Eagle County’s down payment program poised for record year
June 17, 2018
EAGLE — Jake and Brianna Reynolds grew up in Eagle County, but they weren't sure they would ever be local homeowners.
However, thanks to the Eagle County Housing Down Payment assistance program, two weeks ago when the Reynolds welcomed their first child they brought a baby home to a place they own instead of rent.
"A lot of people don't know what it takes to buy a house. They don't teach you that in school," Jake Reynolds said. "A lot of people are missing out on the programs out there, especially in this tough market."
The Eagle County Down Payment Assistance Program was launched in 1998, and today it has more than $1.8 million in outstanding loans that have helped people who live and work in the county purchase homes.
"We are on pace for a record year for loan funding," said Tori Franks, real estate and development manager for the Eagle County Housing Department.
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The down payment program is a self-funding program that loans participants up to $15,000 to be used for down payments.
Program participants are required to contribute half the amount of their loan — for example if they are requesting a $10,000 loan, they need to have $5,000 of their own money to put down on a home.
Once a participant has closed on a property, he or she has two years to repay the down payment loan with no interest.
If the principal loan amount is not repaid within 24 months, then the recipient has up to 15 years to repay the principal amount plus a pro-rated portion of the property's appreciation.
"When someone pays off a down payment assistance loan the money goes back into the bank and we can lend it out again," Franks said.
The funding can be applied toward the purchase of deed restricted or free market homes.
"It's really a very flexible tool," Franks said.
Getting over the hump
Franks noted that because rental costs are high in Eagle County, many potential homeowners can afford a mortgage payment but they just don't have enough cash on hand for a down payment.
"We have found the $15,000 amount is a good, solid amount. It gets people over the hump," she said. "Usually our buyers are in the game already."
That was certainly the case with the Reynolds family.
Jake Reynolds is employed at United Rentals in Eagle and Brianna Reynolds works for Slifer Smith & Frampton Real Estate. They had been renting for some time and had been keeping tabs on available properties downvalley. They were paying $1,250 a month to rent a one-bedroom unit and figured they could pay a higher monthly mortgage amount. The sticking point was finding the down payment cash.
"It all comes down to having some kind of capital north of $10,000," Jake Reynolds said.
When a deed-restricted, two-bedroom/two-bathroom unit in Eagle came on the market, one of the brokers Brianna Reynolds works with encouraged the couple to check it out. The Reynolds family were one of five potential buyers for the unit.
The Reynolds family worked with a local mortgage broker —Guaranteed Rate Mortgage — to find a loan. "Every step of the way, they were on top of it," Jake Reynolds said. "Being first-time home buyers, we had no idea what we were doing."
The Reynolds are paying more on their mortgage than they did in rent — $1,800 per month plus a $300 homeowner's association fee. But while they are paying more, they are also building up home equity. Franks noted that many buyers end up refinancing their homes and taking out equity in cash to pay off their down payment loans.
Because they are new to home ownership, and new to parenthood, the Reynolds family haven't yet decided how they will pay back their down payment loan.
"Our plan, right now, is to hang out and just enjoy our new place," Jake Reynolds said.