City revives affordable home loan program

BY PRU SOWERS

KONK LIFE STAFF WRITER

Many potential home buyers in Key West have been locked out of the market because they can’t come up with the down payment. But for 10 qualifying, lucky home buyers, a city-financed loan program could help.

Key West City Commissioners voted unanimously Aug. 15 to revive a home-buyers assistance program that will make $20,000 loans to 10 prospective buyers to help them make a down payment on a house. Commissioners also voted to fund the 2017-2018 program with a $200,000 transfer from the Affordable Workforce Housing Trust Fund.

The loan program was first established in 2008 and made ten $20,000 loans in 2009 but was not funded in the next fiscal year. However, the structure of that initial program will remain the same in the revived version. Loan applicants must make at least 70 percent of their income in Key West and they cannot own another house at the time of the loan. The loans will be limited to properties located up to Mile Marker 33.

The program revival was kickstarted by Commissioner Sam Kaufman, who was asked by a Key West Police Officer a few months ago to look into helping residents make the jump to homeownership in an increasingly expensive market.

“We know what the retention problems are in our police department. A lot of it has to do, of course, with the lack of affordable housing,” Kaufman said, adding, “Look what’s going on with teachers in our school district. There’s so much turnover in the school district.”

Even though the program is limited to 10 homebuyers a year, that will add up to 100 families over the next 10 years, Kaufman said.

“One hundred families can make a difference in Key West’s small community,” he said.

Commissioner Margaret Romero wondered why the program applies to houses extending up to Mile Marker 33, asking if that could be pulled back to make the properties closer to Key West. Commissioner Billy Wardlow also questioned the MM 33 boundary.

“The only problem I have is the mile marker, all the way up to Big Pine and the City of Key West is paying for it,” he said, suggesting that Monroe County chip in to fund the loan program since it, not Key West, will benefit from property tax revenue from a property purchased outside of the city limits.

But Kaufman pointed out that requiring that 70 percent of a loan applicant’s income come from a Key West-based employer will focus the program on local workers, even if they live outside of the city.

“The reason why the dwelling units must be in the Lower Keys all the way up to MM 33 is we wanted to make sure there was enough housing stock that would be within the price range for folks to be able to afford,” he added.

Local realtors were, perhaps not surprisingly, pleased with the revival of the program. Will Langley, president of the Key West Association of Realtors, said that between the down payment and up-front insurance payments, the purchaser of a $400,000 home has to pay approximately $22,000 in initial costs. Building equity is better for families than paying rent and homeownership leads to more stable neighborhoods, he said.

“I see first-hand every day local, hard-working, good people struggling for reasonable housing in this town,” he said. “Do we want an island of renters or an island of homeowners?”

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