Home ownership benefits both the individual and the community. Not only does it stabilize housing expenses, but according to Nils Peterson, director of the Moscow Affordable Housing Trust, it also stabilizes communities.
“Where renters dominate, the character and care of the area is different than if owners dominate,” Peterson said. “Owners have an investment. They participate in civic activities, government, all those things that build community.”
The Moscow Affordable Housing Trust is a state and city funded organization that seeks to provide affordable home ownership opportunities to individuals and families with a lower than average household income. The trust purchases and rehabilitates, or simply builds from the ground up, a home and sells it to a qualified buyer. The trust works with people who have a household income of 50 to 80 percent of the Area Median Income. Because of this, Peterson said they must sell a home for between $155,000 and $165,000.
The process looks like this — first, the Idaho Housing and Finance Association provides seed money and a line of credit to the city of Moscow with a general idea of how much affordable housing can be created with that capital. The city, through the Fair and Affordable Housing Commission, provides that capital to the trust, which, with the direction of Peterson, creates a plan of what can be bought, rehabilitated or built.
The trust then works with realtors, bankers and contractors to finish and sell the house to the qualified buyer. Finally, the money the buyer pays for the house goes back to Idaho Housing to be used again.
To find and educate interested buyers, Peterson holds a seminar called “Finally Home.” The seminar gives interested buyers the chance to connect with realtors, bankers and financial professionals from the community to help better prepare them for buying a home.
Peterson said the course greatly reduces the chance of foreclosure, which he said was something to be intent on avoiding.
“It’s messy,” Peterson said. “Everybody loses money and you’re out of a house.”
Moscow City Council member John Weber said he was selected by the trust to sit on its board as an elected official. Because of the legal limitations of the city’s Fair and Affordable Housing Commission, Weber said the trust exists to do the things the commission cannot.
“If there’s three people who all want to buy the house and we have to pick one and say ‘you get it,’ we can’t do that at the city,” Weber said.
Peterson said the trust sold its first home in April. He said it was a rehabilitated house between Moscow and Troy. He said the trust can’t rehabilitate any old house, though. Only homes built in 1978 or later are eligible because of lead paint risks in older homes, and because of the small range at which the final house must sell, the initial house must fit in the budget.
The rehabilitation market in and around Moscow is small for the trust. Peterson said two-thirds of homes are disqualified because of their age.
Age is no issue with a new house, however, and Weber said the trust is beginning construction on a new one on Morton Street in Moscow. Weber said buying the lot is often the largest single expense in building a new home. He said if the trust can’t lower the price, many opportunities are closed off. Because there is no actual profit made for the city once the house is bought and all surplus money goes back to the state, Weber said it behooves the trust to build as much quality as possible into the house, rather than ending under-budget.
Peterson said for middle-income people, buying a home is the biggest investment they could make toward retirement. He said home ownership stabilizes housing expenses, meaning a landlord could never raise rent unexpectedly.
Once the house is paid off, Peterson said a person could live there paying nothing but taxes. Peterson emphasized the role that debt can play in buying a home.
“The ideal buyer has zero other debt. That buyer doesn’t need my help,” Peterson said. “The real buyer’s ability to borrow is limited by their debt-income ratio.”
He said his buyers cannot have more debt than 41 percent of their annual income, and that having too much debt could prevent anyone from buying a home.
Peterson said student loan debt is especially problematic. He said it is a special form of debt from which an individual cannot declare bankruptcy and walk away. Peterson strongly recommended college students borrow as little as possible and be frugal during those years, or else they could be burdened with that debt for many more years. He also suggested college students learn about and begin building their credit score.
Unfortunately for students, Peterson said Moscow has lower wages and higher rent and housing prices than what would be expected for the area. He said it is because Moscow is a resort community, and college students are the resort goers.
“When people bring in money from beyond what’s local, they bid up rent and housing prices,” Peterson said. “There are low wages in Moscow because there’s a glut of students taking low wage jobs.”
Jack Olson can be reached at