Mortgage hikes force Elburn’s Fox Pointe subdivision developer to ask village to scale back homes

Lennar Homes, the developer of Elburn’s newest subdivision Fox Pointe, has requested an amendment to the annexation agreement that would allow for smaller homes that would fall below the minimum required square footage for two-story homes.

Lennar Homes representative Rick Murphy, who attended Elburn’s Committee of the Whole meeting Monday to discuss the request with the Village Board, explained the reason for the proposed changes.

Murphy said recent interest rate hikes have increased the rate on mortgages from 3% to 6%, raising the average monthly mortgage payment by an extra $500 to $600 with an associated loss in purchasing power of about $100,000.

“We’re cutting a lot of folks out of the market,” Murphy said. “The person who came in at the end of last year all of a sudden doesn’t qualify anymore.”

The two smaller models that come in at below the 1,650-square-foot minimum spelled out in the annexation agreement are 1,517 square feet and 1,635 square feet. The lot sizes would stay the same. The proposed amendment does not change the amount of open space, increase density or rearrange blocks or streets, Murphy said.

He said the entry point for these models might be something like $360,000 to $370,000.

“It’s very hard to build affordable housing right now,” Murphy said.

He said Lennar has done something similar in Hampshire.

Trustee Sue Filek said the models look like stand-alone townhomes.

“I could see people wanting that size and having your own walls,” she said. “It’s a nice floor plan.”

Trustee Ken Anderson wondered whether existing residents might have an issue with the newer models being built next to their somewhat larger homes.

Murphy said he didn’t see that it would be a problem.

“There’s something for everyone,” he said. “We’re all in the same range.”

All of the trustees were open to the change in the annexation agreement. The next step will be to conduct a public hearing on the amendment.

The Fox Pointe subdivision is located east of Route 47 and north of Route 38.