- Associated Press - Sunday, March 1, 2015

TUPELO, Miss. (AP) - Since last April’s tornado, the city has issued some 260 residential permits valued at more than $60 million.

Much of that development is related to the recovery and rebuilding of homes after the disaster, but city leaders also point to the 46 new single-family homes that were built last year, a 31 percent increase from 2013.

The city, which has long sought to slow down the migration of homeowners outside the city limits to the county, see those numbers as hopeful signs.

They also think the development of two residential communities, along with a program to provide up to 100 percent financing, could help bring people back to the city.

“The housing inventory is the No. 1 issue in the city,” said Tupelo Mayor Jason Shelton, who campaigned on improving housing options.

A major piece of that plan is the second-phase expansion of Westwind subdivision. The first phase has some 90 homes, and the second phase of the neighborhood covers about 30 acres and would add more than 80 homes.

Another development in the works consists of 30 new homes. Details of that project have yet to emerge, but should be forthcoming.

“We know there are plans for at least 100 new homes between the two projects,” said Shane Hooper, director of the city’s Development Services. “With last year’s increase in new homes, we’re hoping for a 50 percent increase on top of that this year.”

To meet that goal, 69 new homes would be built, and Hooper said that number may not be attainable.

“We may not have them all built, but I’d like to know that we’ve broken ground on enough of them to get us there sooner than later,” he said.

To spur interest in the homes is a financing program previously unavailable to homebuyers in the city.

Called Smart Solutions, the program was created by the Mississippi Home Corporation, in partnership with financial institutions including BancorpSouth, Renasant and Trustmark.

“We can partner with MHC to offer up to 100 percent financing within the city limits of Tupelo,” said Mendy Ramey, senior mortgage banker with Renasant. “Until implementation of this program, buyers’ only option for 100 percent financing was to purchase a home in the county.”

For fast-growing communities like Mooreville and Saltillo, having that option for homebuyers was an advantage builders and real estate agents could highlight. Now Tupelo hopes it can negate what had been a disadvantage.

The program is available to first-time homebuyers as well as to those looking to move up.

Smart Solutions is comprised of a first mortgage which covers up to 97 percent of the purchase price using a traditional loan program, such as a conventional or FHA loan. It is then paired with a 3 percent second mortgage.

“The rate is fixed for the life of the loan with no pre-payment penalty,” Ramey said. “The household income limit for this program is set at $80,000. The minimum credit score requirement is a 620 mid-score. Additionally, the borrower must meet program guidelines for the first mortgage as they would with any loan.”

For Shelton, that’s a deal too good to ignore.

“Smart Solutions provides that ability for 100 percent financing for people who need it most inside the city,” he said. “It provides a wonderful opportunity for a young professional, young families to buy a home inside Tupelo. When you add the new developments to increase the inventory of affordable housing, it’s just a win-win for everyone, from the buyers to the city of Tupelo.”

Defining affordable housing, however, depends on who you ask. Shelton’s ideal “affordable” home is around $150,000 “with room to move on either side. If we can increase our stock in that type of home, I think we’ll be moving in the right direction.”

A quick scan of homes in Westwind show home values north of $150,000, up to $250,000 or more.

Whether or not those homes can stay in the “affordable” range remains to be seen. The Jackson Street homes also are expected to be in the “affordable” range, as defined by Shelton.

Tommy Morgan of Tommy Morgan Realtors Inc., said the city’s plan to attract more homebuyers has some potential. Demand for homes has been good.

However, “Sales are 30 to 35 percent over last year,” he said. “So they’re great, but it’s really been in the existing market.”

One benefit of the higher demand is that the inventory of homes will decrease, providing an opportunity for new homebuilders to sell what they put in the ground.

However, Morgan also said there’s been a widening gap in home prices between new and existing homes because material costs continue to be high.

Whether costs can be contained so that the homes can be billed as affordable homes remains to be seen.

Asked if there is a big demand for affordable housing, Morgan said there’s a demand for all types of housing.

“We sell at all price levels, and what sells well is the quality of living of the area, the school districts - it’s very important,” he said.

Said Hooper, “If you look at the houses coming online in the city, coupled with the Smart Solutions financing. We have a great opportunity to bring people back to the city.”

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Information from: Northeast Mississippi Daily Journal, https://djournal.com

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