Rural Housing 360, a for-profit company that works with employers and communities to provide workforce housing in rural Iowa, is in its first real year of operation and already is completing seven model homes, has another seven in the process of closing and another 20 being planned.
After a visit last week by Steve Gilbert, founder of Rural Housing 360, Denison City Manager/City Engineer Terry Crawford offered that Denison would be a good location for one of the model homes.
When Rural Housing 360 partners with a community to build a model home, it is a bare bones project to help the city sell it. Gilbert said Rural Housing 360 doesn’t have to make money on a model home but doesn’t want to lose any.
A model home is shown to employers and employees until it’s sold.
Maybe a worker doesn’t want the model home but a different one, Gilbert pointed out.
“If it’s spun off the model, that’s great,” he said.
Gilbert explained that some people don’t want to wait for a home to be built. They want to move into something that is available. Others will wait.
Rural Housing 360 works with employers and communities and helps guide employees from a USDA loan pre-approval process through moving into their home. The company has a portfolio of modular home plans. The homes are constructed at the business’s property in Martendsale, located about 10 miles south of Des Moines on Interstate 35.
The amount of time from a signed contract to moving is about 16 weeks.
Gilbert said in most cases Rural Housing 360 works with a housing authority or housing trust, an economic development group, the city or county as a third-party guarantor of a model home. Most often cities don’t want to be home owners, he added.
Another way of guaranteeing the model home is through rural electric cooperatives, telephone companies and even municipal utilities using their revolving loan funds, he said.
Rural Housing 360 asks for advocacy from the employers because it is building a tool it wants to use for mortgage approvals, Gilbert said, but added that in some instances employers are willing to financially contribute to the employee’s housing.
Gilbert started Rural Housing 360 after traveling with the state on a rural housing initiative for about six months. He has spent about two and one-half years researching the barriers to workforce housing and has visited more than 140 Iowa cities in 45 counties.
“After two and one-half years, this problem is rooted in financing,” he said last week.
The reason Rural Housing 360 does modular construction is the scarcity of contractors.
“The problem is, and it’s this way across the state, some communities have some of the contractors needed but not all of them. Some communities have none. And then we have a problem that a home can take six months or longer to build,” Gilbert explained.
“How we keep the cost down is not dragging the build out and front-loading the bill. Construction loan interest payments can really add up in a year. Our responsibility is to keep it as minimal as possible, and the only way we can do that is with modular,” Gilbert added.
He said that doesn’t mean Rural Housing 360 doesn’t want to work with local contractors.
“Once they understand our model, I think a lot of framers and contractors would like to have the idea of having a two- to three-week project to fill in for them, being able to complete a job in two to three weeks,” he said.
The website, ruralhousing360.com, is about four months old and already has about 400 accounts, Gilbert said. Those who sign up for an account are asked to identify themselves as an employer, public sector agent or an interested homebuyer.