front, and Sean, inside the hotel room at the Nordic Lodge that the family calls home. Kat and Sean have been living in the room since February along with the family’s two large dogs while waiting to hear what will happen with the Habitat for Humanity home in Riverside the family had expected to move into. Thomas also was living in the room but moved out temporarily to live with his baseball coach.

Photo by John F. Russell

Kat Kelly spends time with her sons, Thomas, front, and Sean, inside the hotel room at the Nordic Lodge that the family calls home. Kat and Sean have been living in the room since February along with the family’s two large dogs while waiting to hear what will happen with the Habitat for Humanity home in Riverside the family had expected to move into. Thomas also was living in the room but moved out temporarily to live with his baseball coach.

Routt County Habitat for Humanity contracts hit snags; duplex stands empty



The Habitat home in Riverside the Kelly family had expected to move into sits unoccupied. Problems with financing have kept the family out of the home and living in a hotel room at the Nordic Lodge.


Kat Kelly spends some time with her boys, Thomas, front, and Sean, inside a hotel room at the Nordic Lodge, where they have been living since February.

— Editor's note: This story has been changed to reflect that the final price of the Kelly family's half of the Habitat duplex is $185,000, not $199,000.

The new Routt County Habitat for Humanity duplex in Riverside has been ready for occupancy since mid-February but continues to stand empty to the frustration of the two families who have dreamed of moving into a home of their own there for the past two years.

In that time, they have followed through on their partnership agreement requiring them to contribute 350 hours of sweat equity to the construction of their home.

But as winter turns to spring, communication between the Habitat board and the two families is through their attorneys.

The intended occupants of the two duplex units, Kat Kelly and Renee Gaerlan, told the Steamboat Today this month that they feel misled about the cost of acquiring their new Habitat homes while Habitat officials said they consistently have told their partners what to expect, with the exception of a couple of surprises along the way, including an extra $30,000 to get utilities to the duplex units. But it’s apparent there have been misunderstandings.

Kelly, a single mother of two teenagers, said she originally had expected to pay for her share of a duplex unit with a total cost $120,000 with terms requiring her to pay just $500 down on a 30-year, interest-free mortgage. But that is not the case.

Habitat board President Kathi Meyer told the Steamboat Today this week that Habitat was able to offer those terms on prior projects but that the $500 down, 30-year, interest-free mortgage that Kelly referenced has not been available to Habitat through a program from the Colorado Housing Finance Authority for four years.

“We were OK with the (original) $120,000 price and understood when it went from $120,000 to $150,000,” Kelly said, “but when they told us it would be $199,000 per side, and I would have to borrow $68,000, that blew me away. I’m having a vision of getting a second full-time job and never seeing my kids in order to afford my Habitat home. If I was out shopping for a home, I wouldn’t look at anything over $125,000 to $150,000 per side.”

Ultimately, the Habitat board reduced the final price for Kelly's half of the duplex to $185,000.

Meyer said this week that Habitat partners never know the final purchase price until the home is completed.

“They are told specifically, 'You can’t be told the purchase price until it’s built,'” Meyer said. “It’s not like a custom home where you contract for it. It’s written in the policies that Habitat doesn’t quote the price” in advance.

Kelly and Gaerlan are employees of the city of Steamboat Springs. Kelly is an administrative assistant in the Steamboat Springs Planning Department, and Gaerlan is a fire technician in the fire marshal’s office.

Kelly said the greatest source of her frustration is that from the day she was approached by former Habitat Director Jody Patten to inquire if she would be interested in becoming a Habitat partner, and at numerous steps in the process, she has informed officials in the organization that she has an outstanding judgment against her credit relating to a loan she did not pay off in Texas. She also said she told them she previously had been turned down for a U.S. Department of Agriculture loan.

“In my application to the family selection committee, I put a letter in there explaining the judgment to make sure we wouldn’t go through this entire process, sit down to close and then they tell me we can’t close,” Kelly said. “I didn’t want to go through this, build up my family’s hopes, and we end up where we are right now. This was in my application.”

She said Habitat officials repeatedly told her the outstanding judgment would not be a problem.

Meyer said there is no dispute that Habitat was made aware of the judgment against Kelly’s credit. However, she said Kelly was prequalified for a USDA loan only to have it withdrawn in October because of changes in federal lending practices.

