Federal loan program lands Steamboat woman in a house of her own
May 9, 2010
Steamboat Springs — Jackie Kuusinen, 27, never dreamed that she would be able to purchase a single-family home in her hometown. Then the Steamboat Springs real estate market turned, and she obtained a favorable U.S. Department of Agriculture no-down-payment loan.
Kuusinen just moved into a cottage-size home bordering a pond that attracts migrating birds in the Riverside subdivision.
"I feel so fortunate. It's really amazing," she said. "If you had told me a year or two ago that I could have afforded a house on land, I would have laughed."
She closed April 22 on her 576-square-foot house on .26 acres. It has a surprisingly spacious bedroom, a storage loft where she keeps her climbing and camping gear, a small but nicely remodeled bathroom, and a kitchen full of new Energy Saver appliances that came with the house. The previous owner of the home, built in 1972, was Rick Erb. A large shed on the lot will someday contain the equipment Kuusinen will need to establish a vegetable garden.
Cindy Chadwick, an area technician with the USDA's Rural Development Office in Craig, said that through September she has ample funds to help many qualifying homebuyers in the region. The direct loans made by the USDA cannot be applied to a house in Routt County selling for more than $274,800. However, the USDA also offers guaranteed loans through banks, for which there is no limit on the value of the home, Chadwick said.
Household income limits also apply to the direct loans. Like the loan amounts, maximum household incomes vary from county to county. In Routt County, a two-person household qualifying under the "very low income" limits could make no more than $32,250 annually.
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Chadwick said she has helped to close six home purchases in Routt County since Oct. 1 and has two more ready to close.
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Kuusinen is a Steamboat girl through and through. When she isn't working as the reference associate librarian at the Bud Werner Memorial Library and pursuing a related master's degree, she's teaching rock climbing for Colorado Mountain College.
She received expert parental advice in her home search — her mother, Melrose, is a Realtor with Exceptional Properties Real Estate, and her father, Bob, is the community president of Vectra Bank. However, she said her father and his bank were not involved in her home loan. Instead, she worked directly with Chadwick.
Jackie Kuusinen said her mother was urging her to look for property so she could take advantage of the $8,000 federal tax credit for first-time homebuyers before it expired at the end of April.
"My mom said, 'We will never see this again in our lifetimes.' Essentially, it's free money," she said.
"Everything in my price range was condos and townhomes," Kuusinen said. "We weren't looking at what my ideal was. I had one offer turned down. When this came up, I couldn't believe it."
Kuusinen locked in her mortgage at 4.875 percent interest. However, she qualified for a USDA subsidy that caps the interest portion of her monthly mortgage payments at 1 percent until her income goes up.
Her down payment assistance came from the American Recovery and Reinvestment Act, instead of the USDA's traditional funding for its direct loan program. Chadwick explained that the terms of ARRA don't allow the down payment funds to be applied to homes that need repairs. Because Kuusinen's home did not need repairs, Chadwick took the opportunity to tap the recovery funds.
In addition to getting a 100 percent, no-down-payment loan, Kuusinen was able to stack further down payment assistance from the Yampa Valley Housing Authority on top of that.
Chadwick acknowledged that the terminology of extending down payment assistance to someone who already does not have to make a down payment is confusing. She explained that the USDA sees it as leveraging its money by working with local affordable housing organizations.
Kuusinen's down payment help is not a gift, Chadwick pointed out. If she someday refinances her mortgage or sells the home, the funds will be returned at closing. The loan interest subsidy doesn't have to be repaid if she does not show a net profit when she sells the property.
Kuusinen said she hopes her case will inspire other Routt County households to apply for USDA housing assistance. Her advice is that people prepare themselves emotionally to persevere.
"Absolutely, the hardest thing is that it takes a lot of work to get the paperwork together," she said. "There is a preliminary application then another application. You have to get your bank statements and tax documents and pay stubs for four months. You think you're done and then there's one more thing. But Cindy was great about helping me."
She attaches a good deal of significance to her success in buying a home as a young, single professional woman.
"Not to be sexist, but to buy a home and be single, and a female, and young and a ski bum turned librarian feels rare," she said. "Within my lifetime, women didn't have all the rights we have now."
In the short term, however, one of Steamboat's newest homeowners is more intent on finishing her master's in library science and starting that vegetable garden.
"Just the potential of being in one place and developing that property is exciting to me," she said.
— To reach Tom Ross, call 871-4205 or e-mail firstname.lastname@example.org