The biggest obstacle, I am learning, to successfully purchasing a home through this program is the financing piece. The builders and home owners participating on the selling side are knowledgeable and motivated and the buyers stay excited, even while they jump through hoop after hoop, as they stand to get a guaranteed under-market-price for a property in Boulder country.

It’s the lending arena that seems to be out of sync, and I’ve seen three big issues contributing to this funding challenge:

• Deed restrictions - In simple language this means, when you buy a Community Housing approved property for WAY under market, for the next ten years or so you have to agree to resell it for under market. You know, that so someone down the line in the program can enjoy the same great pricing you enjoyed initially. Makes sense. (The program will allow the property to appreciate anywhere from 1-5% per year during that restricted period of ownership - how they calculate that is a whole other blog for another time.) Suffice it to say, banks don’t like this. And only a handful of brokers and lenders will even mess with it.
• Tight credit climate - Banks already don’t like this whole idea, right? And they are changing their lending protocols almost daily! You have to have great credit to even get into this program, but you probably don’t have a whole lot to put down. Afterall you’re on a starter income or you’d make too much money to even qualify. Where are you going to get the down payment that would make the lenders and the mortgage insurance people really happy in this volatile lending market?
• Mortgage insurance - Mortgage insurance, “MI”, is required on loans where less than 20% of the purchase price is put down up front. Let’s do that math. 20% on a $125,000 property is $25k - and that’s before closing costs. If you have that kind of cash you probably don’t need the Community Housing Program. SO, you’re going to need MI, right?  And guess who’s pretty nervous these days with defaulting loans eclipsing every existing foreclosure record known to the modern free world?

On a postive note, there are some great down payment assistance programs out there, and a creative, experienced  mortgage broker or loan officer should be able to help with most sticky MI issues that might crop up.  I still think it’s worth the effort for the right buyer. But buyer please keep the following in mind if you decide to jump into this program:

• Choose a lender who has SUCCESSFULLY navigated these murky waters.
• Utilize a buyer’s agent who can advocate for you to all parties involved in this transaction - the lender, the city, and the seller among others.
• Be ready for delays and complications - there is ALOT to choreograph and coordinate on one of these deals.
• Be patient - it’s not a conspiracy against you. It’s just complicated. 
• And keep smiling - with the right team behind you, you WILL eventually make it to the closing table and have a great property at a great price to show for it!