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Home loans to moderate-income Idahoans surge as lending standards ease

The Idaho Housing and Finance Association enjoys the best of both the public and private worlds. As Idaho’s administrator of federal housing programs, the state-chartered association has access to grants and loan programs available through the Federal Housing Administration. That allows the association to offer loans for homebuyers at below-market rates. It also buys, preserves and manages affordable apartments for rent.

The association operates as a self-funded nonprofit, generally free of legislative whims and budget fluctuations. In addition to underwriting 5,205 home loans in 2014 and an estimated 6,800 loans in 2015 , the association offers free homebuyer education classes and counseling for homeowners struggling to keep their homes or make mortgage payments.

President Gerald Hunter’s office at 565 Myrtle St. in Downtown Boise gives him a clear view of the Treasure Valley and Idaho’s housing markets. He says those markets are healthy. Here’s why.

Q: What’s your background, and what brought you to the Idaho Housing and Finance Association?

A: I started my career in the accounting profession for what’s now called KPMG. I specialized in real estate and financial institutional clients. I started here as the finance director in 1987 and was appointed president and executive director by the board in 1998.

Q: How many employees do you have across the state?

A: We have about 250 employees scattered in five branch offices in Coeur d’Alene, Lewiston, Twin Falls and Idaho Falls. About 155 work here in the Treasure Valley. Pretty much all of our lending activity is done by employees here.

Q: How many homeowners used the association’s housing counseling services last year?

A: We had 2,535 borrowers who came in for counseling. Most of that — 2,100 — was default counseling. Even in a good economy, people lose their jobs, or life events create problems that can lead to defaults. In our experience, if they are willing to go through what at times can be a tedious process, four out of five people we work with will have a successful outcome.

Q: What trends do you see in your single-family loan demand?

A: A huge jump has occurred since the first of the year. We’re seeing a pretty big uptick in our single-family lending business just in the last couple of months.

Q: Several agents have theorized that the mild winter brought the seasonal sales increase we usually see in spring several months early. How much credence do you give to that idea?

A: We’re pretty optimistic in terms of loan applications. There’s been some loosening in lending standards. There’s been some changes in down-payment requirements from Fannie Mae and Freddie Mac that are making credit a little bit easier to get. At the start of the year, the FHA lowered their insurance premium, and we'’e seen an uptick in our FHA business. The early spring didn’t hurt, but I think there’s more going on than just that.

Q: Who are your borrowers?

A: In 2014, our average residential borrower household was 2.5 individuals. The average age was 36 years old, which is up quite a bit from 2008. The average household income was $46,000, and that’s gone up a little bit, too. The average loan amount was $138,000.

Q: Between median prices, sales volume, inventory and a cornucopia of other statistics, the search for meaning in real estate stats can be overwhelming. What metrics do you look at when determining the health of the market?

A: We get a good sense in our minds about how the economy is progressing based on how our products are performing in the marketplace. We’re seeing more people wanting to purchase homes. We have a multifamily side to our operation. We look at reports about low vacancy and high occupancy rates throughout the state, and we have a chance to see where markets are tight and where rents are rising. That also gives us a pretty good feel for what communities are having economic growth.

Q: Have buyer habits changed since the recession?

A: The idea of maximizing how much you can borrow was rampant in the buildup to the recession. I don’t think that’s true today. We’ve got a lot of buyers who are making an honest decision about how much of their income they can really devote to a mortgage payment. That’s really good for them to do, and it’s something we encourage through our homebuyer education programs.

Q: Have you noticed other changes in buyer behavior?

A: I’m seeing greater consciousness from buyers about sustainability. They are looking to make sure homes are energy-efficient, that it’s built well, more so today. If you go to Harris Ranch – the part of the city where I live – you see homes where buyers aren’t too interested in big lots. The homes built there are close to zero lots with nice amenities in the house and less concern about yard size.

Q: Were you ever tempted to leave the association?

A: I’ve enjoyed my tenure here. We have created new things. This is a a very different organization than the one that I first joined. It’s all been very worthwhile to me. It’s kept me here. As far as outside opportunities go, I don’t talk about that kind of stuff.