Pandemic funds flowing to affordable apartments, down payment assistance
When state lawmakers allocated a quarter of a billion dollars of federal American Rescue Plan (ARP) funds last spring to develop and preserve affordable housing, they were aiming to alleviate Nevada’s increasing housing costs — which at that time were skyrocketing to record levels.
On Thursday, lawmakers on the Interim Finance Committee learned that the Nevada Housing Division has allocated 46 percent of the $250 million in Home Means Nevada grant funding they approved, up from the 26 percent that was obligated as of last month. The housing division needs to allocate funds by the end of 2025.
“In a little over a month, another 20 percent has been obligated. So we're making great strides in that area,” Nevada Housing Division Administrator Steve Aichroth said at Thursday’s IFC meeting.
Nearly one-third of the funding was awarded to four entities — the Reno Housing Authority, the Southern Nevada Regional Housing Authority, Ovation Development and Nevada HAND. Ovation Development, a company founded by developer Alan Molasky that constructs both affordable and luxury apartments — is a general contractor based in Las Vegas. Nevada HAND is the state’s largest nonprofit developer.
“This $160 million represents 32 percent of the funding,” Aichroth said. “These are traditional partners, historic partners that the division works with virtually on a daily basis to provide affordable housing in the state.”
Many affordable housing projects require bond funding, which the Nevada Housing Division has earmarked for that purpose.
On top of the affordable housing projects, a significant portion of the Home Means Nevada funds are going to homeownership programs, specifically for first-time homebuyers and those buying homes in rural communities.
The housing division allocated $7.5 million toward down payment assistance, which will allow for $15,000 grants to eligible homebuyers within the state.
“The average household size is three. The average purchase price of the home is $297,000. The average household income is $64,000. The average mortgage rate or average mortgage is $279,985,” Aichroth said. “At today's rate, a 30-year mortgage for $279,985 equals about $1,886 per month [but] doesn't include taxes, insurance or [homeowners association] fees.”
He pointed out that if Nevadans can get qualified for a mortgage payment of $1,886, that cost is “comparable to a lot of rents that folks are planning to pay.”
The average cost for a two-bedroom apartment in Reno is $1,650 a month, according to zumper.com. In Las Vegas, the same size apartment costs $1,495 monthly.
Despite the mortgage and loan programs provided through Home Means Nevada funding, data released recently from ATTOM — a leading researcher in real estate data — showed Nevada had the highest foreclosure rate in the nation.
Sen. Dina Neal (D-North Las Vegas) voiced concerns about the high number of foreclosures across the state and whether residents who participate in these programs and get down payment assistance then find themselves over their heads in housing costs, resulting in a foreclosure down the road.
Aichroth said though the state housing division tracks foreclosures, the data is too new to determine if those who had participated in the program had ultimately ended up in foreclosure.
However, housing assistance is available to constituents facing a foreclosure through the Nevada Affordable Housing Assistance Corporation (NAHAC), which was provided $121 million in Home Means Nevada funds. The NAHAC provides temporary help making mortgage payments if someone is facing unemployment or experienced financial hardship because of the COVID-19 pandemic.
“I think they have burned, right off the top of my head, through about 30 percent of that funding and that funding is still available until December of 2026,” Aichroth said.
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