Success Story: Southeastern
Vermont
An affordable solution
to homeownership in an expensive market.
 |
Mission
Possible
Anne Collins, a life-long renter, came to
the NeighborWorks HomeOwnership Center of Southeastern
Vermont with a dream of owning a home. With her low income
that dream seemed impossible. Her first step was enrolling
in the Center’s Realizing the American Dream Homebuyer
workshop in October 2004. Through this 8-hour workshop she
learned about the basics of buying a home including determining
a realistic price range; how to manage money and credit; and
how to put together a team of real estate professionals to
assist her throughout the process of buying a home. Most importantly
she learned about programs that provide affordable solutions
to many first-time homebuyers struggling to buy a home in Vermont’s
expensive real estate market; including Vermont Housing Finance
Agency (VHFA) and U.S. Department of Agriculture Rural Development
mortgage products and the Homeland Grant program.
After she took the class, Anne sat down with
Tina Johndrow, a certified housing counselor, to review her
credit report, determine a realistic price range, and put together
a personalized home-buying plan.
Overcoming the Obstacles
Anne’s biggest obstacle was that her income and savings
limited her purchase price range to well below the prevailing
prices for the houses in the Rockingham region. Tina suggested
that Anne consider a very-low interest mortgage through USDA
Rural Development combined with an acquisition grant from the
Homeland Shared-Equity program from the Vermont Housing and
Conservation Trust Fund. This boosted her price range so that
she could afford a home if she shopped carefully.
Over the winter of 2005, Tina worked with Anne
to meet Rural Development’s mortgage requirements as
quickly as possible. In the summer of 2005, Anne shopped for
a home that was in her price range and met other conditions
she had identified ahead of time including little to no lawn
to maintain. It took some time for Anne to find the right home
but she persevered and eventually found a likely prospect.
Homeland
Shared-
Equity Program
The Homeland program
is supported by Vermont Housing and Conservation
Board and provides grants of up to $25,000 to
income eligible buyers. The grant acts as a down-payment
and lowers the purchase price to the buyer. In
exchange for the grant, the purchaser agrees
to limit the amount of equity taken at the time
of resale. The recipient of a Homeland
grant agrees that at the time of a resale they
will recover what they actually paid for their
house, the value of any capital improvements,
and 25% of any increase in the market value of
the home |
|
Making Heads and Tails of Negotiating
the Purchase
In July 2005, Anne found a house. The next challenge was negotiating
the purchase, which involved determining a price to offer,
developing a repair plan, finalizing the grant, and finalizing
the mortgage application. The HomeOwnership Center was right
there to help Anne through those steps. Being a wise homebuyer
Anne ordered a house inspection soon after she had signed a
Purchase and Sale contract with the seller. As is common, this
inspection showed that the house needed repairs in order to
qualify for the mortgage and the grant. Tina facilitated the
negotiations between Anne, the seller, and the loan officer.
Tina also assisted Anne with developing a monthly spending
plan that insured she could meet the responsibilities of homeownership
including taxes, insurance and maintenance.
|
