State re-introduces homebuilder incentives
CHARLESTON, W.Va. -- A state housing agency has brought back an incentive program designed to spur home construction in West Virginia, particularly in areas where the natural gas industry is booming.
Under the program, the West Virginia Housing Development Fund will buy houses from builders -- at 70 to 85 percent of appraised value -- if builders are unable to sell the homes.
The housing agency has allocated $2.5 million for the program, and expects to buy about 100 homes annually.
The program encourages builders and modular-home dealers to construct and sell single-family homes, housing officials said.
"It alleviates some of the risk for builders," said Steve Fisher, deputy director of program operations at the Housing Fund. "It's a facilitating program."
The state's housing agency formally started the program -- called Constructing Affordable Sensible Homes, or CASH -- in 1993. The Housing Fund wanted to address a shortage of new homes and moderately priced housing in north-central West Virginia. In 1997, the FBI opened a massive fingerprinting center in Clarksburg, creating 1,100 jobs.
In 2008, the Housing Development Fund shelved the CASH program because the state's housing market, like the rest of country, declined significantly.
The housing agency recently decided to bring back the program after talking with builders, realtors and business leaders in the state's growing natural gas industry.
"As we've worked with leaders in that sector, many have noted that safe, affordable housing is tough to find," said Erica Boggess, acting executive director at the Housing Fund.
The Housing Fund will buy new, unsold homes valued $250,000 or less. Builders must first try to sell the houses on their own for at least 180 days after construction.
"We're not trying to build really expensive homes," Fisher said Wednesday. "We're trying to get homes built in the middle range, the types of homes folks are asking for."
Fisher said the program also will likely spur some people to move into larger homes, freeing up lower-priced houses that qualify under the agency's first-time homebuyers' program.
"They may move out of a $90,000 home," Fisher said. "Some folks are asking for houses a little bit bigger."
Boggess said the CASH program works well with the agency's existing "DEMO" program, which provides loans -- up to $150,000 -- to cities and counties that want to tear down abandoned buildings.
"It seems only natural that building a new home on a demolition site could go a long way toward revitalizing that neighborhood," Boggess said.
More information about the CASH program is available on the housing agency's website at www.wvhdf.com. Builders must pay a $200 fee to apply. Nonprofit groups aren't eligible to take part in the program.
Reach Eric Eyre at email@example.com or 304-348-4869.