City of Winkler, Lux Construction, and Access CU team up to help home buyers
People struggling to pull together enough money for a down payment on a house now have the opportunity to get a helping hand from a new program launching in Winkler.
Last week, the City of Winkler in partnership with Lux Construction Inc. and Access Credit Union announced the creation of a two-year pilot program called Headstart to a Home.
Under Headstart, Lux will be building 48 new homes on Yellowstone Trail in north Winkler over the next two years and providing a $10,000 discount on the purchase price of each one.
Access Credit Union has committed to providing an insured mortgage to qualifying homebuyers and an interest-free loan for the down payment of five per cent of the purchase price for five years.
Finally, the City of Winkler is offering security to Access for those down payment loans.
“The idea was to try to find ways to help people into home ownership,” explains Mayor Henry Siemens, who notes this program has been in the works for months as one way city leaders are trying to address the housing shortage in the community.
“We hear regularly that it’s difficult for people to save for a down payment, that’s it’s difficult to buy a home,” he says. “If the City was going to be involved, we wanted to make sure that there was something real here, that there was some meat on the bones [to help people].”
The City of Winkler will be setting aside $360,000 per year into a GIC account under the program.
“The City of Winkler will guarantee that down payment for those five years,” Siemens explains, noting that should a home buyer default, the City would be on the hook for half of the down payment amount.
“I think that was the biggest part of the piece that left us a little bit leery,” he acknowledges. “We’re excited about the opportunity to help people get into home ownership, people that may otherwise be years down the road before they can save enough money for a down payment, or potentially some never being able to get there because they spend the majority of their money on rent … but we don’t want to put city money at risk.”
That said, given the fact that home values in Winkler are on an upward trend, city council is confident that even if this program does result in the odd defaulted loan, the homes in question will be worth far more than originally priced, greatly lessening the financial risk.
“Even in the very rare situation that there’s a default, the home itself will be worth more, it will sell for more … and we would quickly be made whole,” Siemens says, noting the program is modelled after a similar one run by a community in Saskatchewan, which sold hundreds of homes and had a near-zero default rate.
The Winkler version is starting with a two-year trial period, but should Headstart prove a success, Siemens could see it running much longer and in other areas of town.
“All of us are doing this pilot program with a set number of units, a set number of time where it gives us an opportunity to learn things that may help us improve this program and figure out should it be extended or should it be rolled out elsewhere?”
Lux Construction Inc. owner Richard Dyck says housing has certainly been a hot-button topic in the community for years. He’s eager to be part of the solution.
“Because we’re developers and builders in the community, we want to do something to give back to the community,” he says. “Building a city, it’s not just about making money.”
This could be a life-changing program for many Winkler families, Dyck says.
“People don’t have $15,000 [for a down payment], but this way they can get in and build up equity in their own home,” he says. “It’s a great opportunity for families.”
Work has already begun on the duplex units, and Dyck expects the first families will begin moving in the first few months of the new year.
Market value on the homes is expected to be around $313,900 before the $10,000 discount from Lux.
Access Credit Union is also excited to play a role in the program.
“Innovative partnerships like these highlight our connections into the communities we serve,” says president and CEO Larry Davey. “We are a local financial institution that is successful because we have built these relationships with municipalities and other organizations that have similar values.
“Homeowners are community builders,” he adds. “They invest back into their communities in many ways, not just purchasing their home but shopping local, working local, and volunteering local. That’s good for everyone who wants to dream, build, and live in Winkler or in any community that supports innovative programs like this.”
Lux is working with Choice Realty on the sale of the homes. Further details about the duplexes and the entire Headstart program can be found at choicerealtyltd.com.
Qualified families will need to be approved for the program and a mortgage by Access Credit Union. The home needs to be owner-occupied and the maximum annual family income to qualify for this program is $125,000.