It also is the case, Meyer said, that Habitat officials did not fully understand the implications of financial judgment for the organization’s ability to close on the sale of the duplex unit to Kelly. The problem, Habitat learned when a title company employee joined the board, is that the old judgment could be turned into a lien against the new duplex, meaning the transaction cannot be closed until the judgment is cleared. And that’s Kelly’s responsibility.

The cost of a Habitat home

Habitat partners do not pay retail value for their new homes, Meyer said this week.

“We can’t charge any more than 30 percent of gross household income. The monthly payment was within 30 percent or less under the formula,” she said. “We are both seller and lender in this case. We’re going to take over $100,000 (in debt) in a second trust deed.”

The Steamboat Today reported in March 2012 that Habitat had obtained a $90,000 grant from Thrivent Financial from Lutherans of Minneapolis and a $15,000 commitment from Steamboat’s Concordia Lutheran Church. Patten said at the time that Habitat still needed to raise about $120,000 to cover the rest of the cost of the two-unit duplex.

Meyer said she could not reveal all of the details of Habitat’s contract with Kelly because of confidentiality laws.

“We entered into a standard Colorado real estate contract in January, and it’s been extended twice,” Meyer said.

Habitat's board made some adjustments and arrived at the final price of $185,000 for one 1,200-square-foot, three-bedroom half of the duplex on Honeysuckle Lane last fall, Meyer said. That number included a little wiggle room for contingency costs going into the final phase of construction. Meyer added that the cost to buyers of Habitat’s duplex in West End Village about seven years ago was $130,000 per side.

But Kelly was uncomfortable with the final cost of the home.

“Kat was insistent we get an appraisal because she felt the house wasn’t worth it, so we obtained a third-party appraisal, and it was $215,000 even with the deed restrictions,” Meyer said.

Kelly said she doesn’t think her friends in the community, including an electrician who volunteered to wire the house, would have donated their labor if they had understood Habitat was going to bill her at retail rates for a portion of their work.

Meyer said it was Habitat, not Kelly, who recruited the volunteers. She added that it’s within Habitat's organizational guidelines to assign a portion of the value of skilled volunteer labor to the cost of the house to generate a sum that can be rolled into the next project.

Meyer said Gaerlan declined to sign her purchase contract for her half of the duplex in December, but Habitat remains hopeful that Kelly still can close on her half of the home.

Meyer said the board actively is working with four to six financial institutions, including banks with national affiliations, to find loans for low-income borrowers.

“I think we’re very hopeful everything can workout with the Kelly family,” she said. “Understanding that (mortgage) underwriting is really tough today, we want to make sure we pursue every opportunity to obtain financing for her.”

In the meantime, Kelly, one of her two teenage sons and two large dogs have been living for about six months in a motel room at the Nordic Lodge, for which they are grateful.

Gaerlan has been living with her two children in a townhome that is more extensive than what they can afford, according to her mother, who has been helping her daughter keep the household together while her husband is stationed elsewhere in the military.

Gaerlan sought out the Steamboat Today for an interview at the newspaper office this week but canceled it.

“We feel fortunate to have worked alongside the numerous volunteers that help families realize homeownership and take that solidarity with us as we move forward," she wrote in an email.

In a previous phone interview, she briefly indicated she did not think Habitat had dealt fairly with her.

Meyer said that if necessary, Habitat can draw from a pool of potential new partners who could move into the Riverside duplex. The new owners would sign a contract to contribute in-kind labor to future Habitat projects including a number of remodels planned this year through Habitat's Brush with Kindness program and possibly a new house that could break ground in 2014. She said Kelly and Gaerlan would be reimbursed the value of upgrades for which they already have paid, like microwaves and blinds, if they don't end up being the buyers.

“We’re undaunted,” Meyer said. “We’ll focus this summer on (home remodels) through our Brush with Kindness program and look for land for a new project in 2014.”

Kelly said she wants three things: to move into her house, to make volunteers aware that Routt County Habitat bills its partners for volunteer labor and to prevent other people from winding up in her situation.

To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com


Scott Wedel 4 years, 1 month ago

To go from a suggested price of $120K at the start when the families were volunteering to a final closing price of $199K is seriously messed up.

If it was a private developer then if the costs spiraled so high then the private developer makes less money.

Apparently, if it is Habitat that has a project spiral out of control then they still take their markup and the families suffer.

After this, no family is going to volunteer on "their" new house.


Scott Wedel 4 years, 1 month ago

One family volunteered 350 hours, paid for stuff and didn't even bother to make an offer at the final price. The other family also volunteered 350 hours and had no chance at qualifying for the financing.

