Affordable Apartments & Down Payment Aid: The New Destination for Pandemic Funds!
Last spring, state lawmakers demonstrated their commitment to tackling Nevada’s burgeoning housing crisis. They earmarked an impressive $250 million from the federal American Rescue Plan (ARP) for the sole purpose of nurturing and preserving affordable housing. Their goal? To provide some relief against the backdrop of soaring housing costs that Nevada residents were grappling with – costs that had shot up to an all-time high.
Fast forward to a recent meeting of the Interim Finance Committee, and there’s a positive update on the horizon. The Nevada Housing Division reported that they’ve already put 46% of the initially allocated Home Means Nevada grant funds to good use. This is a significant uptick from the 26% that had been assigned just a month prior. The Division is on a tight schedule, with a deadline to allocate all funds by 2025.
Steve Aichroth, the dedicated Administrator for the Nevada Housing Division, expressed his enthusiasm during the IFC discussion. “In just over four weeks, we’ve managed to commit an additional 20%. We’re making impressive progress in this endeavor,” he noted.
Delving deeper into the fund allocation, almost a third of this considerable sum was awarded to four major entities. These are the Reno Housing Authority, the Southern Nevada Regional Housing Authority, Ovation Development, and Nevada HAND. While Ovation Development, spearheaded by developer Alan Molasky, handles both affordable and premium housing projects, it functions primarily as a general contractor rooted in Las Vegas. Meanwhile, Nevada HAND stands out as the state’s most prolific nonprofit developer.
Aichroth shed more light on this allocation, stating, “This commitment of $160 million translates to 32% of the total grant. We’re not breaking new ground here; these entities have been our long-time allies. We collaborate with them almost daily to make affordable housing a reality in Nevada.”
Another crucial aspect to note is that many affordable housing initiatives rely heavily on bond funding. Thankfully, the Nevada Housing Division has set aside resources specifically for this purpose.
Beyond the immediate housing projects, a significant chunk of the Home Means Nevada funds is targeted at homeownership schemes. This especially caters to first-time homebuyers and those eager to secure homes in Nevada’s picturesque rural communities.
In a commendable move, the housing division has allocated a hefty $7.5 million toward down payment assistance. This translates to potential $15,000 grants for qualifying homebuyers within the state.
Aichroth provided some insightful statistics for context. “On average, a Nevada household comprises three members. They typically target homes priced at $297,000, with a household income of around $64,000. Considering today’s rates, a 30-year mortgage of $279,985 comes out to roughly $1,886 monthly. However, this doesn’t factor in other associated costs like taxes, insurance, or homeowners association dues.”
Highlighting the practicality of this scheme, Aichroth emphasized that if residents can qualify for such a mortgage payment, it’s comparable to many current rent prices.
To provide a clearer picture, an average two-bedroom apartment in Reno is priced at $1,650 monthly, as per zumper.com’s data. In contrast, the same apartment in Las Vegas would set a resident back by $1,495 each month.
However, it’s not all smooth sailing. Recent data from ATTOM, a renowned real estate research entity, has painted a grim picture: Nevada currently leads the nation in foreclosure rates.
This alarming statistic prompted Sen. Dina Neal (D-North Las Vegas) to raise concerns about the potential pitfalls of these schemes. She questioned the feasibility of these programs and pondered if recipients of down payment assistance might find themselves drowning in overwhelming housing costs, culminating in foreclosures in the foreseeable future.
Addressing these concerns, Aichroth mentioned that while the state housing division does monitor foreclosures closely, it’s too premature to determine any direct correlations with the program.
Nevertheless, for residents teetering on the brink of foreclosure, assistance is within reach. The Nevada Affordable Housing Assistance Corporation (NAHAC) is poised to assist, having been endowed with $121 million from the Home Means Nevada fund pool. They specialize in offering temporary mortgage payment support for those who’ve faced unemployment or financial strains due to the pandemic’s adverse effects.
Summing up the current scenario, Aichroth added, “To the best of my knowledge, around 30% of the allocated funds have been utilized, and the availability extends till December 2026.”
