Commissioners amend ARPA grant to raise income limit for Sisters Habitat homes from 60% to 80% AMI

Deschutes County commissioners voted July 23 to amend an ARPA-funded grant that supported an affordable housing project in Sisters, increasing the maximum qualifying income from 60% of area median income (AMI) to 80% AMI.

"Sisters Habitat is requesting an amendment to our grant agreement to increase the rate on this project from a 60% AMI to 80% AMI, which would be eligible under the ARPA guidelines," Laura Skundrick, a county management analyst, told the board. The board approved the amendment unanimously.

Why it matters: County staff said the change responds to market and lending conditions that have kept many lower-income applicants from securing mortgages, even when they met AMI thresholds. Increasing the AMI ceiling broadens the pool of buyers who can qualify for the program’s financing tools.

What county staff and Habitat said - Background: The county awarded ARPA funds in 2021 to Sisters Habitat for Humanity to support construction of homes in the Woodlands neighborhood. Construction is underway and the organization has sold or reserved some homes; six remaining homes had generated 131 applications. - Lender eligibility and underwriting: Staff and the Habitat’s executive director, Peter Hoover, explained that lenders participating in the loan program require a minimum FICO score (discussed in the meeting as around 620) and debt-to-income limits set by the Origin Flex First Home (lender) program. Many applicants who requested help were below those credit and debt thresholds and could not obtain prequalification. - How amendment works: County staff said raising the project eligibility to 80% AMI does not bar lower-income applicants; rather it expands the pool of potential buyers who can meet lender requirements. Laura Skundrick told the board the draft amendment is included in the meeting packet as document 2025-778 and that Sisters Habitat’s executive director was available to answer questions. - Price mechanics: Staff described a model used on the Woodlands project: homes appraised in the $530,000 range while the program’s affordable base price for a qualifying buyer is substantially lower — discussed in meeting remarks as roughly in the low $200,000s — because of land-lease or subsidy mechanisms the Habitat uses. Mortgages on closed Habitat homes cited in the meeting ranged from roughly $93,000 to $187,000 in principal, reflecting deeply subsidized sale prices.

Board discussion and vote Commissioners asked about the mechanics — whether lowering the sales price or other underwriting changes might help people qualify. Sisters Habitat and staff said the primary barrier for many applicants was minimum FICO and debt-to-income requirements rather than the project’s subsidized prices. Commissioners emphasized the need to keep building and to continue credit-counseling and homeowner readiness supports; Sisters Habitat staff confirmed they provide homebuyer education and coordinate with NeighborImpact and local banks for counseling.

The motion to amend document 2022-154 (grant agreement) via draft amendment 2025-778 to increase the AMI threshold to 80% passed on the record: commissioners present voted yes; the board recorded the motion and second and asked staff to proceed with the amended agreement.

What the amendment does not do The board and Sisters Habitat noted the amendment does not exclude households at 60% AMI or below; it broadens eligibility to allow the project to secure owner-occupant buyers who can meet lender underwriting and thereby occupy the completed homes.

Next steps County staff will finalize and sign the amendment so Sisters Habitat can proceed with conveying the remaining homes to qualified buyers. Commissioners urged Habitat to continue credit counseling and outreach so applicants who initially failed to qualify can receive support and reapply.