City's affordable-home programs facing price increase

January 19, 2012 8:55 PM

BY LYXAN TOLEDANES

Affordable homes in Odessa might be looking less than affordable for some Odessa residents looking to get help from the City of Odessa’s home buyer programs.

Community Development Director Merita Sandoval said she will request the Odessa City Council to increase the price limit costs of qualified existing homes in the city’s HOME of Your Own program to an $85,000 limit and the cost of new homes in its Homebuyer Assistance Program to a $95,000 limit.

Current price limits are $80,000 for existing homes and $90,000 for new homes. The last price increase was in June 2008.

Sandoval told city council members during a briefing at last week’s council meeting that the sales price increase was due to the rising costs of construction and infrastructure.

Odessa Affordable Housing Executive Director Jill Miller said Odessa Affordable Housing, or OAH, requested the price cap increase in part due to contractors raising their employees’ wages to compete with the growth of the oil industry.

“Materials themselves have gone up, but labor costs have definitely increased, because people can go in the oilfield and make more money,” Miller said. “We don’t have the funds to lose money. We don’t make any money on our houses.”

Miller said the cost per square footage has also increased, with for-profit builders charging around $110 per square foot. In a standard 1,200 square foot home, Miller said OAH ideally builds at $80 per square foot.

“Our costs have just come in higher, and we don’t see them going down in the future with the economy in Odessa,” Miller said.

But as the price cap on homes on the home buyer programs increases, less people will have the income needed to qualify for the program and the homes’ mortgage payments.

“As the price increases, the number of people decreases who can sustain a higher sales price,” Sandoval said. “You’re narrowing the window, because you have to have a certain amount of income to sustain the mortgage. (But) we still have existing homes out there in the lower price range.”

To qualify for HOME of Your Own and the Homebuyer Assistance Program, applicants must be below 80 percent of the area median income for their household and qualify for a mortgage loan through the City of Odessa’s approved lenders.

For a family of four to qualify, their income must be 80 percent of the area median income of $55,700.

The program is designed for people with good credit scores but don’t necessarily have the means to establish savings. On average, Sandoval said around six to seven people are helped each year with buying a home.

Once an applicant qualifies, the programs help them pay anywhere from $2,500 to $20,000 of their down payment and up to $4,000 in closing costs, all dependent on their income, Sandoval said.

And with the help of OAH, Miller said new homeowners can learn to understand their new responsibilities, including credit counseling, mortgage payments and loans. Miller said since OAH began building homes in the mid-1990s, no homes have gone into foreclosure.

“It’s really important people are educated and understand what they’re getting into,” Miller said.

Sandoval said as affordability gets redefined in the Odessa economy, she expects many residents to receive higher wages to afford the price of the homes in the buying programs.

“A lot of the citizens are receiving higher wages. That, in turn, increases the average income for the area and raises the 80 percent of the median income and open that up for people,” Sandoval said. “There are always challenges in affordable housing. Our main objective is to provide affordable housing, and that’s what we’ll continue to do.”