Budget cuts threaten housing program
March 15, 2011
Federal budget cuts in 2012 could eliminate a self-help housing program that provided homes last year for about 10 households in Summit County.
With Congress considering the budget, the Obama administration has proposed cutting the U.S. Department of Agriculture’s self-help housing program. In Summit County, the program has resulted in the construction of about 57 homes since 2002.
Six self-help homes are under construction in the county today, said Scott Loomis, executive director of the Mountainlands Community Housing Trust.
Construction could begin on 10 more houses this summer.
"If the 2012 budget gets zeroed out, this next group that we’re going to start in May or June may be our last group," Loomis said in a telephone interview.
Rural residents who qualify for the self-help program must work up to 1,200 hours during construction of the house to qualify for a subsidized loan, he said.
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Kamas resident Becky Cranney said she built a home through the self-help program about two years ago. She lives in the Prairie Junction subdivision.
The subsidy was not a handout, Cranney insisted in a telephone interview Tuesday.
"You work hard for it," Cranney said.
She and volunteers worked on her house each week for about 30 hours.
"The reward is so great, you’ve got a home," Cranney said.
Cranney had recently divorced before entering the Mountainlands self-help program.
"A lot of people in my position, I don’t think I would have ever been able to get a home," she said.
To qualify, buyers need decent credit and must be earning less than 60 percent of the area median income.
"It’s been a real valuable program. They work hard and they get home ownership," Loomis said. "Without self help, their options would be very, very limited, probably impossible for most people."
Loomis recently traveled to Washington, D.C., as a member of the National Rural Housing Coalition. He said he tried to convince members of Utah’s congressional delegation to support funding for the self-help housing program.
The program costs about $35 million to operate for a year and results in about 1,200 homes — about 120 in Utah.
"They have to look at it and say what’s benefiting their state? This program definitely benefits their state," Loomis said. "They see the benefits to Utah with their constituents being able to obtain home ownership and it’s certainly an economic stimulus for the state. In a lot of areas it’s pretty much the only game in town in terms of construction of new homes."
About 22 of the last 26 building permits issued for single-family homes in Kamas were Mountainlands self-help projects, he explained.
"Kamas and Oakley and Coalville and communities like that are definitely rural and there are not a lot of housing opportunities for them," Loomis said.
Financing for self-help mortgages comes from the USDA Rural Development direct loan program. Funding for that program would also drop from $1.1 billion to $211 million under a budget proposed for 2012.
"Locally, these two programs have been very instrumental in affordable housing for our community," Loomis said.
The federal subsidies allow the mortgages to be amortized over longer periods with lower rates, he explained.
"It’s a pretty important program and without it our options for financing are going to be very limited for any kind of affordable housing," Loomis said.
The subsidized loans have been used to finance about 90 of the 129 homes Mountainlands has built in Summit County since 2002.
"They would normally qualify for like a $180,000 mortgage and they can qualify for $260,000 or $270,000 and get a much bigger home," Loomis said.