First-time homebuyers in Spokane may soon have a new option to help them enter a housing market that recently has become unaffordable for may young consumers.

The city of Spokane recently selected Numerica Credit Union to receive a $1.5 million grant, which originated from federal sources, as part of an effort to increase access to homeownership.

“This grant will help strengthen communities that are too often underserved,” Carla Cicero, Numerica’s president and CEO, said in a news release. “Because of this commitment, dozens of families will finally be able to make their dream of owning a home a reality.”

Spokane County’s affordability index, a measure that rates the ability of first-time buyers to purchase a home, has fallen dramatically as the median price of a home in Spokane increased to record highs following the pandemic.

The affordability index measures the ability of a median-income family to afford mortgage payments on a median-priced home.

The first-time buyer affordability index essentially works the same way, except that it assumes the buyer earns 70% of the median Spokane County household income and is trying to purchase a home that is 85% of the median price of a home.

The first-time buyer index also assumes that the buyer is putting 10% of the price of the home as a down payment.

When the index is 100, it reflects a balance between the first-time buyer’s ability to pay and the cost of the home.

As recently as the first three months of 2017, Spokane County had a score of 100.7 for the first-time buyer affordability index, according to research by the Washington Center for Real Estate Research at the University of Washington.

However, in the third quarter of 2022, that index score had fallen to 48.2. At the same time, the median price of a home in Spokane County had climbed to $430,000.

Following a series of mortgage rate increases, the median price of a Spokane County home fell to $382,000 in December , according to the Spokane Association of Realtors. For comparison, the median price of a home in December 2021 was $390,000.

In 2016, however, the median price of a home in the Spokane area was $195,000, according to the association.

“Families, five or six years ago, could afford the mortgage payment but maybe didn’t have the down payment,” said Lars Gilberts, a vice president with Numerica. “Now they are struggling to afford rent and still don’t have the down payment. They are falling further and further behind.”

As a low-income designated credit union, Numerica was selected as a grant recipient as part of its outreach to underserved and underbanked people in the community.

Gilberts noted that only a small percentage of Americans have retirement plans or large investments in stock or bonds.

“The No. 1 way that Americans keep their wealth is through homeownership,” he said. “Yet, it’s not available to a lot of people.”

Numerica and city officials could meet as early as this week to work out the finer details about how to administer the grant, which the city received and awarded as part of the federal American Rescue Plan Act.

“We are excited the city saw Numerica as an ideal partner to use these funds,” Gilberts said.

Some of the ideas include helping homeowners pay for accessory buildings on their properties that could provide them more income, or helping them purchase damaged homes but providing enough money to pay for needed repairs.

“We are looking at all those things,” he said. “We want to structure the program with the city so it doesn’t just help people who otherwise could afford a home but help those families, but for this, who would not be able to afford a home.”

He noted that Numerica already will help any prospective buyer who has more questions than answers about the purchasing process.

“A significant amount of our loans are with first-time buyers,” Gilberts said. “If they are buying in Spokane Valley or Idaho, we can provide financial education and budgeting and coaching so they are ready now or down the road.”

Homeownership goes beyond just the American dream, he said.

“As we see Spokane growing and changing, one of the ways you feel like you have a stake in it is if you have a part of it,” Gilberts said. “Homeownership is not just one person’s dream, it’s also their connection to their community.”