Senate Committee Seeks Programs To Boost Homeownership In VI
Troubled by widening income inequality and homeownership rates in the territory, the VI Senate Finance Committee called officials from local banks and the VI Housing Finance Authority during a hearing on Tuesday. to discuss options that might help residents looking to buy a home.
“We are all really concerned about the lack of housing options in the territory, especially for low-income residents and securing opportunities for middle-income residents,” said Senator Milton Potter, who is not a member of the committee but attended the hearing.
A housing market analysis conducted by the US Department of Housing and Urban Development, estimated the homeownership rate in the US Virgin Islands to be less than 43%, based on 2019 data, while nationally , the homeownership rate was estimated at over 64%.
the HUD analysis shows that the territory’s lower incomes, compared to those of the country, combined with relatively high house prices resulting from strong demand from non-residents, have contributed to the low homeownership rates in the territory.
While little can be done to stop the gentrification of the land, several local banks and the Rural Development Division of the United States Department of Agriculture informed the committee of the various loan options available to them. low income families.
Representing the US Department of AgricultureKimme Bryce said the department offers:
– The 502 direct mortgage loan program for single-family housing,
– The section 502 guaranteed loan program for single-family dwellings,
– The loan and subsidy program for the repair of single-family dwellings, and
– The housing loan program under the direct single-family housing program.
The programs, while limited to applicants’ specific income requirements, are available to all residents, not just first-time home buyers. Some programs offer residents the option of buying a home with no down payment for considerably less than the typical 20 percent expected by most banks.
The Housing Finance Authority can also help homeowners through various programs, but the authority’s executive director, Darryl Griffith, said the programs suffered from a lack of funding and some programs were so underfunded they could only help six residents per year.
“Currently, the administration has a pool of 110 mortgage loan clients in the St. Croix District and 187 in the St. Thomas / St. John District with a total of 297 mortgage applicants. The authority has no shortage of clients, but it has a dramatic shortage of local funding, ”Griffith said.
But low-income residents aren’t the only ones struggling to buy, refinance or rehabilitate a property.
“The big problem is to be able to help them subsidize them [homeowners] in terms of the down payment and in terms of being able to help the middle class, ”Griffith said. “Basically all of the funding we have is for low- and very low-income people who come from HUD. So in order for us to help as HIVFA, we will also need funding to be able to serve the middle class.
Griffith said that ultimately the power rests with the Legislature to appropriate the funding to enable the authority to serve the territory’s middle-income population.
Additionally, Griffith told committee members that local banks need help securing private mortgage insurance in the territory.
“When I bought my first home in Florida, this is what I used,” Griffith said. “I put little or nothing, but the PMI was what was used to get me to my first house. Then I sold this house when I got home [the USVI] and I was able to reduce by 20%. So if the legislature can do anything to help the banks get the PMI, I think it’s going to go a long way and fund the HIVFA of course.
According to Griffith, funding allocations are needed for the Homestead, Veterans and Moderate Income programs which have not been funded for over a decade. Griffith suggested that the STEP program, which will generate over $ 35 million in gross revenue for the territory, have $ 21 million allocated from that gross revenue to be split evenly among the aforementioned housing programs.
The inability of residents to obtain construction loans adds to the problem of low homeownership rates. At present, the only institutions providing housing construction loans in the territory are the Banco Popular and the United States Department of Agriculture.
“This means that if someone isn’t buying a fully built turnkey home, only these two institutions can help them,” Griffith said.
Although legislation regarding these issues was not addressed during the hearing, the committee recognized the need to find solutions for residents of the territory who would otherwise be forced to continue to rent a property instead of buying the property. their.
The senses. Kurt Vialet, Donna Frett-Gregory, Marvin Blyden, Samuel Carrion, Javan James Sr., Dwayne DeGraff and Janelle Sarauw were in attendance. Non-committee members were also present.