Down payment assistance

by Garett Dickinson

THE DOWN PAYMENT ON A HOME IS A MONUMENTAL STEP WHEN INVESTING IN THE FUTURE. People can arrive at this pivotal moment from different paths, but once they place a down payment on a property, homeownership becomes a tangible reality.

Since there are several ways to approach down payments, clearing the air around the process can provide first-time homebuyers with the confidence to move forward.

Many people mistakenly think they will need to save up a large percentage of their overall loan as the down payment; and the most commonly quoted figure is 20%. Although this can help homebuyers avoid private mortgage insurance and offer other benefits, it is not a mandatory figure.

Numerous types of loans and programs give borrowers options to pay less than the traditional 20% and can help with securing financing and reduce the cost even further.

Some loans, such as VA and USDA options, may require no down payment at all for eligible buyers. FHA loans may only require a down payment of 3.5% of a home’s purchase price. In addition to these loan choices, there are programs from the national level all the way down to regional organizations that can provide financial assistance for the down payment itself.

HomesFund, a local 501c3 nonprofit, has supported prospective homebuyers in Southwest Colorado since 2008 via an accessible three-step process.

Beginning with a free class offered monthly, participants learn homeownership fundamentals from local professionals like realtors and home inspectors, who discuss everything from underwriting to escrow. Completing this class is a gateway to the HomesFund programs and some programs offered by CHFA, the Colorado Housing and Finance Authority.

Next, a deeper dive will be taken through personalized pre-purchase and homeownership counseling. Individuals who have completed the initial class will have individual counseling appointments that will amount to a loan prequalification process. Taxes, income, credit scores, budgets and other factors will be reviewed and discussed on a case-by-case basis, and hopeful homebuyers will know precisely where they stand and what they might need to do going forward.

With the previous two steps completed, applicants will move on to the payment assistance portion of the process.

“We have one of the most generous down payment assistance programs in the whole state of Colorado,” said HomesFund Deputy Director Pam Moore.

A unique approach HomesFund utilizes is its shared appreciation loans. For instance, if an individual seeking to buy a home can only get approved for a $300,000 loan through a traditional financial institution but needs $400,000, HomesFund can step in to fill that gap. These shared appreciation loans are a 30-year term and are due then or at the time of resale or home transfer, after a cash-out refinance, or when the house is no longer the borrower’s primary residence.

Whatever accrued appreciation there is on the percentage of the home’s value that a HomesFund loan initially covered will be part of repayment. For example, a $100,000 loan on a $400,000 home purchase that is later sold for $475,000 would equal a $118,750 repayment. In this way, the homebuyer has extra purchasing power with no additional monthly payment burden when they buy the home.

“It’s really incredible assistance,” Moore said. “The HomesFund has this really fabulous designation called a CDFI, which means a Community Development Finance Institution, and it actually gives us the chance to be a bank with more of a social mission. So we’re still following sound underwriting guidelines, but we’re filling gaps that banks just can’t fill.”

Habitat for Humanity has also had a significant impact here in La Plata County and has been in operation nationally since 1976. Now a global program, Habitat for Humanity provides homeownership pathways, including down payment assistance, zero-interest loans and home construction or renovation. This is in addition to many other programs, such as assisting older people in improving their existing residences so they may continue to reside in them and disaster response services, like providing shelter assistance. Working off of the “partnership housing” principle, Habitat works with homebuyers, volunteers and the local community to build or renovate housing, most often for those with limited financial resources. A unique element of Habitat for Humanity’s homeownership assistance program is the “sweat equity” component. This means that those who will own homes through the program will also invest their time in building or renovating their future home and the housing of others.

In addition, Habitat provides education as a part of its process, empowering new homeowners with knowledge as well as finances, creating a well-rounded opportunity similar to those of the HomesFund.

Other regional businesses are using forwardthinking and new initiatives to help address the area’s housing issues, including First Southwest Bank and the First Southwest Community Fund. In addition to financing options the organizations provide small businesses and startup entrepreneurs, First Southwest also offers pathways to living stability for area residents through different programs.

For instance, they have provided financial support for local mobile home park residents to purchase the park they live in, addressing the issue of private owners selling to the highest bidder, who may then raise rates and drive out the original residents.

