South Metro Housing Options is ramping up its efforts to reach landlords through its new rental rehab program while it continues its regular housing rehab program.
Through a partnership with FirstBank, the housing rehab program offers 10-year, low-interest loans to low-income residents of Arapahoe County for rehabilitating their homes. The rental rehab program offers similarly low rates to landlords who have low-income families as tenants.
The loans never exceed $25,000, and the projects target the most-needed renovations. In 2011 the average loan was $13,500. A family of four making up to $63,450 can qualify for the housing rehab program.
Kimberly Kingston has served as director of the Littleton Rehab Program, formerly the Littleton Housing Authority, for seven years. As the only employee of the program, Kingston acts as loan liaison, construction manager, fund-raiser and in any other roles required.
Kingston says construction projects run the gamut, from electrical, plumbing and heating upgrades to a new kitchen or roof. Her contractors put in standard high-efficiency furnaces and hot-water heaters, and standard insulation. Kingston encourages homeowners to choose energy-efficient upgrades when possible, but due to the loan limitations, significant green upgrades like solar panels aren’t feasible.
Kingston says the process is relatively simple and quick. After homeowners qualify based on HUD qualifications and an inspection, Kingston works with each homeowner or family to decide what work has top priority.
Kingston then invites several pre-approved contractors to look over the list of needed improvements and walk through the house before bidding on the projects.
“We generally go with the lowest bid, and the most responsive and responsible bid,” Kingston says. Those bids are generally 20 percent lower than a market-price bid for the same job.
The contractors who work with the rehab program know they are doing quality work for people who need it. Plus, it’s regular work, and Kingston makes sure they get paid quickly.
Pat Collins and his wife, Barbara, of Littleton went through the rehab program to update their kitchen in 2010.
“Kimberly is a good go-between,” Collins says. “She kept things on track and told us about a lot of things we didn’t know to ask.”
Collins said the contractors were polite and easy to work with. “It was as painless as something like that could be. It gets pretty awkward when you have someone in your house seven to eight hours a day for a few months.”
Gary Foutch of Colorado Custom Trim LLC has been working on rehab jobs with Kingston’s program for five years after starting out mainly in new construction. “That was a big rat race,” Foutch says. Now, he and others enjoy the regular work provided by the rehab program and are willing to do the jobs for reduced rates.
“We know these people are lower-income families,” Foutch says.
He still works in new construction but has found that doing remodel work for people with lower incomes is a way to give back. “We (contractors) take from the community a lot. You’re not always supposed to be pickin’.”
Kingston says each job lasts 45 to 60 days. Once the work is completed, a deed of trust is filed with Arapahoe County as an encumbrance on the property, until the loan is paid off.
Not all homeowners are able to pay the loans back. Some are granted income-based forbearance, in which case the loan is repaid by the program if the home is sold or if it can’t be repaid within 10 years.
“We don’t want to burden a homeowner with a loan they can’t pay, but we still want them to live in a safe and habitable place,” says Kingston, who added that she tries to get creative and help customize loans for each homeowner.
Most homeowners pay their loans in full, recycling that money back into the proverbial pot and allowing Kingston to keep the funds flowing and help more residents. In the last seven years, the program has reinvested more than $800,000 back into new projects, Kingston says.
Every 18 months Kingston re-applies to Arapahoe County for additional funding.
Kingston says the added property value after rehabilitation is typically about one-third of the renovation cost, but the program’s aim is to help people maintain their homes in the Littleton community, rather than simply improving home values.
Kingston says she always has a good flow of residents giving their houses much-needed upgrades. Now she is hoping to find landlords to participate in the rental rehab program that she started in 2011.