Equity loans help create new owners

April 15, 2022

Montana Mortgages

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Great Falls will welcome 10 new owners through the NeighborWorks Great Falls Owner Built Homes program. U.S. Senator Jon Tester attended an event Friday at one of the newly built homes touting the program’s success and discussed the ongoing housing crisis both in the city and across the state.

“I have to be honest with you when I walked into the house, I thought, you know, just another house,” Tester said at the top of his remarks. “But that’s not it, just look around you. It’s damn nice.

Cascade County is expected to need 450 new homes per year over the next 10 years, about 190 rental units and 250 owner units, according to the Great Falls Development Authority’s housing study earlier this year.

Tester explained that 70 percent of Great Falls’ housing stock was built before the 1980s: “And that’s higher than any other market in Montana. »

“It’s just too difficult for too many families to find quality, affordable housing without literally breaking the bank,” Tester said.

How the program works

NeighborWorks Great Falls executive director Sherrie Arey explained that qualified applicants receive a “502 loan” from the US Department of Agriculture to build their home, which later turns into their mortgage. Then people commit to putting in 30 hours a week of “sweat equity” to build their own homes.

“The way it makes it affordable is that they build,” she said. “So they would need another 20 in that case, maybe $30,000 in loans that they can’t afford.”

Brenda Kukay of NeighborWorks estimated that mortgages range from $900 to just over $1,000 a month, which she says families are likely already paying rent. She said that before the program, some people rented or lived with their families.

Arey said construction is being supervised by professionals and local contractors are helping train people when construction is complete. She said the program usually takes 12 to 14 months, but COVID-19 has complicated their timeline, so for this group it was closer to 18 months.

Arey said Kukay works with families to ensure they are ready to commit to the project. Arey said people typically work one night a week and all day on Saturdays to make all hours work with their schedule.

Affordability in Great Falls, Tester comments on state’s slow distribution of emergency rental assistance

Arey said Great Falls still has the ability to be affordable.

“A lot of other cities have lost that,” Arey said. “We have it.”

She said she is grateful to the partners at the local and federal levels who help fund these projects.

Tester spoke about federal programs that help keep people housed, including the Emergency Rental Assistance Program through the American Rescue Plan Act, but commented on how the state has handled the funds.

“I think the state has been slow to provide these resources to families in Montana,” Tester said. “I hope that will change because we can’t play politics when it comes to keeping people at home.”

The state has distributed nearly $47 million of their over $350 million allocation, with the Helena Independent Record reporting in March that the US Treasury Department would reallocate $53 million of the total funds to other states, as Montana State failed to oblige at least 64% of the first round.

When asked, Tester agreed that people earning minimum wage would struggle to pay rent and said that’s where housing assistance can be used. The average overall rent costs more than $900, according to the GFDA study.

“Trying to find ways to get more rental units on the market as a bargain, some of these older buildings, maybe they can be rehabilitated,” he said. “I don’t think the state of Montana wants to get into the rental business, but there are things you can do to make interest-bearing loans more affordable to allow the private sector to do that.”

Tester said he’d like to see ARPA funds spent on housing and workforce training, though he said it’s ultimately up to local municipalities to decide where. go the funds.

New owners

It was quite a housewarming party for new neighbors Cameron Weninger and Ed Dustrude on Friday morning. The two new owners should receive the keys to the houses they have built in the coming weeks.

Cameron Weninger, 24, a first-time homeowner who works at Johnson Madison Lumbar Company, said he was grateful for the program, adding that otherwise it would have been difficult to get a home in this market. The tester said it would still be difficult and recommended Weninger look at his books.

The senator commented that in 1967 a house in this neighborhood cost $12,000. Tester earned his undergraduate degree in music in this district at the College of Great Falls, now the University of Providence.

Weninger said before the program that he lived with his family to save money.

Ed Dustrude, a 58-year veteran of Operation Desert Storm, is about to move into a three-bed, two-bathroom just next door to Weninger.

“When they say blood, sweat and tears, they’re not kidding,” Dustrude said of the building process. He praised the young people in the group who did most of the climbing and roofing work.

He said he had furniture from his apartment and storage furniture that he would be moving in the coming weeks.

Both were grateful for lower interest rates on their loans, one of the few silver linings to work on this during the pandemic, they said. However, they said almost everyone contracted COVID-19 at some point during construction and it caused several delays.

Dustrude said he bonded with Weninger over a shared love of hunting, and their new neighborhood would bond after that shared experience.

“When it comes to housing, the bottom line is that there is no one-size-fits-all solution, no silver bullet,” Tester said during his remarks. “The big takeaway here is that we need to take the whole approach above, all on deck, to make sure we’re supporting the Montana family’s ability to keep a roof over their heads.”