This aerial file photograph from October 2015 shows the downtown area of Baldwin City at center with the Baker University campus to the north, at top.

A Lawrence housing nonprofit will be using $400,000 in funding from the Kansas Housing Resources Corporation to help 10 homebuyers find affordable housing in Baldwin City and Eudora.

Rebecca Buford, executive director of Tenants to Homeowners, said her organization usually receives funding that must be spent in Lawrence. However, it recently received a $400,000 allocation from the Kansas Housing Resources Corporation that is earmarked for use in Baldwin City and Eudora and will be split evenly between the two communities.

Buford said that in each community, the plan is to build three new houses and buy two existing ones. Tenants to Homeowners itself will build the three homes in Baldwin City, and it will partner with Lawrence Habitat for Humanity to build the new homes in Eudora. Each home will have a value of about $175,000.

The money from the Housing Resources Corporation will then be used to provide subsidies that will reduce the loan amounts for the first-time homebuyers who purchase these homes.

The homes will be sold to people who earn less than the area’s median income but are able to secure a home loan, Buford said, and the subsidies will reduce the amount of their home loans by $40,000 each. The idea is to get the monthly loan payment down to a level the buyers can afford — specifically, to 30% or less of their monthly income.

Under the program, the subsidy stays with the home should the homeowner decide to sell, Buford said.

“Our homeowners move on average every seven years just like everyone else,” Buford said. “What’s really cool is we control the resale price of the home because the subsidy stays with the house, so we will preserve it as affordable housing in Baldwin City or Eudora.”

Homebuyers keep the equity they build while paying off their houses, as well as 25% of the house’s appreciated value from the date of the sale, Buford said. Many first-time homeowners whom Tenants to Homeowners has served in Lawrence have later used their equity to buy larger homes, she said.

Buford said Tenants to Homeowners would build the new Baldwin City homes on infill sites it already owns in the community using contractors it works with in Lawrence. The agency has the money to start the homes, but Buford said work wouldn’t start until after the funding from the Housing Resources Corporation became available in the spring. The Baldwin City homes would range from two to four bedrooms and would have garages, Buford said.

“I’ll put the quality of our construction up against any contractor in the community,” she said. “We had the first gold-star energy-efficient homes in Lawrence.”

Tenants to Homeowners would look for homebuyers as the three new homes were being built, Buford said. There will also be workshops on the program and other community outreach efforts at that time.

Erika Zimmerman, executive director of Lawrence Habitat for Humanity, said the three new Eudora homes would be built on lots her agency owns on Stevens Street in north Eudora. They would be three-bedroom, two-bathroom homes, she said.

Habitat for Humanity keeps construction costs down by relying on volunteer labor and the sweat equity of future homeowners, Zimmerman said. That further reduces the amount of the homeowners’ loans, she said.

Habitat has its own outreach and homeowner recruitment program, and Zimmerman said the agency would look for program participants in the months ahead.

“We only have one Habitat home in Eudora, so we are excited about this opportunity to get back into that market,” Zimmerman said.

As for the four resale homes Tenants to Homeowners will buy, Buford said the agency would monitor available housing in Baldwin City and Eudora for good deals when the funding became available.