Some of the volunteers were friends of the family and would have preferred that their efforts went to lower the house price to the family and not to help Habitat's rollover for the next project.

Both families would have been better by not getting involved with Habitat and bought a fixer upper that they and their friends spent hundreds of hours improving.

That Habitat doesn't see how this went wrong for the families whom met their commitments and isn't willing to take a smaller rollover for the next project is shameful.


Scott Wedel 4 years ago

The most distressing part is “We’re undaunted, ..."

This should cause serious reevaluation of numerous policies.

1) Projected new owners should be qualified to loans at a specific level. And periodically qualified again during the build process so that changes in financial situation or lending market are promptly known.

2) Cost of project needs to be tracked and continually compared to family's ability to purchase.

3) Project management is weak if things like an extra $30,000 for utilities are a surprise and then the price spiral to $199K from $150K. Normally, cost of extending utilities is researched before buying a lot and certainly learned prior to starting construction.

There should be no way that projected new owners are buying upgrades without everyone being sure the current projected purchase price works with their ability to get financing.


Paula Salky 4 years ago

This all just seems so wrong. Two empty Habitat homes and 2 families struggling to find a more permanent place to live. I can't imagine being in these women's shoes. So much promise, hope...and then dissapointment. Steamboat Springs....where is the heart? Volunteers put in the generous time to make this home possible and these families put in the man hours and their sweat equity. Something just doesn't seem right.

http://www.habitat.org/how/factsheet.aspx What is Habitat for Humanity International? A nonprofit, ecumenical Christian housing ministry that has helped to build or repair over 600,000 decent, affordable houses, serving more than 3 million people worldwide. Our vision: a world where everyone has a decent place to live. Founded in 1976 by Millard Fuller and his wife, Linda.

How does it work? Through volunteer labor and donations of money and materials, Habitat builds and rehabilitates simple, decent houses alongside our homeowner partner families. In addition to a down payment and monthly mortgage payments, homeowners invest hundreds of hours of their own labor into building their Habitat house and the houses of others. Habitat houses are sold to partner families at no profit and financed with affordable loans. The homeowners’ monthly mortgage payments are used to build still more Habitat houses. How are partner families selected?

Families in need of decent shelter apply to local Habitat affiliates. The affiliate’s family selection committee chooses homeowners based on their level of need, their willingness to become partners in the program and their ability to repay the loan. Every affiliate follows a nondiscriminatory policy of family selection. Neither race nor religion is a factor in choosing the families who receive Habitat houses. What are Habitat affiliates?

Community-level Habitat for Humanity offices that act in partnership with and on behalf of Habitat for Humanity International.Each affiliate coordinates all aspects of Habitat home building in its local area.


mark hartless 4 years ago

This is an easily predictable and likely repeatable outcome.

When people have no vested interest in something, or when their vested interest is artificially reduced things like this are bound to happen.

Owning real estate is not for everyone, and it sounds like these folks are exactly the kind of people who have NO business buying a home. If you cant afford a home with a ZERO interest rate then how will you EVER afford to re-roof it? To meet the homeowners insurance deductible for the storm damage? To re-pave the driveway, re-paint, re-carpet, plow the driveway, shovel the roof, replace the lawnmower, replace HVAC, water heaters, dishwashers, ranges, rotting decks, and on and on???

And what about the property taxes?

Never mind the horrendous fact that you are stuck in a property that is being held back from natural market appreciation?That one alone is gonna KILL you in the long run.

Having this home price rise completely out of this persons price threshold might have been a huge blessing in disguise.

Home ownership is expensive. My family has been in the real estate rental business for over 40 years and all our units stay full all the time because HOME OWNERSHIP IS NOT FOR EVERYONE.

It might make people feel good to think they are helping someone buy a home, but the road to hell is paved with good intentions, and owning a home you can't afford t maintain is as close to hell as any other form of slavery. These organizations should stop trying to fitt everyone into homes they have no business buying. Giving someone a home they can not afford is not HOUSING them, it's JAILING them.


Scott Wedel 4 years ago


This is not a generalized government attempt to distort the real estate market

This is a charity which uses volunteers and donations to allow selected people to be able to afford a home. Habitat has been successful because they both select the new homeowners based upon financial situation and require the selected people to volunteer hundreds of hours. If the families are not good candidates for home ownership then that becomes clear enough during the construction process.

This may be the first time in Habitat's history in the US that two families, both of which did all the volunteer time and whose financial situation did not fall apart, have not been able to move in. Thus, it is entirely unexpected, not predictable.

