Vail homebuyer assistance idea gets council go-ahead
Still a lot of questions to answer before moving forward with any new plan
Cash is king in the current real estate market. That means many traditional practices don’t work any more.
That’s been the case with the Vail InDEED program, which provides some funding for home purchases in exchange for deed-restricting those units.
In today’s cash environment, even those who are prequalified for a mortgage often need weeks to close deals that all-cash buyers can swing in a matter of days.
That’s why Vail’s housing officials have asked the Town Council for permission to create a homebuyer assistance program that would essentially put the town in the position of cash purchasing units, deed-restricting them, then re-selling those units to interested buyers who obtain traditional mortgage financing.
During a Tuesday presentation, council members had a number of questions for Vail Housing Director George Ruther, but ultimately supported the idea.
Support Local Journalism
Council members asked whether a buyer assistance program could be mostly self-funding. Ruther said money used for home purchases would largely be returned, with the exception of closing costs. The Vail InDEED program would reimburse the purchase fund for the cost of deed restrictions.
Plenty of questions
While many cash deals in Vail come without the need for appraisals or inspections, and often close for more than the original asking price, Ruther said there would have to be some sort of appraisal mechanism built into the new system. Under the draft proposal, the Vail Local Housing Authority would determine how far above an asking price a town purchase could go.
Council member Pete Seibert, a real estate agent, asked about the prospect of getting into bidding wars with other buyers.
“We need to be cautious,” Ruther said. “This shouldn’t become an opportunity just to run up the price, then walk away from the deal.”
While the town works to put together an assistance program, Eagle County has a homebuyer assistance program ready to launch in the spring. That program is part of the Eagle County’s $5.4 million “Bold Housing Moves” program, which launched in 2021.
Eagle County Housing Director Kim Bell Williams said the program will have about $2.5 million at launch, enough to purchase and resell up to 12 units per year across Eagle County.
Williams said roughly two dozen people have expressed interest in the program, adding she expects the program to be “very popular.”
In Vail, Ruther said there are “three or four” Vail InDEED participants willing to be test subjects for a buyer assistance program. Ruther said a program in Vail could complete perhaps as many as eight or 10 sales per year.
They aren’t all cash deals
While Vail’s InDEED program is short-circuited by the current market, Bell Williams said the county’s similar program, Good Deeds, is seeing some successes. That program, launched in October, 2021, has had seven deals close, Bell Williams said.
While all-cash deals are growing in popularity, Bell Williams said the traditional sales model is still working in other areas of Eagle County, adding there’s a “robust” waiting list for the county’s deed-restricted homes at Freedom Park.
New and recent programs have resulted in a lot of communication between local governments, Bell Williams added. The county’s existing Valley Home Store, a clearinghouse for workforce housing, now has agreements with Avon, Vail, Minturn and Eagle. The county’s housing office has also started a property management service.
In Vail, Ruther told council members to expect an assistance program proposal in the next several weeks.
While the council expressed support for such a program, “there are a lot of details to work out,” Mayor Kim Langmaid said.
$2 million: Amount requested for a Vail homebuyer assistance program.
$2.5 million: Current amount in the Vail InDeed deed restriction program.
$2.5 million: Initial funding for Eagle County’s homebuyer assistance program.