This place we call home... Durango,
La Plata County, Colorado USA on Planet Earth

A BLOG about what's happening around Durango (and a little about real estate) by your LOCAL GUIDE, Jim Wotkyns, Broker at The Wells Group.

Financing Options Using Assets as Income

January 31st, 2020

For homebuyers entering their golden years, who may not have a steady income stream from working, both Fannie and Freddie allow access to retirement-related funds and assets for use as income.


Recent changes to Freddie Mac’s (FHLC) guidelines have made this the more optimal of the two programs, but this general overview might be helpful in picking and choosing which might work best for you. Often the asset stream is used to augment another source of income for a borrower who has accumulated sufficient assets, such as a retirement or pension allowance, disability or social security. However, if the assets are sufficient to cover the necessary debt to income requirement of 50%, that is perfectly acceptable.


The typical Borrower is older, maybe liquidating a larger house and downsizing or relocating, and has accumulated life assets through employment over a career, but is now no longer working. Often, these borrowers have not yet begun taking in social security and have not yet set up a regular, periodic draw down of a specific asset to be used as a monthly “annuity”.


Fannie Mae’s guideline:

  • The asset that is able to be used is any of a lump sum severance, retirement package, a work-generated 401K or IRA, a Keogh, or a SEP, or a liquid brokerage account consisting of cash, stocks, bonds, and mutual funds. NOTE : lump sum monies held in escrow for things like a lawsuit settlement, insurance claim, lottery winnings, inheritance, divorce proceeds, or sale of real estate,  or some form of non-work related account are NOT eligible assets to be used as income.
  • To calculate income, FNMA will first deduct any penalty that the borrower would incur to draw out any funds from this account. After that, any funds from this source that are needed to complete the transaction will be deducted. Finally, 70% of that remainder is the amount of the money that can be used, if the money is in the equity or bond market (cash holdings do not have this penalty as it is not subject to market fluctuation). This is obviously very conservative as a calculation but FNMA still opts to do this.
  • Once the net of assets has been calculated, you divide that by the number of months in the loan, and the result is your usable monthly income
  • The only additional restrictions are that the borrower must have unrestricted use of the funds OR if the assets belong to a spouse or parent, that party must be on the loan. If the borrower is 62 years of age, the max loan to value is 80%, but FNMA does allow for borrowers of any age to do this, max LTV is 70% if the borrower is not 62.
  • Loan is eligible for purchase and rate and term refinances, primary and second home only – no investment property


Freddie Mac’s guideline differences:

  • At least one borrower on the loan must be 62 years of age
  • You may use 100% of the net asset (this is the big one – the study of market fluctuation reveals that historically nobody in our lifetime took a 30% haircut on assets by having them exposed to the securities markets so the 70% was eliminated – hopefully FNMA will follow suit)
  • Instead of dividing by the loan term, all net eligible assets are divided by 240 months and that is the calculation needed, even if the loan is for 30 years.
  • Max LTV is always 80%


Source:  Garrison LaMothe – Managing Partner / Residential Mortgage Loan Originator at Affirm Home Loans, LLC     (NMLS #54477)




Ride the Rockies Cycling Tour will start in Durango June 14, 2020

January 13th, 2020



In its 35th year, The Denver Post Ride the Rockies Cycling Tour will start June 14 in Durango. After a 418-mile clockwise loop that will feature 28,484 feet of climbing, the non-competitive ride that features 2,500 participants will finish in Durango on June 19.



On June 14th, riders on a 73-mile loop starting and ending in Durango with a pass through Ignacio, Bayfield and Vallecito.  The second day will travel from Durango to Cortez for a 69-mile ride that will pass through the entrance of Mesa Verde National Park. The third day will be a 100-mile ride, the longest of this year’s tour, from Cortez to Norwood with a climb over Lizard Head Pass. On Day 4, it’s a day to regain strength with a 40-mile journey from Norwood to Ridgway before a Day 5 loop of 50 miles that will begin and end in Ridgway. The final day will travel from Ridgway to Durango with a journey over Red Mountain, Molas and Coal Bank passes.


More details:



Property Insurance – Townhome vs. Condo

January 9th, 2020


The difference between a Townhome and a Condo from an insurance point of view is sometimes confusing for new buyers.  In simplest terms, a Townhome is where the owner is responsible for maintaining, repairing and thus insuring the ENTIRE structure where a Condo is where the owner is only responsible for maintaining, repairing and insuring the interior of the structure.  Unfortunately, there are many variations between these two options, so it is important to read and provide your Restrictive Covenants (CCR’s) to be sure that your policy is written correctly.


