When Margaret O’Neal, chair of the city’s Affordable Housing Commission, first moved to Juneau in the early ‘70s she found that many people who owned houses had first lived in mobile homes.
“It was a very Alaskan kind of experience,” she told the Empire. “That was how people built equity, but you have to have financing first.”
Now, more than 40 years later, a program she helped launch has the potential to set Juneau residents on that “very Alaskan” road to equity.
This week the city launched its mobile home down payment assistance program, a partnership with True North Federal Credit Union. The program, which originated in the Affordable Housing Commission, will allow Juneau residents with a median household income of less than $96,800 annually to obtain low-interest loans covering up to half of their down payments.
“Everything that we’ve seen over the years says that we need to provide as many tools possible to grow our affordable housing stock, and this is another tool,” said Scott Ciambor, the city’s chief housing officer.
Mobile homes represent a sizable chunk of Juneau’s affordable housing stock, according to Ciambor. There are more than 1,200 mobile homes in Juneau, accounting for roughly 11 percent of the city’s overall housing stock.
Mobile homes offer a less expensive alternative to renting than conventional homes, but that doesn’t mean they are easy for everybody to get into.
Typically mobile homes have higher down payment requirements, according to Bill Peters, vice president of Corporate Development for True North. People buying mobile homes are typically asked to put 15 percent down whereas a first-time homebuyer purchasing a conventional house might only have to put 5 percent down.
This means that a person looking to buy a $100,000 mobile home would have to make the same down payment as a first time homebuyer purchasing a $300,000 house.
“Mobile homes — particularly mobile homes in parks — are a mainstay of affordable housing here,” Peters said.
For the past three years, True North has been offering financing for mobile home down payments, Peters said. During that time, the credit union has booked 22 loans for homebuyers with annual household incomes ranging from about $40,000 to nearly $90,000. Now the city is sweetening the deal.
It’s offering loans to match up to 50 percent of mobile home down payments through True North. These loans, which will have to be paid back in five years, will carry a 1 percent interest rate, which is quite low Peters said.
So if our hypothetical homebuyer looking to purchase a $100,000 mobile home with a down payment of 15 percent were to take advantage of this new program, he or she would have to put $7,500 down, and the city would loan him or her the remaining $7,500.
“We essentially process the city’s loans in conjunction with our lending,” Peters said.
If everything works according to plan, Peters said this program could help younger or lower-income families begin building equity, a crucial step for those looking to climbing the housing ladder.
The city has set aside a little more than one fifth of its nearly $500,000 affordable housing fund to support this program. It will continue to provide down payment loans until the $100,000 it has reserved for the program runs dry.
It’s too early to say the extent to which the mobile home down payment program will ease the high cost of housing in Juneau. For Ciambor and O’Neal, though, it’s an important new tool for their toolbox — so long as people know about it, that is.
“We have such a stuck market, so some of the work that we have to do is let people know that these resources and tools exist,” O’Neal said.
• Contact reporter Sam DeGrave at 523-2279 or sam.degrave@juneauempire.com.
