Valley agencies helping low-income families become homeowners

Affordable housing in Arizona
Posted at 6:14 PM, Mar 23, 2021
and last updated 2021-03-23 21:25:46-04

Discussions about creating affordable housing options for lower income Arizonans often revolve around building rental units, but advocates say finding ways for low-wage earners to own their homes can benefit their families for generations.

ABC15 spoke to three non-profits that sell homes, provide financial assistance, and housing counseling to lower-income households.

Habitat for Humanity of Central Arizona is one of the only programs that open homeownership to the lowest earning residents.

CEO Jason Barlow told ABC15 it can do that largely because the entire process is handled in house.

“We're not only the builder of the home, we're the mortgage originator with the bank, and so we can control their payments from 20 to 40 years to stretch that payment out,” Barlow said. “Another key part is we design the mortgage so that they don't spend any more than 30% of their gross monthly income on their mortgage payment.”

He said Habitat homes are financed with zero interest loans and the down payment is the time borrowers put into volunteering with the organization.

“There is no down payment other than the 400 hours they put on their own home or other homes somewhere in the network,” he said.

The program has income limits of 30 to 60% of area median income (AMI) for Maricopa and Pinal counties. AMI varies depending on household size but in 2020 for a family of five it was about $78,750. Find out more about how to apply here.

Trellis is a non-profit developer that also provides housing counseling and finds financing for workforce housing ownership. Workforce housing is loosely defined as households that are employed and earning 80 to 120% of area median income.

“It's all about being intentional and providing a product that's going to be attainable for low- and moderate-income people,” said CEO Patricia Garcia Duarte.

One of the projects under construction is Trellis at Colter, located near Interstate 17 and Camelback Road. Market rate for townhouses in the 20-unit community start around $289,000 but that amount is too expensive for Trellis buyers.

“The magic is in that down payment and closing cost assistance,” Garcia Duarte said.

To make the homes affordable she said they find grants, low costs loan, and other subsidies that make up the difference between the market rate cost of the house and how much has been approved to borrow for a mortgage.

“It can be as low as $15,000 up to $90,000. It just depends on where the market is,” she said.

Newtown Community Development Corporation (NCDC) renovates and builds homes for a range of lower income brackets. Executive Director Stephanie Brewer said much of their funding is specific to financing homes for households making less than 80% AMI or $67,250 for a family of five.

“They are people who have full time jobs or have multiple jobs, to create a full-time atmosphere,” Brewer said. “They qualify for a mortgage, but there's nothing that's available in the price range that they can afford.”

For several years NCDC has renovated and built apartments and single-family homes around the Valley but its latest construction project is a 13-tiny home community called Tempe Micro Estates in Tempe.

“If we're going to produce more affordable housing units, and we're going to be able to produce a volume of housing units for homeownership, we're going to have to look at some other options, besides just single-family stick built house,” Brewer told ABC15.

Regardless of the size of the house, NCDC is able to adjust the price of the homes to make them affordable to buyers through donations and federal, city and private subsidies. Brewer said they also help families maintain the homes for the duration of ownership.

“We're the developer that never goes away. We stay with the homeowner through the whole process. And we make sure that they're that they are being healthy and successful homeowners,” Brewer said.

NCDC’s goal is to keep the homes affordable so they hold them in a community trust and have the first right of refusal if the owner decides to sell and she said they always buy the houses back with a profit for the homeowner.

“It will always come back to us because we want to be the responsible entity for making sure that the next homeowner is qualified and the right homeowner for that project,” she said.