City housing director outlines ambitious program for next year
Grants combined with land trust part of affordable housing budget
By RICHARD HANNERS / Whitefish Pilot
The Whitefish Housing Authority is preparing to set in motion an ambitious new program to assist homebuyers starting next year.
The new program addresses the problem that homes continue to increase in value here while wages do not, and that the Housing Authority's original program of down-payment assistance recaptured at sale was not meeting the need for affordable housing here.
Since 2004, the Housing Authority's homeownership program has helped 18 households purchase homes in Whitefish. The Housing Authority was awarded a $324,500 community development block grant in 2005, which already has been spent. Altogether, the program has received about $1.5 million in grants.
The Housing Authority and its new partner, the Whitefish Area Land Trust (WALT), plan to apply for $1.5 million in grants next year with the goal of aiding at least 15 households purchase homes by the end of 2010.
As planned, 14 of the homes will be purchased through WALT's homebuyer-initiated purchase program (HIP). One of the homes will be built and owned by Habitat For Humanity on land held by WALT.
The HIP program helps homebuyers secure a mortgage loan and searches for a home with the buyer's Realtor. WALT sets the parameters for location, size, condition and price of the home. At closing time, WALT buys the land, with a subsidy, and the homebuyer purchases the house.
The Whitefish City Council on Monday approved the Housing Authority and WALT's request to partner in an application for a $450,000 community development block grant. No matching funds from the city are required.
So far, the city has not received any money from the voluntary inclusionary zoning program since it started in 2005. Developers can gain unit-density and open-space reductions in exchange for providing to the Housing Authority either 10 percent of the project's units or a payment-in-lieu.
The original $3,000-per-unit payment-in-lieu figure was doubled to $6,000 shortly after the voluntary program began. It was increased to $11,700 this year, but while the program is currently pledged two units and $1.6 million, no payments have been made.
The Housing Authority has proposed a $3.2 million budget for 2009. That includes $1.8 million from homebuyers in the form of mortgages and down payments, the $450,000 community development block grant they brought to the city council, a $450,000 HOME Partnership Program grant and a $500,000 Neighborhood Stabilization Program grant.
WALT is a nonprofit community land trust program that uses a "ground lease" legal device to enforce restrictions on the property on which a home sits. Benefits to homebuyers include reduced mortgage costs, the long-term security of homeownership, the right to will the home to spouse, children or other individuals, the ability to accumulate earned and market equity, and support from WALT staff.
The homeowner must pay a $25-per-month fee to WALT and all taxes associated with the property. Property taxes and mortgage interest are tax deductible, as for all other homeowners. The homeowner must also seek permission from WALT for any improvements or remodeling to the home, and no loans for improvements can be secured to the ground-lease home.
If the homeowner wants to sell the home, it must be sold to a qualified heir, an income-qualified buyer or to WALT. The sale price will be calculated by using the WALT resale formula so the home will remain affordable for the next buyer. Homeowners will get 100 percent of their earned equity plus a 25 percent share of the market equity at closing.
To be eligible under the WALT program, a homebuyer's maximum income must be at or below 125 percent of the area median income as defined by the Department of Housing and Urban Development. The homebuyer must also show sufficient income to support housing costs.