Mountain Home housing development offers low-cost alternative path to homeownership

As the oft-quoted line in the movie goes, “If you build it, they will come.” One housing development could paraphrase that by saying, “If we build it, will they qualify?”

Falcons Landing Townhomes in Mountain Home, built on a community land trust (CLT) by LEAP Housing, is a community of eight homes that were newly built last summer and went on the market in November. Though there have been plenty of applicants, only one person has qualified and is in the process of closing on the property.

The townhomes, which are three-bedroom, two-bathroom, 1,277-square-foot homes, are listed at $299,000 and come with $100,000 in down payment assistance. Since the buildings are on a CLT, and homebuyers are only purchasing the structure, not the land, it makes buying the home an easier process.

However, not just anyone can buy the homes. There are two income options – or paths – to qualify. Both paths look at a household income and its size. The first path is the down payment assistance plus an FHA loan (a HUD program), whereas the second path is a 502 Direct and subsidy option (a U.S. Department of Agriculture program).

The highest qualifying income level for a one-person household for path one is $43,350 per year. For a two-person household, it’s $49,550 per year. The highest level of income that qualifies under path one is a six-person household at $71,850 per year.

Under the second path, the highest qualifying income level is $61,900 per year for a one- through three-person household and $81,750 per year for a four- through six-person household.

According to LEAP Housing, the homes are designed for households earning below 80% of the area median income, which, according to data from the U.S. Census Bureau was about $58,486 in 2023 for Mountain Home. Households still need to show they earn enough to make monthly payments on a mortgage.

“What I’m seeing is Mountain Home incomes are much, much lower than I expected,” said Shelly Buchanan, homeownership director with LEAP. “In the last five years, the price of homes have increased so much faster than the price of people’s paychecks.

She pointed out that some of the major employers in Mountain Home such as Albertsons and Walmart only pay so much per hour, and that’s often not enough to qualify someone for a home loan. Those two businesses pay between $10 and $14 per hour as a starting wage, depending on the position and department.

“Some big employers just don’t quite pay as much as what is needed to purchase a home, even with the down payment assistance,” Buchanan said. “So, if you were to buy a CBH Home up the street, the cheapest one is probably around $350,000. With market rate today, you’re probably looking at a payment of $2,500 to $2,600 a month. This one being listed at $300,000 with $100,000 in down payment assistance, you’re probably looking at a payment of around $1,600 to $1,700 a month.”

Even that monthly payment of what equates to an average monthly rent these days “is still higher than a lot of people could afford,” she said.

At the moment, Buchanan said she has a wait list of approximately 100 applicants, but unless they fall within the specified income requirements, they won’t qualify.

“You have to make enough to make that payment, but you also need to not make too much to still qualify and be at the 80% area median income and less,” she said.

“It’s a pretty narrow window of what the income needs to be.”

That’s the reason the second path through the USDA was opened up, Buchanan said. It combines a direct loan where borrowers can get subsidized payments. The interest rates on those loans is at about 4.5% currently, whereas regular market rates are at about 6.5%.

“But they can subsidize that interest rate all the way down to 1% based on people’s incomes, then you’re looking at a payment closer to $1,000 a month versus $1,500 to $1,600 a month,” she said.

There are extra requirements for that second path such as sending in documents every two years to show that a household still qualifies. If a buyer has an increase in pay, the interest rate could go up.

If a household does qualify and is approved, the new homeowner also has to put in 60 hours of sweat equity. Since the homes are all built, that work doesn’t mean someone has to drive nails or lay carpet. Instead, it comes in the form of grabbing a brush and putting on a few coats of paint. Seven of the homes are beige at the moment, but once they’re bought, the new owners must put in the work and paint their new domicile white.

Since another eight townhomes that mirror the first eight will be built on the backside of the property at 1339 SW Harrier Avenue, LEAP’s staff is doing whatever they can to educate and spread the word on the opportunity. That includes going into other cities to let people know what’s available.

“I think we’re seeing a lot of people that are weighing their options between, like, the other side of Caldwell and the drive to employment versus [commuting] from Mountain Home,” said Chad Hansen, the CEO and a Realtor for Property People, the company that represents LEAP in the selling of the homes.

The education aspect has become an important part of Hansen’s work, as not everyone understands what it means to purchase a home in a land trust.

“Educating people in the land trust has kind of been the biggest challenge, I think, for anybody inquiring because they have to just get it in their mind that they’re not going to own the land, and then they can’t sell it for a bigger profit,” he said. “I think getting qualified applicants and also educating people as they’re calling has been the biggest hurdle, especially out here because we hosted the realtors and it was clear to me that a lot of them did not understand the land trust.”

The development is part of LEAP’s expansion plans to bring land trusts to regions throughout Idaho. It’s a concept that’s commonly used in other states like Oregon and Washington, Buchanan said.

“I’ve talked to folks who have maybe moved here from there … they totally get [the community land trust concept]. No big deal. It’s really common in other areas,” she said. “In Idaho, it’s new. You know how a condo works. You know 55-and-up communities is another one compared to the concept. Then they kind of get it.”

Hansen said the need for housing and desire for home ownership is obvious. Spreading the word has proven to be the difficult part despite the efforts LEAP Housing and Property People. From using the MLS, going directly to large employers to talk about the opportunity, to even outreach in churches.

“I don’t think there’s enough inventory or even a product like this out here, so it’s just kind of getting the word out,” he said. “It’s been the biggest challenge.”