Guest Column

Down Payment Funds Fulfill Need in Flathead

One of the keys to a great community is access to stable, affordable housing

For some in the Flathead County, affording a home isn’t easy, and affordability isn’t much better across the rest of Montana and the United States.

According to Jim Kelley of Kelley Appraisal, who has monitored Flathead County real estate trends for more than 30 years, the median price of a home in 2016 was $255,000, 5.2 percent higher than the 2015 median of $242,500.

“Over the last three years, prices have started to outpace the affordability index and this will likely become exaggerated as interest rates increase, resulting in a lowering of affordability,” Kelley wrote in his 2016 report.

With statistics like these in mind, the Montana & Idaho Community Development Corporation launched a program to help working Montanans afford a home. One year later, we can say it is indeed fulfilling a need.

A private not-for-profit financing company headquartered in Missoula, Montana & Idaho CDC launched its HomeNow $0 down mortgage program across the state in December 2016. The program is designed to support those who have a steady income and decent credit, but don’t have enough savings for a full down payment. HomeNow offers a grant for eligible borrowers to cover up to 100 percent of down payment and/or closing costs – i.e., all the cash they need to close. It isn’t a second mortgage, and there’s no requirement to repay at any time.

Since awarding our first HomeNow funds in December, we have provided over half a million dollars in down payment assistance, and supported home purchases of almost $13 million in Montana. The average grant size is almost $8,000, and the average buyer age is 33.

The homebuyers we have seen are hardworking Montanans – people in health care, police officers, teachers and retail employees who make a decent living and contribute in meaningful ways to our communities. Thanks to HomeNow, these individuals are now building long-term equity in homes of their own.

How does it work?

Borrowers need to qualify for a 30-year fixed-rate mortgage – we have government and conventional options available – and have an income and credit score within the loan program’s established limits. On the conventional side, there are no income limits for homes purchased in low-income census tract areas.

Borrowers also need to work with a HomeNow participating lender, and we’re proud to have built partnerships with several who share our vision of increasing access to affordable housing. In Flathead County, they include First Interstate Bank, Guild Mortgage and Mann Mortgage, with new lenders continuing to join.

The HomeNow $0 down mortgage program aligns with Montana & Idaho CDC’s 30-year history of transforming the lives of individuals and strengthening community prosperity. We believe that one of the keys to a great community is access to stable, affordable housing.

Through our new HomeNow program, we are working to make that mission a reality, one homeowner at a time.

Dave Glaser is president of the Montana & Idaho Community Development Corporation based in Missoula.