It is absolutely bizarre that the final cost to the projected owners after all of the volunteer labor and donated materials is within 8% of fair market value. That means a private general contractor without donated materials or labor would have expected to completed at a lower price.

Obviously, Habitat's project management fundamentally failed on managing project costs. And somehow they failed to notice their costs had spiraled out of control since they allowed the families to continue volunteering on the expectation that they were building their homes when, in reality, the resulting price was well above what they could afford.

For a local Habitat official to say they are "undaunted" suggests a level of unfathomable incompetence. They basically wasted all the donated materials and donated labor to end up at a cost basis comparable to a private contractor. Someone or some group considering volunteering why isn't out volunteer effort making any difference? And should apparently avoid wasting their efforts on the local Habitat projects until they become daunted and undergo the deep reforms to prevent this from ever happening again. Until then, local volunteers would see more benefit if they were to organize their own projects.


mark hartless 4 years ago

I understand that it's not gubbamint, Scott.

The concept is still the same: remove someone from the vested interest or responsibility of ANYTHING and it all turns to crap real fast.

This is an unbreakable LAW of human nature; one which gubbamint AND Habitat should really try to understand better.

Why, do you think, did "Habitats project management fail [to] manage project costs??? I'll tell you why. Because the management was insulated from the Some people should NOT own homes, or is it your contention that this truth only applies to guns??


mark hartless 4 years ago

What I was saying when the script was hijacked was management was insulated from the CONSEQUENCES OF THEIR OWN FAILURE. Therefore, they didn't have to care whether the costs spiraled up.


Scott Wedel 4 years ago

The Habitat owner is not removed from a vested interest or responsibility. They have personally worked hundreds of hours on the house which gives a vested interest in pride of work. The sweat equity is equivalent to a substantial down payment. The volunteer labor and donated materials should result in the owner being in a house at well below market prices so the owner has a great financial interest to keep the house.

Yes, the owner may not have a great deal of cash into the house, but the owner has sweat equity and nearly a guaranteed high rate of return on investment. While Habitat has a deed restriction limiting appreciation, 2% or so on $200K is still $4k which is substantial on a small down payment.

And yes, as a charity, Habitat does not make a bigger profit by properly managing a property. But, as a charity, they have a charitable incentive to effectively use the volunteered labor and donated materials. There are other somewhat similar charities such as Rebuilding Together that focuses on remodeling.

Volunteers are naturally attracted to more effective charities because then their volunteer efforts make a difference and are not wasted.


jerry carlton 4 years ago

I paid $400,000 for a not very fancy 1531 sq foot condo 6 months ago. I either made a very bad buy or $199,000 for 1200 sq ft of a duplex sounds like a very good price.


Scott Wedel 4 years ago


Well, hopefully your condo is in a prime location. There is a similar townhome available in West End Village which is probably a slightly better location for $229K and that won't have deed restrictions.

If you figure in the value of 350 hours of labor and the likely appreciation that the Habitat deed restrictions prevents the owner from realizing, the $229K unit is a better deal than the Habitat house.


Renee Gaerlan 4 years ago

I would like to start by thanking those of you that have taken time to read the article and posting a thoughtful response. In that same vein, I feel it prudent to respond to the inaccurate statements made by Routt County Habitat for Humanity officials so that the family(s) that ultimately end up purchasing the Riverside duplex are properly informed of the potential caveats.

First, I cancelled my interview with Tom Ross, whom I believe stated the facts as far as he was informed, because it is extremely difficult for me to emotionally detach from this situation. Our family has been so deeply impacted by the events that unfolded over the past 24 months that we are moving away from my hometown this month.

PURCHASE PRICE The “partner families” were verbally told on numerous occasions that the project would not cost more than $150,000 at the high end, even with the “exception of a couple of surprises along the way” as Meyer stated. I implore readers to reference numerous articles in the Steamboat Pilot, including but not limited to the following:

‘Steamboat briefs: Routt County Habitat project done for winter’, December 1, 2011 where then Executive Director Jody Patten said in an email that the organization is trying to build each 1,100-square-foot duplex unit for less than $100,000.

‘Routt County Receives $90,000’, March 4, 2012 article where if you add the $90,000 Thrivent grant to the $60,000 Habitat raised, plus the $15,000 commitment that is $165,000. Patten said Habitat still needed to raise $120,000 to cover the rest of the cost of the two-duplex unit. My math places the estimated cost at $142,500 for each side.

