Vail Town Council agrees to boost program to allow town employees to buy homes | VailDaily.com

Vail Town Council agrees to boost program to allow town employees to buy homes

Program helps employees come up with down payments for homes in and outside of Vail

The Vail Chamonix townhomes, shown here in the last phases of construction in late 2017, were built because the town of Vail had strong reserve funds.
Chris Dillmann | cdillmann@vaildaily.com
How it works The Vail Employee Home Ownership Program is an “equity share mortgage loan.” Those loans don’t accrue interest and no payments are required for the term of the loan. When the loan is repaid, the repayment is a share of the appreciation on the home in addition to the principal.

VAIL — As local real estate appreciates, a town program to help employees buy home needs to keep pace with the local real estate market.

Over just more than a decade, the Vail Employee Home Ownership Program has helped 44 town employees buy homes. But the program’s limits are now too low to provide significant assistance.

Vail Human Resources Director Krista Miller on Tuesday asked the Vail Town Council for additional money for the program, as well as new limits on how much employees can request.

The program began in 2008. Employees who want to buy homes in Vail are eligible to receive a loan for up to $80,000 for homes in Vail, and up to $40,000 to buy homes within a 50-mile drive.

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Miller recommended increasing those limits to $120,000 in Vail and $75,000 outside of town. She also recommended adding a right of first refusal in case of default or sale.

While $80,000 in assistance seems significant, Miller said the town hasn’t used any program money in Vail for a few years.

The problem, she said, is that even a small unit in Vail might sell for between $500,000 and $600,000. At $500,000, it takes $100,000 to make a 20% down payment — the minimum to eliminate private mortgage insurance. If a buyer brings the required 5% to the deal — $25,000 on a $500,000 deal — the town’s help puts that buyer just over a 20% down payment.

In the case of a $400,000 home in Eagle, the town’s loan contribution plus the buyer’s 5% is also below the level needed to eliminate mortgage insurance.

Miller noted that private mortgage insurance can add hundreds of dollars per month to a mortgage payment. That potentially pushes a home outside what a person or family can pay.

Councilman Travis Coggin said he doesn’t see how even boosting the loan amount to $120,000 would have much impact in Vail.

Council members agreed to boost the fund by $350,000 in the March supplemental budget, and agreed to look in the future at more ways to expand the program and, possibly, add an element to increase the number of deed restrictions the program could create.

Vail Daily Business Editor Scott Miller can be reached at smiller@vaildaily.com or 970-748-2930.


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