Nonprofit Seeks County Approval to Manage State-funded Workforce Housing Assistance Program
NeighborWorks Montana has systems in place to manage the $4.5 million in funding set aside for Flathead County workforce housing during the 2023 Legislature for a new homebuyer assistance program, which is contingent on county commissioner approval
By Maggie Dresser
When the 2023 Legislature set aside $50 million to address workforce housing across the state, lawmakers directed local housing nonprofits to establish management organizations for the new homebuyer assistant program and direct its funds, with $4.5 million designated for Flathead County.
If approved by the Flathead County Commissioners, the funding would be managed by a Community Reinvestment Organization (CRO), which was established following the passage of House Bill 819 during the 2023 session. The organization would be tasked with matching the government dollars from the allocation, for a total of $9 million in homebuyer assistance.
NeighborWorks Montana (NWMT), a housing nonprofit that creates homeownership opportunities for the state’s workforce, has applied to become a CRO in several counties, including Flathead, to help execute the program, which would provide homebuyers with 30% of the cost of a home as a loan or an investment while recipients would agree to an equity cap of 1% per year. The cap allows the remainder of the equity to be recycled back into the program to provide long-term affordability for future homeowners. Eligible households must earn between 60% and 140% of the area median income (AMI).
“This is a space that NeighborWorks has been engaged in for 25 years,” NWMT Homeownership Director Hanna Tester said. “We are good at secondary mortgage financing — it’s our bread and butter — and we’re good at raising and deploying capital. We would like to see the Flathead take advantage of employing this. What happens if they don’t is that $4.5 million will just be allocated to another county.”
In order to receive the funding, county commissioners must sign off on the partnership by Dec. 31 or the money will be reallocated elsewhere. Counties are not required to contribute to the match and are at no financial risk.
“There’s no obligation — we are not asking for money, we are not asking counties to contribute,” Tester said. “We just need that signed resolution.”
As of Nov. 22, county commissioners had not yet decided if they wanted to add the resolution to the agenda. Commissioner Pam Holmquist said she would like to receive more public comment on the topic as she learns more about the program.
Established in 1998, NWMT has helped facilitate homeownership in a variety of ways including the Resident Owned Community (ROC) program, which helps homeowners finance manufactured-home parks and prevents against eviction.
As a Community Development Financial Institution (CDFI) certified by the U.S. Treasury, the nonprofit provides financing that supports housing opportunities along with providing down payment assistance loans.
Historically, NWMT has helped 91 families secure homeownership in the Flathead through down payment assistance loans while lending $13 million leveraged in other financing sources including mortgages from local banks and credit unions.
In addition to Flathead County, the organization is approved by the cities of Kalispell, Whitefish and Columbia Falls to provide state HOME down payment loans, which help fill the gap between the total financing needed and the amount a primary mortgage lender is willing to lend for households at or below 80% of the median income.
“The cool thing about NeighborWorks Montana is we have all of these systems in place,” Tester said.
NWMT staff also work to guide prospective homeowners through the process by offering counseling and homeownership education, while working with mortgage lenders to make sure qualifications are met. The organization also offers gap financing, which helps fund development projects, down payments and closing costs.
In Flathead County, NWMT has provided more than 2,000 residents with homebuyer education and housing counseling while the nonprofit has provided more than $280,000 in grants to partner organizations for these services.
As housing prices remain unaffordable in Flathead County, with the median housing price at $600,000 in October, Tester highlighted the drastic spike in costs over the last 15 years.
For example, a family in 2009 earning 125% of the AMI was at about 88% of affordability — meaning income at 125% AMI amounted to about 88% of the average home’s purchase price. Families would have needed a down payment assistance loan of 12% of the home price to cover that gap.
In 2024, that same family would only be able to afford 72% of the average home — with a 28% gap in affordability.
“Despite families still working hard, wages have not kept up with home prices and the gap is too big for most wage-earning families to cover,” Tester said. “It is much harder now for average working people in the Flathead to attain homeownership.”