‘New Habitat project kicks off in Steamboat’, March 22, 2012 stating the estimated cost of each duplex unit would cost $110,000’.

The target moved, commonly known in the construction world, but how does a non-profit project where the build is done primarily through volunteer labor jump nearly 100%? Scott Wedel commented “Habitat's project management fundamentally failed on managing project costs” and for duplex built cost to jump from $100,000 to $199,000 I do not think that statement is off base.


Renee Gaerlan 4 years ago

MORTGAGE Meyer stated in the article “We can’t charge any more than 30 percent of gross household income.” The “formula” Meyer refers to is to include PITI---(mortgage, principle, interest, taxes and insurance). I have nearly a dozen documents and emails from Routt County Habitat for Humanity officials (RCHFH) stating that the “partner families” would be paying a “30 year, zero interest loan” to purchase the 1,164 square foot duplex and that “our [Habitat]monthly mortgage payments for completed homes in Routt County have not been more than $450”. After believing we would have a “30 year, zero interest loan” June 12, 2012 we received an email from then executive director, Jody Patten, stating:

“Since that time a second option has emerged that we like and very much intend to pursue for internal reasons and also because it seems very equitable. USDA will hold the first mortgage for approximately $30,000 on each of your homes. Habitat will hold the second mortgage for the majority of the cost of your home (at zero percent interest). Your total monthly mortgage payment for both (one with Habitat and one with USDA) notes will remain the same and within the agreed upon maximum of 30% of your take-home pay”.

Note the “take-home pay” which is NET not GROSS as Meyer stated.

Our family had already invested money and sweat equity hours into the build and concluded that it still made sense to move forward paying interest on a portion of the mortgage. We did not receive any further communication on the mortgage terms until an email sent from Jody Patten on behalf of RCHFH November 30th, 2012 which stated:

“In the event that both of the partner families qualify for the USDA loan, then we will likely fund 50% both of your mortgages via a USDA loan. The Habitat-carried balance of your note would be at zero-percent. What we do not know is what your USDA note rate would be, but it would not exceed 3.125% over its life of 33 years.”

Once again the target moved but not as drastically as it did on January 8, 2013 when we received the “Certificate of Eligibility” from the USDA stating that we (Gaerlans) qualified for a $200,000 loan at 3.125% over a 33 year term. Did I miss something somewhere?

Meyer stated in the article “We’re going to take over $100,000 (in debt) in a second trust deed.” Interesting because the Gaerlan family was offered a purchase price of $199,000 using the USDA funded loan at 3.125% over a 33 year term on the full $199,000 selling price.


Renee Gaerlan 4 years ago

VOLUNTEERS “Meyer said it was Habitat, not Kelly, who recruited the volunteers. She added that it’s within Habitat's organizational guidelines to assign a portion of the value of skilled volunteer labor to the cost of the house to generate a sum that can be rolled into the next project.”

I have countless friends, family members, church parishioners, Army Reserves, and city employees that would dispute those statements. In fact, when I told one friend that RCHFH built in a cost to our family for his “skilled labor” time he was pretty upset and said he was going to bill RCHFH for his time.

DECLINING TO SIGN In the November 30, 2012 email I referenced above, Jody Patten stated that each duplex unit would be sold for $199,000, but that the home had yet to be appraised, and that:

“We believe the home will appraise closer to $250,000 and be taxed at that rate ($67.67/mo)”.

When the “partner families” were presented with the standard real estate contract, the home had not yet been appraised and we were asked to enter into the contract prior to the appraisal, which subsequently came in at $215,000, not $250,000 as Habitat officials speculated. Who buys a house and/or signs a binding contract without an appraisal and full disclosure of purchase terms?

Is $199,000 for a home in Steamboat a “very good price” as Jerry Carlton commented when it does not come with any structural, electrical, plumbing, or otherwise warranties as it was built by volunteers, is double deed restricted, can only appreciate at a 3% cap per year, must be sold to a family at 60% AMI (average median income) or seller (“partner family”) is responsible for paying back a $20,000 CDOH grant and possibly others, must split any gains 50/50 with Routt County Habitat For Humanity, has a deed that was recently changed wherein “temporary vacations may not exceed an aggregate total of 30 days per year”, and 350 sweat equity hours must be completed prior to move in? While I do not dispute that the “partner families” were aware of some of the aforementioned points, it was at an anticipated purchase price of no more than $150,000, and a zero interest loan. I have never heard a deed limiting a family to be away from their home for an “aggregate total of 30 days per year”.

