Residential developer eyes D&D lots to build homes for seniors and veterans
May 8—Six single-family homes could be constructed on city-owned D&D lots so long as the developer is awarded funds from the Federal Home Loan Bank Homebuyer program. If Paramount Development grant is successful in obtaining its grant, the homes will target people with lower incomes, senior citizens and veterans.
Jerry Floyd of Paramount Development told members of the Newton City Council that he won't know until December whether he received the awarded funds. The six homes would be built with two bedrooms over basements. Floyd said in order to score well enough in the program, the homes need to target certain populations.
"In our particular case, all of these homes will be reserved for seniors for purchase," he said. "Seniors are defined as someone 62 and older. On top of that we have some additional targeting that three of these homes must be sold to a veteran. So that will be our targeted market."
It would cost around $280,000 to build each of these houses. Floyd said the Federal Home Loan Bank comes in with a $150,000 subsidy, allowing the developer to sell the homes for $125,000-$140,000. These prices, he said, are affordable for seniors, and he expects they would be sold before they are built.
"They will have a five-year period to sign," he said. "If they try to re-sell the home in that time, the Federal Home Loan Bank will recapture some of that money it receives over that period of time. But they're kind of in for five years, and once they're there that $150,000 for their benefits is no longer over their head."
According to city documents, the developer anticipates the construction and sale of these homes to occur over a 24- to 30-month period.
The D&D lots were purchased for $30,000 under the condition the developer is awarded funds. Otherwise the sale is null and void. The properties included: 1017 West 4th Street South, 1219 South 4th Avenue East, 902 1st Avenue West, 625 East 5th Street South, 917 1st Avenue West and 717 West 6th Street South.
Council member Randy Ervin praised the idea of establishing new houses for seniors and veterans, but he asked Floyd why he chose Newton. Floyd said he has ties to the Iowa town. While he is not originally from Iowa, his wife was born in Skiff Medical Center and lived in Newton until the third grade.
"Newton has been a special place in my heart," the Texas-raised Floyd said. "...But you guys are doing a phenomenal job with these D&D lots. We can't go buy $60,000-$70,000 lots in Waukee and do what we're doing. It just doesn't work. We're offering $5,000 which is pretty much the most I can offer."
Paramount Development also purchased four other D&D lots in Newton, but with the same contingency that the sale is approved if its Iowa Finance Authority HOME Program Rental application is accepted. These three-bedroom, single-family homes are only targeted to those who have lower income.
Unlike the earlier six homes, these four residences will be rentals owned and operated by Paramount Development for a 20-year period. Those properties include: 509 West 2nd Street South, 514 South 2nd Avenue West, 315 East 4th Street South and 616 West 4th Street South.
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