Program to update homes in Mineral

A program under the U.S. Department of Housing and Urban Development could help residents in Mineral County become homeowners.

Jim Morten, from Human Resources and Development Council, spoke with commissioners earlier this month about an opportunity which would allow locals to possibly buy a home. Under the program, funds were allocated to the state to assist counties where there are a certain number of foreclosed properties. Mineral County was one of the county’s with a higher foreclosure rate.

The county could receive up to $1.6 million from the program. From there, the council would then administer the project, which they would start by looking at and purchasing homes from lenders that are foreclosed properties.

“We would then take these properties, get the homes up to standards and get them ready to sell to low-to-moderate income people,” Morten said. “The idea is not to let these places continue to sit on the market vacant.”

Morten said that in turn, they could come in with the extra money people need who maybe can’t get quite enough from the bank. He said that their assistance would be in the form of a low interest loan that would make up the difference between the sales price and what they could already acquire.

“So we would take a lien out on the property,” Morten said.

Morten said that what often happens is that properties will become rentals and while that’s not bad, the program is interested in putting homeowners into the homes. He said that usually once they have the money, they start talking with those who hold the foreclosed properties and start negotiating. Once a house is acquired, they go and take a look at everything that needs to be fixed or replaced.

Tending to areas that need repair is important, Morten addressed, because often times the families who go into the house have tight budgets and when a roof needs replaced they can’t afford to replace it.

“Fifty dollars seems like a small amount of money to have to fix something, but it’s making a big difference,” Morten said.

Morten said that the competition for the funds would be intense. If the county received a larger amount of money, Morten said that they’d be looking at nine units. Depending on how much money they receive, if any, it could be only a few.

Commissioner Duane Simons brought up whether or not local help would be used to help refurbish the homes. Morten said that he can’t guarantee it would be local as it is taxpayer’s money funding the grant and someone in Kalispell should not be disadvantaged from getting the job. However, he did say that with only one unit being worked on at a time, it only seemed feasible that local contractors would receive the majority of the work.

Commissioner Roman Zylawy wondered about the success rate of the program and Morten said that typically two to three percent of people default on the loans. He said they’ve been administering the first time homebuyer program since 1996, which is where the funds used to make up the difference come from.

The commissioner’s agreed that it sounded like a worthy grant to apply for and Morten said that he would go ahead and have the grant process started.

Outside of the grant that would allow the council to purchase and refurbish foreclosed homes, two other projects in Mineral County are also planned to wrap up this year.

In St. Regis, six units, selling for $88,000 a piece, are being put in. The Human Resource Council is the lender again and Morten said that it’s a great opportunity for people on the low income spectrum. He said that the last three should be in by April.

“We’re lending to people who have no credit, but have a solid history of paying their bills on time,” Morten said.

In Superior, construction on the apartment buildings has been rapidly coming along after the lot was vacant last winter and summer. The project is a bit different as these aren’t going to be subsidized living apartments.

The 4.9 million dollar project is being handled by a private sector investment. Morten said that they had a hard time finding someone who was willing to invest that type of money into a smaller area.

“It is a volatile market because people are moving out so no one is there to rent,” he said. “We had a tough time finding a group of investors who understand the role of these projects in small communities.”

Due to the caliber of the project, the fact that the council only has a small ownership in the project and other requirements, the council was not the managers of the project and therefore had very little say. All of this is part of the reason why no local help was hired on, but he commended the commissioners for bringing it up, as other areas are also bringing up similar facts for other projects.

Morten said that he expects this project to be completed by August.