Getting your house in order: financial literacy by community design

Peg Malloy, Executive Director, Portland Housing Center

Challenge: In 2010, the Portland Housing Center saw a 50 percent drop in the proportion of African Americans using our homebuying services compared to other demographics. We needed to find a way to bridge the gap with that group.



The mission of the Portland Housing Center (PHC) is to provide access to homeownership through education, counseling and financial services. While PHC services are available to all first-time homebuyers, particular attention is given to communities traditionally left out of home ownership, including African Americans. They are among PHC's target populations, with a homeownership rate in Portland of only 35 percent, compared to 65 percent for white households.

In 2010, we saw a 50 percent decrease in the percentage of African-Americans who used our services to purchase a home compared to other demographics. At the time, the Obama administration had instituted the first-time homebuyer tax credit, which drove increased homebuying for all groups served by PHC – except African Americans.

Concern over this increasing gap led to a series of focus groups with African American customers and potential customers to better understand the problem. When African American participants asked for a more private forum to discuss culturally-specific financial concerns, we started Getting Your House in Order, a financial literacy class created by and for African-Americans. The class is now one piece of PHC's homebuyer preparation services, which also includes one-on-one counseling, homebuyer education, financial education classes and down payment assistance.

To develop the class, PHC contracted experts in the African American community and convened an African American advisory committee to oversee the creation and marketing of the class.

In the early days of the project, we sought customers through a partnership with one of the largest African American employers in Portland. By advertising the class as an employer benefit, we were able to reach participants for the early classes and build momentum. The majority of new participants came from word of mouth referrals from friends and family.

Since starting the program, over 230 households have completed Getting Your House in Order. Over the same time period, there has been a 69 percent increase in new African American customers, and an 86 percent increase in African American home purchases compared to 2011.

In a recent evaluation, we discovered that homeownership is just one positive outcome of the course. Even those who have not yet achieved homeownership say they make better financial decisions and feel more empowered.

For example, of the customers who had been out of the class for over one year, the number of respondents who said they "usually" or "always" contribute to savings or investment accounts, increased 150 percent following the course. The number of survey respondents who reported "never" using a budget decreased from 49 percent prior to the class to zero at present.

"I used to have anxiety attacks about money," said one of the participants. "I don't have those feelings any more. I don't feel out of control, or that I will be out in the streets. I don't lose sleep over financial things."
PHC plans to use this successful model of engagement with the African American community by training people in other community organizations to educate more African American being left out of homeownership. The experience taught us that:

1. Community engagement is key to successful outcomes.
2. Employer partnerships can be a valuable outreach tool in reaching target customers.
3. Evaluation is an important component of any program and should be planned early on.