Falmouth Group Looks To Introduce Two New Housing Assistance Programs
The Falmouth Affordable Housing Committee voted last week to ask the select board to consider implementing two programs that would promote affordable housing in town.
Attorney Laura Moynihan and committee clerk Jordan Frye presented two programs for the board’s consideration: a down payment and closing costs program and a buy-down program called HOPP, an acronym for Housing Opportunity Purchase Program.
The down payment and closing costs assistance program, Ms. Moynihan said, would be available to households earning up to 120 percent of area median income and would be a second mortgage type of loan, interest-free, of up to $30,000, or 5 percent of the value of the home. The idea behind it is to assist the resident workforce with covering the closing and down payment fees associated with buying a home.
“It is not a subsidized housing inventory type of program,” Ms. Moynihan said. “The buyers would be eligible to buy market-rate homes.”
As an example, Ms. Moynihan said she has spoken with Addie Drolette, a senior residential loan officer at Martha’s Vineyard Bank who currently works with local employers that offer these kinds of second mortgage incentive programs to workers.
“The employees are coming into the community, Martha’s Vineyard [Bank] is issuing the first mortgage, and the employer is giving money as well, which is secured by a second mortgage,” Ms. Moynihan said. “That’s sort of the overview of the plan.”
The program will be applicable for affordable housing homes and market-rate homes. In a phone call with the Enterprise, Ms. Frye said that people are often paying rent that is equivalent to the cost of a mortgage but are incapable of buying their own home because they do not have $25,000 for a down payment or to cover closing fees.
“This is for those people,” she said. “We felt really strongly about going to 120 percent of area median income because as the market becomes crazier and more unattainable, more and more people are being left out of it. It used to be that, for example, people making 100 percent of area median income could buy homes, but now those people are also no longer able to keep up because salaries are not increasing at the rate that the market is.”
The second program, HOPP, would allow eligible applicants to apply for grants of up to $250,000 per home. If a buyer is deemed eligible and is earning up to 80 percent of area median income, the buyer is entered into a lottery to win the grant and, if chosen, would have 120 days to identify a home and use the grant to purchase the home at market rate. Homes would also be added to Falmouth’s Subsidized Housing Inventory, or SHI.
“The question is: Why [do] a HOPP in the current real estate market if we have a difficult situation for first-time homebuyers already? We had said we all know we’re in an affordable housing crisis,” Ms. Moynihan said. “Solving that crisis, there’s not one save-all cure. It needs to be addressed, in our opinion, from different avenues. Some that are innovative, some that are trial programs like this. Any new program is worth doing.”
The HOPP program, she explained, is a more immediate solution to adding homes to the SHI than building them—within just a few months, more homes would be on the SHI, as opposed to a year or more.
“The grant is less cost to the town than building a new home, which would be about $400,000 is what we’re being told now,” Ms. Moynihan said. “[There is] less environmental impact in utilizing existing structures than creating new ones and density is mitigated.”
A common theme she said she has seen are private sales within families, such as children purchasing parents’ homes. With the HOPP program, it would be easier to avoid the volatile real estate market and arrange private sales.
The more advertising for a program like HOPP, the better, Ms. Moynihan said.
“The more people in the community are aware of it, the more it can be utilized for transactions outside of the typical ‘It’s on the MLS, let’s go to an open house,’” she said. “It can be more in-house because the home itself isn’t part of the lottery. The home can be anybody’s home, it’s the grant that’s the lottery.”
Mary Waygan, housing coordinator for the Town of Yarmouth, was present at the meeting to speak about similar programs that are ongoing there. In Yarmouth, the lottery process involved with its version of a HOPP program is contracted out to a lottery agent, who gets paid to handle the entire process. Ms. Waygan said that allows her to spend her time on other initiatives.
“I think that what Laura said and what Jordan and Laura had put together was perfect,” she said. “I think you’re on the road to success.”
Committee member Wayne Lingafelter asked why the number $250,000 was chosen, to which Ms. Moynihan said it was actually recommended by Gael Kelleher at Housing Assistance Corporation, who said the grant would not be worth doing unless it was big because of the nature of the market.
Mr. Lingafelter pointed out that the Falmouth Affordable Housing Fund currently offers grants of $100,000, and the HOPP program is using 2½ times that, which he said is a significant difference.
“That’s a very good point that you’ve made and it’s one I expect will come up,” Ms. Moynihan said. “I think it goes to the basic premise of what responsibility is the town taking to produce affordable housing versus the current situation where—well, no offense to anybody—but the town is essentially relying on other developers to provide affordable housing. The town’s relying on nonprofit and for-profit developers to meet the obligation to build affordable housing and then fund some of it with the $100,000 or the $65,000. What we’re suggesting in this program is what you’re saying; that we’re saying as a town, we need to take responsibility for getting more units on the SHI, getting more workforce people in, and that’s a municipal obligation. So that’s why the grant is so large: we, as a town, are going to bat on it and saying we’re going to assume that obligation, we’re not going to rely on private developers and nonprofit developers to do it alone. We’re going to do it ourselves.”
The current housing production plan is in effect until December 2023, at which point it will be renewed through the Massachusetts Department of Housing and Community Development. Introducing these programs now, Ms. Moynihan said, felt like a step in the right direction.
“The real estate market can change, as we all know, over time,” she said. “It might take a while, it might take a year or more to get this program approved by the select board, by DHCH, which would have to approve it to get it on the SHI. Things can change and maybe the future will be brighter for first-time homebuyers.”
She made a suggestion that the select board, in administrating the trust fund, would be able to decide how much to allocate to the HOPP program each year. For the first year, a suggestion was made that three grants be allocated as a trial program, with a lottery between January and March.
“Maybe it’ll be a great success and we’d have three winners and we’d have three homes on the SHI; maybe we’d only have one,” Ms. Moynihan said. “The point is, each year the town can assess the success of the program and the results from the prior year and maybe the next year they might say ‘You know what, we’re only going to give out one HOPP grant this year because last year we didn’t really have applicants, or this happened or that happened.’ Or maybe they might say it was a raging success, we had many, many applicants, and we’re going to allocate four grants this year. There’s flexibility, I think, in that process and there can be a controlled timing on it such that if the grant money is not utilized it can go back into the general affordable housing fund.”
The committee voted unanimously to ask the select board to consider both programs for implementation in Falmouth.