Source: Ben Frihauf  – Farmers Insurance in Durango, Colorado



VA Loans – no upper loan limit starting in 2020

December 13th, 2019


Coming soon…no upper loan limit on VA mortgages as of January 1st, 2020. And, Purple Heart recipients are now exempt from paying the VA loan funding fee the same as those who receive or are entitled to receive VA compensation. Call me at 970-375-7005 if you have VA loan eligibility benefits and would like to discuss home ownership.



Rental rates stay high in Durango, although slower to rent

December 5th, 2019

Recently report by The Durango Herald, the City of Durango has permitted 207 homes on average each year from 2017 through this year, but despite the new construction, rental prices have not come down.  A study earlier this year found the cost of renting two-bedroom homes in Durango rose 20% in four years to $1,400 per month, according to Region 9 Economic Development District of Southwest Colorado.


The new affordable housing complexes include 36 apartments near 32nd Street (phase 2 of Lumien Apartments), 53 units of senior housing under construction in Three Springs and a 40-unit complex planned for Durango’s west side to serve the community’s poorest residents.  Many new multifamily complexes going up in town are non-subsidized projects, such as Rocket Pointe, a complex of about 190 apartments between Walmart and The Home Depot, and those units slowed the rental market a bit even though rents have not come down, landlords said.



Durango – “Hallmark” winter wonderland

December 5th, 2019

Durango is making national news because of our “Hallmark” winter wonderland.  Take a look at The Washington Post’s excerpt,


“Welcome to Durango, a town so lovely in the wintertime that its website says it could be the best time of year to visit. You see this from the moment you arrive. In the background: the San Juan Mountains under a blanket of snow. In the foreground: cozy locals bundled up in lounge chairs around fire pits enjoying the après-ski scene. You nestle in with them, doing your best to blend in while also standing out to a potential “special someone.”


After your afternoon on the slopes, or on a ride on the Polar Express vintage steam train (yes, Santa is onboard), mosey over to food-and-drink court 11th Street Station or the bar El Moro for more opportunities to meet your soul mate. If that doesn’t pan out like you and Hallmark hoped, try Noel Night on Dec. 6. Everyone in town comes out for the evening, where shops offer food, wine, games and discounts.”


Entire article:




THE POLAR EXPRESS and CHRISTMAS TREE TRAIN dates are available online at





Durango Airport Airfare Club and Non-stop flights from Houston

December 5th, 2019





United Airlines will add a winter nonstop flight on Saturdays between Durango and George Bush Intercontinental Airport in Houston starting January 11 until March 28.  Houston is one of Purgatory’s biggest feeder markets, which flows over into real estate sales. The economic impact of non-stop service from Houston expands through our entire region.  Approximately 78,000 passengers used the Durango-La Plata County Airport in 2018.


There is now a Durango Airport Airfare Club, which is a free service to anyone who signs up, that Community Flights is contracted to identify low airfares it has discovered from DRO to any other airport, domestic or international, and sends out once-a-week alerts by email.


Sign up online at  under “Flights & Airlines,” click DRO Airfare Club in the drop-down menu.




FHFA loan limits to increase in 2020!

November 27th, 2019

The Federal Housing Finance Agency announced 11/26/2019 that it is raising the conforming loan limits for Fannie Mae and Freddie Mac.  In most of the U.S., the 2020 maximum conforming loan limit will be raised to $510,400, up from 2019’s level to $484,350.






Colorado Outdoor Recreation Search and Rescue (CORSAR) Card

November 20th, 2019


For almost two decades, I’ve volunteered for La Plata County Search and Rescue to be on-call 24/7 to use my knowledge of the high country to assist with rescue missions all around SW Colorado.


Colorado residents and visitors are well served by dedicated volunteer search and rescue teams. By purchasing a Colorado Outdoor Recreation Search and Rescue (CORSAR) card you are contributing to the Search and Rescue Fund, that reimburses teams for costs incurred in search and rescues activities across the State of Colorado. The CORSAR card is available for $3 for a one-year card and $12 for five-year card.


The CORSAR card is NOT insurance and does not reimburse individuals nor does it pay for medical transport.  The Search and Rescue fund (SAR) was created to reimburse political subdivisions and search and rescue organizations for the costs incurred in conducting search and rescue operations; and to provide funding for the purchase of search and rescue related equipment.


More info and to purchase card online:



Durango market compared to other Colorado mountain towns…

June 24th, 2019

Stats released at the Durango Area Association of Realtors quarterly meeting last week indicate the BIG winter of 2018-19 had an impact on mountain communities real estate markets. Unless homeowners absolutely had to buy or sell, they were preoccupied keeping up with the snow or enjoying the snow, not listing their home and house-hunting. In La Plata County, we are expecting a strong summer this year after the 416Fire last summer put a damper on our market.
















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