HOISINGTON -- The Hoisington Land Bank Board met Monday evening at 6:30 p.m. prior to the city council meeting where they heard a proposal by Housing Opportunities Inc. to partner in seeking a grant from the Kansas Housing Resources Corporation to encourage building median income housing.
“It’s hard to get developers to step up and do a bid if there isn’t someone already pledged to purchase the finished project,” Vickie Dayton, HOI executive director said. “This is what prompted the state to set aside money for moderate income housing.”
In 2015, HOI partnered with the City of Great Bend for the grant, and broke ground on the first house in June. They plan to supply grants of $25,000 for each of seven houses within the next two years, she said.
City Manager Jonathan Mitchell expressed his excitement over the program.
“When I heard about Great Bend was approved for these grants last year, I thought to myself how I wished Hoisington could get this,” he said.
Dayton asked the council to consider a proposal for $100,000 in grant funding, providing four lots in the McKenna Meadows subdivision. The Land Bank is offering lots there for free to individuals who agree to build a home to specific covenants and reside there for 10 years.
The new homes HOI plans to build will be valued at $175,000, but thanks to the grant, applicants will receive $25,000 through the partnership, to be applied to the down payment. Lenders typically require 20 percent down. On a $175,000 home, that would be $35,000. With the $25,000 grant, applicants would need to have $10,000.
The homes being built in Great Bend are slightly smaller than the covenants allow. That, Dayton said, would not be an obstacle because the specs can be altered to fit. They will feature an open floor plan, with three bedrooms, two bathrooms, a two-car attached garage, full unfinished basement and the capacity for two additional bedrooms and one bathroom plumbed in the basement.
Council members inquired what median income guidelines were for the grant. Typically, Dayton said, the families that apply for the grant have three to four people. The grant is available for families sized from one to eight people. For a family of three, annual earnings can be as high as $90,000, and for a family of four, they can be up to $100,031. Dayton also noted that if an applicant is close, often times a case can be made for approval.
She also stressed that applicants must be able to qualify for a mortgage for the purchase price of the home, less the grant and their savings.
“The biggest obstacles tend to be either the applicant doesn’t make enough to qualify, or their credit scores aren’t high enough,” she said. “If it were to take more than two years to approve four applicants, HOI would continue working as long as the city wished to get the lots filled.”
Council member Travis Sinn asked City Manager Jonathan Mitchell if there were any other serious applicants for the lots. Mitchell responded that while there were several inquiries earlier in the year, only one applicant had been approved and their home is in the construction phase. Other applicants have stopped communicating with the city.
During discussion, Council member Carol stated that the Land Bank Board had already determined the demand is definitely there. The rest of the council agreed and gave their approval for the partnership.
The application deadline for the grant is Oct. 14. Dayton said HOI should be notified in March or April the results of the application. She added that the fact Hoisington had not applied previously gave the partnership an edge.