Aberdeen-based housing organization teams up with Mitchell to bring more affordable housing options

Mar. 4—MITCHELL — As city leaders push to bring more affordable housing to Mitchell, an Aberdeen organization that has assisted hundreds of people become homeowners is stepping in to help.

Through its programs that provide funding assistance for aspiring and existing homeowners, the nonprofit organization, known as Homes Are Possible Inc. (HAPI), has helped bring over 260 affordable homes to the Aberdeen community and developed more than 250 acres of land since its inception in 2000.

Leaders of the Mitchell Area Development Corporation are striving to provide that type of impact in Mitchell through its newly formed partnership with HAPI.

“This will have a big impact on Mitchell’s housing, and we are excited to hit the ground running and address the lack of affordable homes in Mitchell,” said Geri Beck, CEO of the Mitchell Area Development Corporation (MADC).

Leaders of the organization met Wednesday with a group of Mitchell realtors and city leaders to break down the programs that are now available for aspiring home buyers in the Mitchell area. HAPI Executive Director Darin Beckius touted the success of the closing cost assistance and home repair funding programs that HAPI offers for individuals or families who are at or below a county’s median household income.

For example, a two-person home with an income level of at least $46,200 would qualify for HAPI’s programs, which is calculated by using Davison County’s Area Median Income Level (AMI). For Davison County, a home’s median income level is $72,100.

The organization’s closing-cost assistance program offers up to $5,000 for qualified home buyers in the form of a non-interest bearing loan.

To help the type of homebuyers who qualify and may not have the cash to pay for the closing costs, Beckius said the closing cost assistance program offers a silent second mortgage. Silent second mortgages are typically used to supplement a traditional mortgage when a homebuyer cannot afford the full payment on a primary mortgage, but what makes HAPI’s silent second mortgage unique is it’s zero interest.

“What it does is it takes away the fixed rate plus program loan, so the lender and the buyer are still able to qualify at the 3% rate instead of having to go to the 4%,” Beckius said. “That’s a huge deal.”

While the silent second mortgage is not forgivable, Beckius said the respective mortgage can be paid back to the organization after the homeowner sells, cashes out or refinances their respective house.

Beckius noted local lenders are much better to work with for the closing cost assistance program because some national lenders don’t accept it due to not fully understanding the program, he said.

For both the down payment and home repair funding program, Beckius said each qualified applicant is required to take homebuyer education classes led by HAPI.

HAPI’s ability to provide the home repair funding and closing cost assistance programs is made possible through a couple funding sources, with one being the South Dakota Housing Authority.

The organization was recently awarded $500,000 for its housing assistance efforts, which Beckius said has to be spent within a year.

“I’m asking for your help to help us spend that money. It’s one of those things that if you don’t spend, you lose it,” Beckius said.

With the large amount of aging homes in Mitchell, HAPI’s repair funding program that can provide between $5,000 and $20,000 for homeowners seeking to repair their houses caught the attention of the local realtors in the room during Wednesday’s meeting.

Craig Tischler, a real estate agent with Mitchell’s Exit Realty, said coming up with enough funds and getting financing for the “enormous amount of houses” in Mitchell that were built in the late 1800s and early 1900s and are in serious need of repair is a major challenge.

“There are homes that, like you said, you’re not able to put enough lipstick on or are very hard to get financing because of it. We either need to replace those or fix them,” Tischler said.

For the home repair funding program, HAPI can provide a homeowner with between $5,000 and $20,000 to fix their house. Beckius said the type of repair work that can be done with the help of the home repair funding program is vast.

“That money can be used for basically any work that needs to get done in the house. Whether that’s repairs like windows, siding, or if there is a mobility issue that may come up and need a ramp,” Beckius said. “It is forgivable after five years. Every year there is a 20% reduction, approximately.”

HAPI funds the repair work that’s done by the contractor up front through a grant, which is then paid back to the organization by the homeowner through a forgivable grant. Beckius noted the homeowner is responsible for choosing the contractor to make the repairs.

“The contractor then does the work, and HAPI pays the funds directly to the contractor. We ask the homeowners to get two bids before choosing contractors,” Beckius said.

Jeff Mitchell, former executive director of HAPI, joined the group of local realtors during Wednesday’s meeting and emphasized the home repair funding program is not intended to flip houses, rather he said it’s meant to repair homes and allow the existing homeowners to continue residing in them.

“What we really want to try and do is take housing stock that is maybe getting close to that point of no return, and keep it still usable and viable,” Mitchell said. “Occasionally, we will have some we come across that is too late and you can’t put enough lipstick on to make it viable.”

After developing over a dozen subdivisions in the past two decades, HAPI’s model of building out housing developments has helped the Mitchell Area Development Corporation drum up new ways to approach the proposed

Ridge View on Foster affordable housing development

next to Firesteel Heights.

While there was plenty of excitement among city leaders when the

MADC announced its plan to use 21 acres of land donated by Avera Queen of Peace to build as many as 90 homes,

the plan was shelved after it was approved in 2020 due to what then project leaders said was uncertainty amid the COVID-19 pandemic.

Since then, leadership in the key organizations involved has changed hands, and building costs have made large-scale developments much more difficult. But Terry Sabers, chairman of MADC’s housing committee, said Wednesday the Ridge View on Foster development that’s aiming to bring around 90 homes to the piece of land near Firesteel Heights is still on the table.

To address the shortage of affordable homes in Mitchell, the MADC created a new organization called Mitchell Area Housing Inc. With the creation of the housing organization, Sabers said it could help kickstart the Ridge View on Foster development.

“I think everyone remembers the development on the land that Avera donated, and that is one of the projects that we’re going to be working on to facilitate,” Sabers said. “There are a number of different infrastructure funding avenues that are being looked at right now at the federal and state level.”

While project leaders coordinate plans to get MADC’s housing development started, Sabers said Mitchell’s newly created housing organization is also searching for lots in the city where affordable homes could be built.

“We’re looking at some area of town that needs some revitalization, and we could go in and put a smaller home or governor’s home,” Sabers said.