What is the Denver Affordable Housing program? It is a question I expect to answer quite a bit in the next few weeks since I just put a great affordable housing unit on the market in Stapleton. The Denver Affordable Housing Program is a program through the city that limits the maximum resale value of a home and the income a purchaser can qualify with in order to provide affordable home options in parts of the city that otherwise would be out of reach for many buyers.
Generally speaking, "affordable" housing refers to housing affordable to households that make below 80% of the Denver area median income. For this two bedroom condo in Stapleton, click here for all the details, the maximum income you can qualify with is $43,600 for a 1 person household, $49,800 for a 2 person household and $56,050 for a 3 person household. These can change depending on the area and building though. I've seen some Downtown that the maximum income for an individual is closer to $90,000. This condo is priced at $119,400 while market rate condos similar are well over $200,000 so you can see the benefits of this program.
You may be thinking, this sounds great, what's the catch? I wouldn't call it a catch, but there are some special terms. First, the city limits how much you can resale the home for in the future. Typically it is a max of about 3% appreciation per year. This keeps the price affordable for the next buyer while still allowing you to take advantage of your investment if the market does well. Second, the city strictly limits renting these out. The city has to approve the rental and if they do, you are not allowed to profit from the rental, just cover your expenses.
I've sold a number of these homes over the years and I think they are perfect in the right situation. It can allow people to buy in places like Stapleton or Downtown that normally they would never qualify for and while appreciation and rents are limited, it can still be a solid investment. You could do a lot worse than 3% appreciation per year and all selling costs including Realtor fees are excluded from that so in reality, anything you sell over what you bought it for could be pure profit. This development in Stapleton is really popular for students and the medical profession at University Hospital and Children's Hospital. A buyer could live here for 3 or 4 years paying well below the market rent while paying down their mortgage and potentially making a decent profit someday. If you are interested and would like to talk more about your options, please let me know.
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