My husband and I consulted a highly regarded real estate agent/owner in town and he told is the deal had “too much hair on it” and that it just didn’t make sense. Further, we were informed by another source that any family that purchases the duplex under the terms our family was offered will be upside down the moment they sign.


Renee Gaerlan 4 years ago

On the heels of our meeting, we hired an attorney and countered the offer. We offered to purchase the home for $150,000, to have the deed changed to the original vacation clause reading “one year out of every five” as it does for all other Yampa Valley Housing Authority deeds, and that RCHFH offer the Gaerlans the same zero-interest terms on a portion of the mortgage as they offered the Kelly family.

RENDERED HOMLESS On January 22nd, 2013 our attorney received a letter from their attorney with the following:

“With that said, this letter is being sent to confirm that the Gaerlans have chosen not to partner with Routt County Habitat for Humanity regarding the purchase of the Riverside duplex unit. As such, the Gaerlans will soon be receiving a refund of their $500 deposit as well as a refund for any additional upgrades on interior items that the Gaerlans paid for out of pocket”.

Again, I must have missed something; we countered their offer and they took our home away from us.

According to Tom’s article:

“Kelly and Gaerlan would be reimbursed the value of upgrades for which they already have paid, like microwaves and blinds, if they don't end up being the buyers”.

Per the letter sent on January 22nd, 2013 we would “soon be receiving” our monies back. We have not received any portion of our monies and on March 14th, 2013 their attorney sent our attorney an email stating that the RCHFH board is requesting us (Gaerlans) to sign a general release with confidentiality and non-disparagement provisions, at which point they will refund for our deposit and out-of-pocket expenses. Dumb founded.

ONE FINAL QUESTION RCHFH Board president Kathi Meyer stated in a meeting with our respective attorneys that RCHFH only owes the following amount for the Riverside duplex: $50, 000 to Yampa Valley Community Foundation, and $55,000 to the City of Steamboat Springs. She further stated that the remainder of the project was fully funded by grants and donors. If her statement is accurate the following is true:


Habitat for Humanity is a non-profit organization that offers homes to families without realizing a profit on the sale of the home. Isn’t the difference of $293,000 a profit?


Renee Gaerlan 4 years ago

Although it is true that home ownership is not for everyone, I have been told that people in the community believe we somehow did not do what we needed to do to get into the house. To the contrary, the only thing we did not do is sign a contract that would have hindered our family. My boys tiny handprints are painted inside the walls of the rooms that should have been theirs, my 86 year old grandmother wrote a message in the hallway wall, my friends & family that volunteered on the project signed the walls, and I asked every single volunteer that I worked with to sign so that the walls of our home would be filled by the hearts and hands that helped make it possible. This is not the outcome we would have ever expected from a Christian based non-profit organization.


Kat Kelly 4 years ago

Thank you Renee for making the truth more clear. I can and will attest that Mrs. Gaerlan has stated is the absolute truth as we have gone through the last two years believing we were to be not only neighbors, but also have become family and envisioned growing together over the next few decades.

I am truly going to miss my friend whom I now call sis, not to mention will miss all the grand firsts her kids are going to have.

This home was suppose to be a happy and joyous event in all our lives as well as for this community, but even though we scheduled countless meetings with the President of RCHFH as problems and issues arose along the way, nothing was ever done to correct these administrative issues.

To make a one more corrections, as far as the above quote, "Meyer said, that Habitat officials did not fully understand the implications of financial judgment for the organization’s ability to close on the sale of the duplex unit to Kelly. The problem, Habitat learned when a title company employee joined the board, is that the old judgment could be turned into a lien against the new duplex, meaning the transaction cannot be closed until the judgment is cleared." Funny that I told them this fact in my application for the home, as well as in my 1st interview with a Board Member whom is a Mortgage Writer for a local bank. At that interview I asked her about this judgement and if it would keep me from buying my home, as I did not want to go through the entire process, build up my families hopes and get to the moment of signing and be told I could not buy the home. She stated at that time, "if it were any other mortgage than yes that would prevent you from purchasing the home, but since it is a Habitat Home and they carry there own Mortgages, it should not be a problem". So are they now saying this board member whom has been writing mortgages for more than 20 years was unaware? This seems very unlikely to me, and yes this person is still on the RCHFH Board and has been through out the family selection and build.


Kat Kelly 4 years ago

I love this community and am still fighting the good fight for my home, this is my forever home!