In addition, they have partnered with La Plata County Economic Development Alliance and La Plata County to offer low-cost, fixed-rate micro-loans to help offset the high move-in costs faced by renters. This Workforce Rental Assistance Program helps cover the first and last month’s rent and security deposit often required by landlords. By assisting the working class with securing an affordable rental, First Southwest Bank helps new residents establish roots in the community, perhaps while they save to purchase a property in La Plata County.

There are numerous financing options for those who wish to make a living or buy a home in Southwest Colorado, and those hopeful of putting down roots in this slice of paradise shouldn’t feel discouraged by financial status. With the proper preparation and assistance from organizations like Habitat for Humanity, HomesFund, and financial options like the First Southwest Community Fund, the dream of homeownership can become a reality.

970-749-0099 Cell

970-375-3219 Direct scottkurlander4@gmail.com www.scottkurlander.com

East Animas Village Commercial Center Investment Offering

Long term leases on 13 commercial condos, 4 residential condos and development lot approved for 16 units. High quality building priced less than the cost to build. Financial details available. Land with 4 building: 100 % leased: commercial & residential units

Building A: Main level 5 comm condos 5.625 total SF

Building B: Comm free standing 2,735 SF

Building C: Comm 17,330 SF

Building D: Res 615 SF 1 BR condo Vacant Lot

Future building site 0.482 ac

Potential building lot

Approved 16 unit plans avail

$13,200,000

MLS #787543

3,743 SF, 3 BR’s, 4 BA’s with mountain views

Open floor plan: true craftsmanship & custom ironwork

Main House: 2 master suites: one on the main level

2nd master suite: upstairs w/office, balcony & two sided fireplace

Open kitchen: Soapstone counters, large center island and seating area

Artistically crafted metalwork surrounding wood burning fireplace

Travertine & Slate floors, custom accents, handmade doors, arched doorways

Two car detached garage/storage buildings with office/gust house/workshop/apt

Studio apartment: 600 SF, 1 BR, 1 BA unit w/kitchen

Workshop space: main level, 1,800 SF +/ finished, heated, restroom

Bodo Industrial Park

750 SF unit with an open reception area, private office, storage closet and private restroom. Onsite parking and views of the mountains.

$750 per month + utilities

MLS #788884

$1,350,000

MLS #793030

 Prime mixed use property in the Grandview area

 In the county: east of the City Limits & Three Spring stoplight

 Prime Highway 160 frontage with shared access

 1.02 acres on the south side of highway

 Just over 1 acre of flat usable ground

 Single level mixed use building: 1,428 SF w/312 SF office

 Business is not included

 Residential apartment

 Detached garage/barn /shop: 336 SF, 24’ X 12’

 Large yard space with prepared pad: ready to extend shop space

Commercial Offices, High Traffic, Visibility

Easy access & parking. Common area deck. Elevator access. Finished interior & high speed internet. More units available soon.

Centennial Center

Partially fenced: Livestock & horse approved

10 acre irrigated property pond & sprinkler system

$1,495,000

MLS #801628

Under Contract

Turkey Trot Lane, Lot 3 35 rolling acres. Quiet & secluded. Fenced on 2 sides & several private building sites. Only minutes from Three Springs & hospital. Improved roads, gated entrance, well producing 15 GPM, electric to boundary.

$550,000 MLS #803732

700 Main Avenue, Durango, CO Each Keller Williams Office

Suite 202: 949 SF, open floor plan, corner unit, with windows. $293,000

MLS #801030

Suite 203: 921 SF, open floor plan, nice finishes. $325,000 MLS #800481

Suite 209: 1,031 SF open floor plan, 2 offices, floor to ceiling windows. $300,000 MLS #800482

1,200 sq. ft. refurbished retail, restaurant or office space. End cap, excellent storefront exposure, 200 amp, 3 phase power. Private restroom, rear alley access and delivery.

$1,800 per month + C.A.M. fees.

MLS #801839

Wild Turkey Canyon, Lot 5 35 rolling acres. Quiet and secluded only minutes from Three Springs and hospital. Improved roads, gated entrance, well producing 15 GPM, electric to boundary.

$428,000 MLS #802898

Twin Buttes

In town building site. 0.24 acre, open space, all utilities to boundary. Building site offers a street level home design with main level living and a walkout basement. Views of Twin Buttes.

$190,000 MLS #781848