Loan scrutiny slows closings of Eagle County affordable homes
Eagle County, CO Colorado
EAGLE COUNTY, Colorado ” Stratton Flats, afforable homes for Eagle County workers in Gypsum, Colorado, planned to have its first closing on a home last week, but the date got pushed back. Then it got pushed back again.
“In this environment, it’s a lot harder to get a loan,” said Andy Forstl, sales manager for Stratton Flats. “Lenders are going by the book and checking everything twice.”
The first homes started popping up at the Gypsum affordable housing development in October and a bunch are now ready to be lived in. But with the country in the midst of a credit crisis and a recession, lenders are taking longer to approve loans, particular for first-time homebuyers, said Forstl.
It used to take about 30 days to get a loan from the time the process was started, Forstl said. Now it takes about 45 to 60 days, he said.
“Lending has changed dramatically in the last two years,” Forstl said.
About 10 homes are under contract at Stratton Flats ” the county’s newest workforce housing neighborhood ” and about another 20 have been reserved.
The development is a partnership between the town of Gypsum, Meritage Development and Eagle County, which invested $4.5 million in the project. The finished product will be a mix of 339 deed-restricted and free market condos, townhomes and single-family homes.
A third of the homes will be under the county’s deed-restriction, which has appreciation caps and residential requirements, a third will be under the town of Gypsum’s, which don’t have appreciation caps, but have residential and income requirements. The rest will be free market.
The first closing on a home at Stratton Flats should be sometime in February, Forstl said. And the second, third and fourth closings should be close behind, he said.
Local home loan consultant Cris Nolan has seen lending become more difficult.
“Not only are things being scrutinized more, there is a lot more narrower focus on what’s acceptable,” said Nolan of MegaStar Financial in Edwards. “Loans are getting declined more now than they have in the last several years.”
The lending industry is also busier because homeowners are taking advantage of cheap mortgage rates and refinancing their mortgages, Nolan said.
“Rates have dropped, so there is a lot of refinancing going on,” Nolan said.
“They’re getting swamped,” said Forstl, who referred to the amount of people refinancing as a boom. “We saw down to four and a half percent.”
Despite the loan process taking longer, there is still money out there, Nolan said.
“Loans are closing,” she said. “It just takes patience and more hard work.”
And the extra scrutiny isn’t necessarily a bad thing, Forstl said.
“The last thing we want is to have any foreclosures here,” he said. “The people who can afford them are getting them. It’s not just a slam dunk like it used to be, any new project is going to face the same problem.”
Staff Writer Chris Outcalt can be reached at 970-748-2931 or email@example.com.