COMMENTARY: What's the Future for Affordable Housing in Lyons?
By Amy Reinholds
The construction plan for public improvements that Habitat for Humanity must complete was approved by the Town of Lyons engineering staff last week, another hurdle cleared in the development of six permanently affordable homes at Second Avenue and Park Street in Lyons.
The next step for Habitat for Humanity of the St. Vrain Valley includes selecting a contractor to do the public improvement infrastructure work. A contractor will probably be selected by mid-August, according to Dave Emerson, executive director of Habitat for Humanity of the St. Vrain Valley. The infrastructure work is expected to take about three to four months.
Habitat for Humanity also needs building permits for the six homes, which have been previously committed by the Lyons Board of Trustees to cost no more than $15,000 per home (after an agreement to waive water and sewer connection fees that the Town has control of). Some of the work required for the building permits was already completed as part of the construction plan for public improvements. After Habitat for Humanity has the building permits for the six homes, the foundations can be poured for all three duplexes. The foundation work can overlap with the public improvement work if needed, Emerson said. Volunteers to work on construction of homes probably are not needed until later this fall, after at least the foundation for the first duplex is completed.
In November 2016, Habitat for Humanity of the St. Vrain Valley purchased six residential lots on Park Street, west of Second Avenue, south of the former Valley Bank building (which remains on a separate commercial lot). Two rounds of applications for home ownership have been completed: two applications were selected in the first round, and two applications were selected in the second round. Habitat for Humanity, future homeowners, and volunteers will work on the first four homes first, and a third round to select applicants for the final two homes will be open later, after the construction is underway. That way applicants won't have a long wait between selection and home completion. It also gives applicants more time to prepare applications and related requirements such as reducing debt-to-income ratios and getting issues corrected on credit reports. The first preference category of 80540 residents displaced from their homes as a result of the 2013 flood still has priority in the third round.
First preference for the new homes is for applicants displaced from their homes as a result of the flood disaster of 2013, who maintained their primary residence in the Lyons area (80540 zip code) at the time of the flood. If all six homes can't be filled with homeowners in the first preference category, the second and third preferences are for applicants from surrounding areas who were displaced by the 2013 flood, and those with ties to the Lyons 80540 area, such as current local residents, families of Lyons students, and area employees. So far, applicants selected for the first four homes are all in the first preference category.
Habitat for Humanity is a non-profit that acts as a builder and a lender of no-interest loans for homeowners. For income level requirements in Lyons, preference is for applicants at 60% of area median income or below, but households that earn as much as 80% of the area median income can also be included. Although the median income of an area (Boulder County, in our case) changes every year, you can get an idea by going to the Boulder County Area Median Income Table at www.leaflyons.org/resources.html. For example, the area median income for a household of two people is about $75,900, so 60% is $45,540, and 80% is $60,720. Area median income is measured by family/household size.
In addition to agreeing to partner with Habitat to put in volunteer hours on construction of their home and their neighbors’ homes, applicants must meet other requirements for mortgages. For example, they must have a debt-to-income ratio of 43% or lower (more flexible than what traditional lenders require) and have credit reports that meet specific requirements. As with any mortgage application, the most common challenges to qualifying are related to debt-to-income ratio and credit reports. St. Vrain Habitat mortgages are usually about $150,000, and have no interest. Monthly mortgage payments, including escrow, are set at 27% of the household gross monthly income.
Several different parties owned the land at Second and Park in the past two years. On November 17, 2016, Habitat for Humanity of the St. Vrain Valley bought the six residential lots from Craig Ferguson and his LLC partners. In June 2015, Craig Ferguson purchased the entire 0.76-acre commercial parcel from Valley Bank. Later that month, the Lyons trustees voted unanimously to waive water and sewer connection fees that they have control over for Habitat for Humanity, which was planning to buy residential parcels after the land was subdivided and rezoned. The total of about $173,500 in savings from the Town of Lyons will help Habitat for Humanity meet its permitting and fees budget, keeping mortgages down to about $150,000 for homeowners. In July 2016, the Lyons trustees unanimously approved final rezoning and subdivision steps. After the plat was recorded with the county in the fall, and Ferguson and his LLC partners kept the former bank building (on a PUD/commercial lot) and sold the six lots for three duplexes to Habitat for Humanity of the St. Vrain Valley. Habitat for Humanity agreed to complete the required subdivision improvements for the residential lots.
You can read more about the Habitat for Humanity application process at lyonscoloradonews.wordpress.com/2016/12/23/steps-for-potential-habitat-for-humanity-homeowners-2 and www.stvrainhabitat.org/lyons. Applicants from the earlier rounds whose applications weren’t accepted can meet with Habitat staff to discuss needed steps to take for the third round.