PHOTO: Habitat Archuleta staff (from left) Lori Henrickson and Leah Ballard. Photo courtesy Habitat Archuleta.
Did you know that Habitat Archuleta does more than just build homes?
Not only did Habitat Archuleta double our build capacity in 2022, but our administrative staff more than doubled the number of mortgages we packaged.
People partnering to build with Habitat Archuleta qualify for a USDA Direct mortgage loan. We can package these same mortgages for other homebuyers whose income is within the USDA guidelines. One applicant that qualified for a USDA Direct loan is currently under contract to buy a townhome, and three more are currently shopping for a home in Archuleta County. We are also assisting buyers in Montezuma County through the Habitat affiliate in Cortez.
Sellers who contract with a buyer using a USDA mortgage normally sell at their listing price. However, one local builder with an interest in affordable homeownership took a bold step to make his home affordable for workforce homeownership.
Monty Whitman was preparing to sell a 1,200 square foot home he had recently completed. A spec home with high-end finishes, the asking price was higher than what a USDA Direct Loan would finance in Archuleta County at that time. USDA Direct Loans have a unique feature that limits the purchase price in a given area. The purchase price cannot exceed what the USDA calls the Area Loan Limit, regardless of any down payment. Up until recently, that number was $420,600. (Updates on that number to come.)
Whitman’s goal was to sell this recently completed build to a buyer living and working in this community. He felt that if he could be assured the home would not be used as a short-term rental, or flipped for a quick profit, he could discount his asking price to meet the Area Loan Limit. In order to protect Whitman’s investment, Habitat Archuleta went to work creating a deed restriction that would cap the resale value of the property at the same discount percentage that Whitman offered the current buyers, for ten years.
This situation turned out to be quite the puzzle, as we learned when we submitted a proposed deed restriction to our attorney for review. She was familiar with housing deed restrictions having worked with several attorneys and non-profits in the San Luis Valley, and we put our heads together and came up with an appropriate legal deed restriction to ensure that the home would remain affordable.
The biggest challenges was ensuring that Habitat Archuleta would not profit from a future transaction, as our Habitat built homes include deed restrictions that are payable to Habitat Archuleta in the event of a sale — which is rare in our community. Unlike urban Habitat offices, many of our homeowners remain in their home for 30 years or more.
Habitat’s role in this transaction was far simpler than a whole construction project. We were merely the “program manager,” not the builder and seller. As of last week, we have another family in an affordable home, a deed restriction to protect Whitman’s investment in our community — all approved by the USDA — and that is no small feat!
This was all made possible by Whitman’s generosity, as well as two area real estate agents who donated and discounted their services, Barbara and Debbie. Our attorney, Angela, also discounted her work on a deed restriction that turned out to be a much bigger project than we’d imagined.
If you are interested in applying for a USDA Direct mortgage loan for use in the conventional real estate market, you must submit an application during the regular Habitat application season: first of the year through June 30 every year.
We are currently accepting applications for our 2024 build season through June 30, 2023.
We cannot thank our community enough on behalf of our homeowners, the businesses who employ them, and the children who rely upon them. Habitat Archuleta projects are a combination of volunteer labor, subcontractors, in-kind donation of products and services, and homeowner sweat equity. Habitat families work alongside volunteers to build their home and pay an affordable mortgage.
The 2023 build season will begin in June. Come summer, we’ll be on the job site Tuesday through Saturday, 9am to 3:30pm. Please call (970) 264-6960 or email office@HabitatArchuleta.org before you arrive so we can plan for how many hands will be on deck.
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Learn more at habitatarchuleta.org.