I attended the last RCHFH board meeting and offered to pay the original asking price of $199,000.00 if they would simply finance the home, verses the current contract of $185,000.00 with $68,000.00 in outside financing. I was thanked for my offer, but was told that RCHFH owes $55,000.00 to the Yampa Valley Community Foundation upon sale of the property, and as they do not have the funds to pay this loan, I must attain that funding for them.

I was continually told that the $90,000.00 Thrivent Grant pays upon sale of the property, so my question is why can not the $55,000.00 owed to the Yampa Valley Community Foundation be paid from that grant money and Habitat finance my home?

My family and I are very appreciative of the community support we have received and a special thank you to Lift Up and Holy Name Catholic Church as they were most helpful in getting us into the Nordic Lodge, and the Nordic Lodge has been more than generous as they are allowing us to pay a minimal rate in comparison to their nightly rates. We are forever grateful for their generosity and charity. If it were not for them, we very likely would have been sleeping in our vehicle in the middle of winter.


Bob Smith 4 years ago

I paid $400,000 for a not very fancy 1531 sq foot condo 6 months ago......time for a new agent Jerry


Scott Wedel 4 years ago

Kat and Renee,

I think those are both tremendous letters. The paper should print each in their entirety. I would seriously consider talking to a larger news organization. This is a big story. Once the story gets out of this valley then it can easily become a national story.

I think one thing left to write is a letter signed by various volunteers stating that their primary focus when volunteering on these project was to benefit the Gaerlan and/or Kelly families. That their primary goal in volunteering was to provide lower cost housing to the Gaerlan and/or Kelly families.

Have you been provided a detailed accounting of how the final price was $199K? Have you have been provided a detailed accounting of volunteer efforts that Habitat says is to benefit Habitat?

Seems to me that if people volunteered with the intent to benefit you then Habitat's own policies explicitly forbid Habitat from benefiting from that donation.

From http://www.habitat.org/how/factsheet.aspx

Habitat houses are sold to partner families at no profit and financed with affordable loans.

How are donations distributed and used? As designated by the donor.


Renee Gaerlan 4 years ago

Kat asked for the "formula" on several occasions in December when we were trying to understand how the home sky rocketed to $199,000. Kat was sent an email on Dec 6, 2012 from Jody Patten stating:

"Our Habitat construction committee just met Tuesday night and has unanimously decided not to provide our partner families with the detailed construction costs and in-kind donations. With construction bids, pricing is most often proprietary and it is no different for our various subcontractors even though we are a nonprofit. We feel that providing you with the formula used and the documentation to prove it is in line with Habitat state and national policy is more than sufficient transparency"


Renee Gaerlan 4 years ago

There were 3 or four project managers from Nov 2011-Dec 2012. I know that at least 2 of them quit; one on the spot due to a bad experience with RCHFH leadership. The project lacked communication from the onset.


Kat Kelly 4 years ago

One piece of information that has not been told is that the Gaerlan's are a military family. I hope they do not mind me revealing this, but I am so proud to know this sailor and applaud everything he does to protect our country.


Renee Gaerlan 4 years ago

Thanks Kitty; we are both proud of our jobs in service. Terry sacrificed precious time away from our boys to secure a stable living situation. We can never get that time back, but we can acknowledge the sacrifice.


Scott Wedel 4 years ago

From Habitat.org: The homeowners’ monthly mortgage payments are used to build still more Habitat houses.

According to the Habitat national organization, since the cost of a project is nearly zero dollars to the local organization then the local organization can provide the mortgage and take the monthly mortgage payments to help build more Habitat houses.

But that is not true for our local Habitat. They want the new owners to take out big USDA loans so Habitat can take out a huge amount of cash from the project.

Pretty sad that RCHFH website still shows Gaerlan and Kelly as their new Habitat partners. It has only been 4 months since Gaerlan didn't sign the purchase contract and is apparently no longer welcome to buy what her family worked on.

RCHFH website still says that they will finance it for 30 years at 0% interest.

Are Habitat Homes Free?

No. Habitat is a "hands up" and not a "hand out." Each homeowner must be willing to devote many hours to building their home, their neighbor's home or to other Habitat projects. Habitat homes are sold at no profit, with a 30-year zero interest loan from Habitat.

From Renee's posts:

” to purchase the 1,164 square foot duplex and that “our [Habitat]monthly mortgage payments for completed homes in Routt County have not been more than $450”

My calculations show that a 33 year loan of $200,000 at 3.125% is $810 for just interest and principle. Add in property taxes and mortgage insurance then it is more than double the original estimate of $450.

