Elda Bowen was paying $1600 a month in rent out of her modest social security and retirement income. Purchasing a home significantly reduced her monthly payment. The move to Bath County, Kentucky also brought her and the three great grandchildren in her custody closer to relatives and the chance for a fresh start.
Fahe member Frontier Housing helped Elda overcome the barriers she had to homeownership. Due to a concerning credit history from medical debt, conventional loan sources, like banks, would not have given her a second look.
Frontier was able to look at her case individually and see that she had made some important strides since those issues.
“Frontier has been fantastic,” said Elda. “They walked me through my loan paperwork, explained tax forms, and answered any questions I had about construction.”
Additionally, the majority of new Eastern Kentucky homes have an appraisal gap, meaning the cost of building a home is more than what the current market says it is worth after completion. Nonprofit developers in the region like Frontier currently rely on state and federal funding subsidies to fill that gap, which can be as high as $45,000 per home.
Elda benefitted from a layering of subsidies with the Kentucky Housing Corporation to achieve an affordable mortgage payment. The base was a USDA 502 loan which provides low-income rural families with a below market interest rate. A second loan is forgivable in five years in recognition of her commitment to homeownership. Her monthly payments are now $800, half of what she was paying in rent.
Elda sees the home as an investment and security for her great grandchildren. She is creating equity and a stable place for them to live in the long term. They are putting down roots in the community, enjoying nearby Cave Run Lake, and getting to know other families in the neighborhood.
