MILL CREEK – It’s taken a few years, but the Housing Authority of Snohomish County has finally gotten residents of its affordable housing project in Mill Creek a better loan option.
Fifteen of 41 residents of Thomas Place, a manufactured housing community, have already refinanced their homes with loans from Boeing Employee’s Credit Union.
Managed by the housing authority, Thomas Place was designed to provide moderate-income families with the chance to own their own homes.
“One of our goals was to offer home buyers the same type of home loan that would be available if they were buying a stick-built house,” said Anna Schroeder Osterberg, director of development, construction and maintenance for the housing authority.
“We had hoped to interest a lender in offering competitive mortgage rates, but we couldn’t find a lender who was interested at that point.”
Since the community’s inception in 1998, the housing authority had provided homeowners with 30-year mortgages backed by the sale of bonds. That provided a 7 percent interest rate, which was considered competitive at the time.
“Our goal was to provide affordable home opportunities, and we used every available strategy to do that,” Schroeder Osterberg said.
But lately, interest rates have been averaging about two points lower than in 1998.
With the credit union as a lender, homeowners can now opt for a more conventional 30-year financing, with interest rates comparable to those attached to mortgages for regular single-family homes.
Thomas Place is a tax-exempt land-rent community, meaning the housing authority retains the land and the residents own their own homes. Residents are subject to a monthly land fee.
Before Boeing Employee’s Credit Union became involved, refinancing options were limited to the housing authority, making it difficult for homeowners to sell their houses.
“Over the long run, we weren’t in a good position to continue to finance new buyers,” Schroeder Osterberg said.
But now the credit union will finance all resale purchases, helping to eliminate that problem, said Todd Pietzsch, a Boeing Employee’s Credit Union spokesman.
“One of the big benefits is it is also going to help them with liquidity when they want to sell their homes,” he said.
Thomas Place was originally a privately owned mobile home park. The housing authority bought it after the former owner notified residents that it would be closing in one year because of a failed septic system.
As mobile home residents moved on, the housing authority began bringing in manufactured homes to sell to first-time home buyers. The homes sold for $60,000 to $70,000, though over time their value has appreciated by about $20,000, Schroeder Osterberg said.
Thomas Place will be a 50-home community when completed.
The last three remaining mobile homes will eventually be replaced with manufactured homes, and six more houses will be assembled on undeveloped plots of land.
Boeing Employee’s Credit Union will finance the purchase of those new homes, in addition to offering refinancing to existing homeowners.
Residents were notified in June that the refinancing option was available.
“They have all received bare minimum letters from us,” Pietzsch said. “Everybody should be well aware of it.”
Homeowners David and Norma Hall heard the news at a community meeting. Refinancing made sense to the couple, who have owned their home at Thomas Place for five years.
“Because we don’t own the land, the financing options were very narrow,” David Hall said.
Many homeowners were already experiencing trouble reselling their houses, and David Hall said he believes more traditional loan options will go a long way toward presenting a more attractive package to future buyers.
Lower rates were also an incentive for the couple to refinance.
“We’d seen the interest rates go down for a long time, David Hall said. “Seven percent was fine for the first couple of years, and then the interest rates started dropping.”
Though the program at Tomas Place is the first of its kind for Boeing Employee’s Credit Union, Pietzsch said it is in keeping with the purpose of the credit union.
“Our overall mission is to help consumers reach their goals and lead better lives,” he said. “Credit unions were founded on the fundamentals of helping underserved individuals.”
The partnership between the housing authority and Boeing Employee’s Credit Union is one the credit union hopes to mirror with other housing agencies in the future, Pietzsch said.
For several years, credit unions in Washington state have been open to nonemployees, making it possible for Boeing Employee’s Credit Union to be involved in financing programs such as Thomas Place.
“It’s the concept of people helping people,” Pietzsch said.