Council transfers rural housing authority bond cap

The Mesquite City Council approved a Deed of Dedication for a strip of land that will extend Leavitt Lane approximately 250 feet west from its existing intersection with Falcon Ridge Parkway near the I-15 Exit 120 roundabout to enhance improvements next to the Sinclair gas station. Photo by Barbara Ellestad.

After delaying the issue in June, the Mesquite City Council unanimously approved transferring over a million dollars in rural housing authority bonding capacity to the Nevada Rural Housing Authority at its July 24 meeting.

Nevada Rural Housing Authority Deputy Director Bill Brewer informed the council that the money was a “use it or lose it” proposition with an Aug. 31 drop-dead date. “Nevada gets about $300 million a year from the federal government” Brewer said. “Nevada is unique in that it takes half of its allocation and distributes it to local communities based on their population. Clark County gets over $50 million.”

This year’s bonding value is $1,098,164.53 in tax-exempt private activity bond volume for Mesquite. That is the amount the city could have issued bonds for to help provide housing assistance to low-income potential home buyers in Mesquite.

The transfer was not actual cash but the authority to issue bond debt that can be used to provide down payment assistance, mortgage credit certificates and soon a new lease-to-own option for affordable housing options.

The bonding authority transfer has almost become an annual event between the city and NRHA since 2006 and has historically involved around a million dollars each year.

Brewer told the council that the city has transferred $7.6 million in bonding capacity back to NHRA since the program started in 2006 with a four-year break during the recession years.

Background documents show that 10 loans have been issued to homebuyers living in Mesquite for a total of $1,767,500 in assistance. Three homebuyers in Bunkerville received $535,716 in assistance.

The Enterprise/Las Vegas area had 1,023 participants receive $229,757,075 in assistance.

The program is designed to “help families overcome barriers to homeownership through the Home At Last program” that provides access to credit for those who qualify. The certificates provide a direct tax credit of up to $2,000 a year for the life of the mortgage for those who participate in the program.

Brewer said that one reason the awarded amount is not greater in Mesquite is because the bond amount is too small to go it alone. He explained that his organization combines all the small amounts awarded to individual communities and then issues bonds for the total amount.

Councilman Brian Wursten asked why Mesquite had such a low participation rate in the mortgage program. Brewer said, “I tried to find out why you don’t use more but, in all honesty, we’ve had a difficult time cracking the mortgage market here in Mesquite. Most of our funding has gone to areas closer to Las Vegas where lenders seem more willing to use it than lenders out here.”

“If that’s something we want to increase, we need to work with local lenders,” Wursten said. “Since we have a bunch of realtors up here (referring to fellow councilmen Geno Withelder and George Rapson) there you go,” he added jokingly.

“I would love to see that,” Brewer replied.

Councilman Rapson clarified that the bonding cap for the housing authority does not affect the city’s bonding capability in any way. “It creates no obligation for the city,” Brewer said.

“If we want to use our bonding capacity here in Mesquite, we would have to issue our own bonds, is that correct,” Councilman Dave Ballweg asked.

Brewer said that was a correct assumption.

“But we can’t carry it over year-to-year, correct,” Ballweg asked.

“It’s a use it or lose it situation,” Brewer said. “But if the city wanted to use it for some other purpose we wouldn’t argue with you.” Some examples he gave of ways to use the bonding capacity were industrial development, commercial real estate transactions, local civic purposes, or even student loans.

“Because of the complexities involved in the bonding process, my recommendation is to work with the State Department of Business & Industry and leverage your million dollars with what they have to bring,” Brewer said.

Brewer added that people who purchase the bonds are the ones who would lose money not the city if the loan went unpaid.

When it came to the actual vote to transfer the bonding capacity, Wursten said, “We have to do something with this by the end of August. It would be hard to do anything between now and then. I recommend we approve this now but look at some other options in the future. I would love for us to look at some other alternatives.”

Comments

  1. Rebecca Damron says:

    So your article says to help future home owners? It won’t help the young couples, elderly, or those that just need to rent?

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