Members of the groups that affect what happens in housing and lending spoke about affordable housing at the Longmont Museum on Thursday.
Representatives from the National Development Council, Freddie Mac and Fannie Mae spoke to a Longmont crowd made up of local real estate agents along with some politicians and city staff. Put on in part by the city and Longmont Economic Development Partnership, the speakers provided insight and data on home buying to the participants.
Fannie Mae and Freddie Mac were created by Congress to provide liquidity, stability and affordability to the mortgage market, while the National Development Council, which is a national nonprofit that directs capital and financial expertise to local communities, governments and agencies.
Sheldon Bartel, central regional director for the National Development Council, described the Longmont real estate market as competitive.
“But cracks are appearing,” he said. “Days on the market are longer with interest rates going up. People are thinking more before they go out and spend a lot of money.”
Andy Melsheimer, senior manager of business account management solutions with Fannie Mae, and Mia Jones, affordable lending manager for Freddie Mac, both agreed that their companies expected tough times ahead. They cited inflationary pressures and rising interest rates, forecasting that home sales will fall starting as soon as next year.
When it comes to affordable housing, Bartel outlined the balance at play between what a developer will pay and risk when building homes and what prices are necessary for a community, where the goal is that no more than 30% of a household income goes toward housing across the income ranges.
He pointed out that for housing in Boulder County to be as affordable as it was in 2014, home values would have to decrease by 36%. He proposed that the public sector needs to provide the money to cover the gap between what it costs to build housing and what the fair market value is, to ensure that those with low to moderate incomes can afford to buy homes.
“Why should Longmont focus on creating and preserving affordable housing? Well, an inclusive economy is a strong economy,” he said.
Jones spoke to the work Freddie Mac is doing to help solve some of these issues in the housing market, including providing a number of resources to first time homebuyers. Her company works to help get potential buyers ready for purchases through education along with offering cheaper loans to people making less than the area median income.
Melsheimer highlighted Fannie Mae’s work to help Black people to become homeowners after decades of racist policies created a large disparity in homeownership. It targets education, financing and equity building.
Melsheimer also spoke on Fannie Mae’s pilot program that helps renters become homeowners. The company’s work makes it easier and cheaper for landlords to report rent payments to credit bureaus, which can then help improve the credit scores of renters looking to own a home.
According to Melsheimer, in the first year of the pilot program, 3,000 borrowers who otherwise would not have qualified for a loan were able to do so thanks to this program.