If RCHFH were to honor the promise still on their website then $200,000 interest free loan is $505 a month. Probably close enough to the original to work for the families. So all that RCHFH needs to do to solve this for their Partner Families (???) is to honor the promises they are still making on their website.

Have the the national hq of Habitat been contacted about these problems to see if they can help you deal with RCHFH?


Kat Kelly 4 years ago

Yes, I contacted Denver HFH as well as HFH Colorado and basically got nicely told to bend over and take it.


mark hartless 4 years ago

Intrest free for 30 years is $555.56/ month.


mark hartless 4 years ago

Oh, and that does not include taxes, insurance, a maintainence savings account, etc.


Renee Gaerlan 4 years ago

This statement is accurate based upon the terms widely posted online (which were recently altered on the RCHFH site), in official documents, and verbally for 24 months. Sadly, that is not accurate based upon current terms set forth.


Scott Wedel 4 years ago

oops, thank you for catching it. Apparently, I still had 33 years of the USDA loan as the duration of the interest free loan.

The difference between the interest free vs the 3.125 USDA loan is still $265 which is significant.

If RCHFH is the lender then they don't need mortgage insurance since RCHFH would want the house, not cash, if there were to be a foreclosure.


Scott Wedel 4 years ago

Talked to a neighbor of this house.

Seems that the construction process was messed up with one day's work often been removed and redone by the next day's work crew.

And now the neighbors have been keeping the property clean as the melting snow revealed debris or the wind blows stuff around.

Doesn't appear to be any insider story of the Kelly or Gaerlan families being problematic during the construction process.

RCHFH should be ashamed of itself for how it has treated these families. Simply no excuse for accepting families into the process and having them work on the house only to be told of significantly different financial terms at the end of the process.

And RCHFH website's continues to show they are deceptive organization. Their website has now removed mentioning the Kelly and Gaerlan families. Their page on the duplex quotes numerous SB Today articles, but somehow forgets to mention this article.

It still states exactly what the Kelly and Gaerlan families say was their understanding of the financial terms:

When their homes are complete, each will pay a down payment and a monthly mortgage of $400 to $500 based on the cost to build each 1,100-square-foot unit. Those payments go back into Habitat’s “Fund for Humanity” to help build more homes.

And concludes with an outright lie:

We are blessed [....] and getting our partner families in by Christmas!

City of Steamboat donated $25,000. If our taxpayer money is being given to a charitable organization then the City Council has the obligation to get answers when the expected result is so far from the promised outcome.


Kat Kelly 4 years ago

Thank you Scott for your continued support. And a huge Thank You to the neighbor that is cleaning up the yard. It is very difficult for us to go by there as we feel this is our home and it is heart breaking for all of us be there knowing it is ready for us to move in and yet due to the fact that we are having to borrow from Peter to pay Habitat's Paul or lose our home is devastating to say the least.

I have tried to find anyone willing to make us a personal loan to pay off the Judgment so we can better qualify to borrow money to pay off Habitat's debt, but so far we have been unsuccessful.

I continue to pray everyday that we will soon be able to move into our home. The support of this community has been overwhelmingly great!


Scott Wedel 4 years ago


I am not sure why the existing judgment is such a show stopper. It isn't that much different than if you had already purchased the house and then later had a judgment filed against you that was then turned into a lien against the house. If you were to sell the house then the more senior lenders (ie RCHFH if they had kept their promises) still gets paid first and then any others before you get any money from the sale.

So, it makes sense to me why RCHFH wasn't that concerned with the judgment when they accepted you into their program. RCHFH still gets their money and then whatever is left could go to pay the judgment instead of to you. Which might be bad for you, but doesn't cause any particular problems for RCHFH.

Regardless, once RCHFH knew about the judgment and allowed you to continue working on the house then they accepted the moral obligation to figure out how to get you into the house. Which, to me, seems that they need to accept the consequences of their mistakes and self finance their clients.

The big question not answered is why does national Habitat have a policy that is restated on RCHFH's website of self financing their clients and financing future projects from the monthly income, but RCHFH is not willing to finance either family on this project. Instead RCHFH wants to immediately pull a huge amount of cash out of this project by making the buyers get FHA loans. This is odd because RCHFH's actual cost is minimal because of all the donations and so they do not owe a lot of people a lot of money when finishing a project.

Just curious, apparently the added $30,000 for utilities was related to repeated digging into the street for the water and sewer lines. Do you know why it became such a costly issue?


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