The Durango City Council discussed what to do with money collected through in-lieu payments collected from developers Tuesday, and seemed to support a proposal to put the money in mortgage-assistance loans.

When developers build in Durango, they are required to provide a certain amount of "affordable" units, or else pay a fee in lieu. How many are required is determined by the scope of the project. They also may build some of the required affordable units and pay some of the fee.

Affordable-housing requirements apply only to wcommercial builders.

The council seemed OK with a proposal by Jennifer Lopez, executive director of RHA, who wants the first $300,000 raised from in-lieu fee payments to go to the group's mortgage-assistance program. The idea is that affordable housing is provided to the community somehow, Lopez said.

RHA has received one in-lieu payment from a developer so far in 2010, for about $15,000.

Lopez estimated RHA is about two to three years away from $300,000 in in-lieu payments.

RHA is a quasi-governmental organization formed in 2006 by an Intergovernmental Agreement. About 60 percent of its $500,000 annual operating budget come from the IGA partners - Durango paid $103,000, La Plata County paid $197,000, Bayfield paid $12,000 and Ignacio paid $4,600. The rest comes from grants and other awards.

RHA has $2 million in assets, with $845,000 of it associated with the Homes Fund, RHA's nonprofit arm. RHA set up the Homes Fund - with its own board of directors and financial adviser - in Aug. 2008 to get at grant money unavailable to RHA because of its status as a quasi-governmental entity.

RHA focuses its programs on families of four that earn less than $78,000 per year.

Last month, the group celebrated its 50th loan, and Programs Manager Julie Levy said no client has ever missed a payment.

She said that's because all loan recipients receive 14 hours of counseling and homeownership classes, which ingrain financial literacy, and because not everyone gets a loan.

Levy estimates that more than 500 people have walked through their doors, though only 50 have closed on homes through the program.

"We're very selective," she said.

gandrews@durangoherald.com