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With houses getting more expensive, this Kansas program gives first-time homebuyers a hand up

 Misty Brown on her porch in Derby. Brown used a state program to help her buy the home.
Celia Hack
Misty Brown on her porch in Derby. Brown used a state program to help her buy the home.

The state’s First Time Homebuyer program offers assistance with down payments and closing costs for low-income residents. And they’re encouraging potential homeowners to apply.

On the front porch of her Derby home, Misty Brown pulls her fluffy gray cat onto her lap. She didn’t know quite what to expect when she first walked into this house last year. After all, the listing had no photos online.

“I walked in, and I was like, ‘This is it. This is home. This is perfect,’ ” Brown said. “And then it had original pink-tiled bathroom. And that just sold me.”

She did find a few quirks, some of which were left behind by the former elderly owner – wallpapered closets, for instance. Still, she knew it was the right choice.

Brown bought the house using the Kansas First Time Homebuyer program, which offers assistance with down payments and closing costs. Buyers within income limits can receive an interest-free loan of up to 20 percent of the home’s sale price. The loan is forgiven if the buyer remains in the home for 10 years.

“I wouldn't have been able to buy this house if it wasn't for it,” Brown said. “It would have taken forever for me to have enough money down to be able to do it, and being a single mom – without the program, it literally wouldn't have happened.”

Home ownership in Kansas is becoming increasingly expensive. Growth in home values outpaced incomes from 2012 to 2022, making it more difficult for buyers to afford a down payment.

For about 20 years, the First Time Homebuyer program has aimed to help with that. Now, the Kansas Housing Resources Corporation wants more people to apply.

“When the program first opened, the funds would get used pretty much immediately,” said Marilyn Stanley, the single family program manager. “They'd get an abundance of applications and had people that they weren't able to help.

“But these days, we have not actually used all of our funding.”

In 2022, the program used about 70% of its roughly $600,000 in funding, according to Christine Reimler, the director of community solutions at the Kansas Housing Resources Corporation. When that happens, the dollars roll over into the next year.

Stanley says there are several factors contributing to the declining use of the program, including the pandemic and how competitive the housing market has been in recent years.

“Houses seem to be going up for sale and then selling immediately. … And this program may take just a little bit longer to close,” Stanley said. “But I think with the housing market changing, we anticipate – and I'm hearing from lenders – that this program may get more usage.”

Interested buyers connect with the program by finding a participating lender, usually a bank. Sedgwick County alone has about 20.

The state meets another challenge here. Potential buyers’ income can’t be too high that they don’t qualify for the program. But Stanley says their credit has to be good enough to qualify for a mortgage on their own.

“That is often a barrier for people using the program,” Stanley said. “They may think, ‘Oh, First Time Homebuyer program, I got that. I would love to own my own house.’ It's their goal, right? But credit is usually what's holding people back from that.”

Earlier this year, the state expanded eligibility for the program in hopes of allowing more people to qualify. Among other changes, the state decreased how much the homebuyer has to contribute to the down payment.

That might not be enough to help all potential buyers, but Brown says it’s worth it to ask whether you qualify. Since moving in last February, she’s already seen an impact. Her kids, she said, are thriving since they’ve moved closer to the school they attend.

“It hurts not at all to try to do it,” Brown said. “... That's literally what it's there for – to help improve people's living situation and bring more stability to families.”

Kansas' First Time Homebuyer program is available for residents around the state, except in major metropolitan areas such as Wichita. That's because Wichita offers its own first-time homebuyer program, called HOMEownership 80, which helps with down payment assistance and closing costs. The program only accepts applications in connection with homes constructed by developers that receive funding from the city to build affordable housing, many of which are nonprofits like Habitat for Humanity or Mennonite Housing. Applicants can be referred to the homebuyer assistance program through one of the developers.

“Those players that are doing infill development have the ability to tap into HOMEownership 80 funds so that they can qualify their low-income families to buy those homes they just built,” said Sally Stang, the city of Wichita’s housing and community services director.

Copyright 2023 KMUW | NPR for Wichita. To see more, visit KMUW | NPR for Wichita.