Housing lotto winners now face tough lending market | PostIndependent.com

Housing lotto winners now face tough lending market

CARBONDALE, Colorado ” As the state lottery motto goes, “You can’t win if you don’t play.” But even for the winners of Monday’s Keator Grove affordable housing lottery, the toughest game to play may yet lie ahead.

“To be able to have our own place will be really exciting,” said Valeria Gonzales, who with her husband Osvaldo were the first ones selected among 40 applicants for the right to buy one of the eight income- and deed-restricted units at Keator Grove. The lottery was organized by Mountain Regional Housing Corp. and the town of Carbondale.

“We’ve been living with a friend, and have been looking for a place of our own since November of last year,” said Gonzales. “It’s really hard to find a place to rent with a dog, and we thought this would be the best answer.”

The Gonzaleses were among 24 “Priority 1” lottery participants picked in the first round. Priority 1 means the applicants meet income qualifications, and already have been living and/or working in Carbondale. The Gonzaleses both work at The Village Smithy restaurant.

“I’m speechless,” said Marie Simonds, who was the sixth person selected in the Keator Grove lottery.

She and her 7-year-old son, Tanner, have been looking for a place to buy in Carbondale for more than a year.

“We were beginning to give up hope,” she said.

But the next challenge will be to secure financing to actually follow through and buy one of the two-bedroom, one-bath condominium units at Keator Grove, which are selling for $218,487 and are targeted to families making 80 percent or less than the area median income.

“I do have approval from my credit union, but I am looking at the risk,” Simonds said. “I am going to need some down-payment assistance.”

Indeed, even for the winners in Monday’s lottery there is still some trepidation as the lending market has tightened significantly due to the national housing crisis caused by the proliferation of risky subprime loans in recent years.

After the lottery winners were announced, local real estate agent Cindy Sadlowski, who works in association with Mountain Regional Housing, announced that one of the funds they were using that provided a 5 percent down-payment option had dried up. That leaves many of the prospective buyers of Keator Grove units, as well as those looking at the upcoming lottery for several affordable housing units at Ironbridge between Carbondale and Glenwood Springs, to consider more costly options.

“It’s tougher to get money; the lending guidelines are tightening all the time,” Sadlowski said.

She recounted a story that, just last week, she had a representative from Wachovia, a national lending institution, who said he thought they could provide loans for deed-restricted units.

“The next day I called him back, and he said he’d just lost his job,” Sadlowski said, emphasizing the impact of the home lending crisis on both a national and local level.

“These institutions were throwing money at first-time homebuyers two years ago,” she said. “Now, anyone who is not as strong financially is going to have a hard time.”

That might be bad news for some of the top applicants selected for the Keator Grove units. But it’s potentially good news for those whose name came up a little later in the lottery.

The top eight applicants selected have the first choice of the available units. If they can’t get financing, however, or if they decide to pass and wait until something else comes along, the lottery administrators move on to the next names on the list in order.

“So, people who are on the wait list, even if they’re number 12 or 13, have a pretty good chance of getting into one of these units,” said Kay Philip, housing planner for the town of Carbondale.

Following the 24 Priority 1 applicants who were chosen, another 11 Priority 2 applicants ” those meeting the income and asset guidelines, but not currently living or working in Carbondale ” were then selected.

An additional four Priority 3 applicants ” those meeting neither the income nor residency requirements ” filled out the final four slots in the lottery.

Meanwhile, the Garfield County Housing Authority is currently taking applications for 20 deed-restricted single-family units at Ironbridge. A lottery for the first 10 of those units is set to take place on Sept. 10.

Applications this year will only be accepted at the GCHA office in Rifle, located at 2128 Railroad Ave.

Applicants can either mail or drop off applications by 4 p.m. on Aug. 29. GCHA will not accept faxed applications, due to the sensitive information on the application.

There will also be a site visit and program orientation on Saturday, Aug. 16, between 10 a.m. and 2 p.m., at Ironbridge, located on County Road 109 between Carbondale and Glenwood.

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