While helping homebuyers, an organization gets a LIFT

Dan Ellis, executive director, Neighborhood Housing Services of Baltimore

Challenge: Neighborhood Housing Services (NHS) of Baltimore, revitalizing neighborhoods through homeownership opportunities since 1974, recently increased its focus on lending as a line of business. The LIFT program — Let's Invest for Tomorrow — challenged us to deliver a high volume loan program and helped us meet a higher standard.



The LIFT program, a collaboration among Wells Fargo, NeighborWorks America and NHS of Baltimore, provides forgivable down-payment assistance loans of $15,000 to qualified borrowers. Before the program came to Baltimore, NHS was a low-profile organization. When NHS learned we would be responsible for administering 300 loans, a large number for an organization of our size, we knew our performance on this project would establish a reputation for the organization. We made a commitment to make it a good one. In the end, LIFT allowed us to make homeownership achievable for 300 families and individuals like Devin Lee, a truck driver and father of two. Without LIFT, Lee and the other LIFT buyers might have left the city to purchase homes they could afford; now they can remain here, invest in our city and raise their families in Baltimore.

The LIFT program came at the perfect time for NHS, just as we were poised for growth and when there were no competing programs in our area. It helped put us on the map in the lending and real estate communities and challenged us to stretch to meet the program's goals.

Over the 18 months that it took to close all the LIFT loans, we created economic growth through homeownership for 300 families in Baltimore, which in itself was a major accomplishment. The program had an additional benefit, however, in that it enabled NHS to improve our infrastructure, establish powerful partnerships and increase our bottom line.

In the past, our technology systems were adequate, but we needed improvements to handle the increased caseload, accounting and reporting. LIFT's operational funding provided us $25,000 to upgrade our systems – servers, computers, software – across the entire organization, which benefited us beyond the LIFT program; they enable us to function efficiently in the 21st century. In addition, LIFT provides tools such as the DataSafeCube, a database that allows people in the organization and our partners to see and share information on each loan and send alerts if action needs to be taken.

While NHS had never successfully applied for Community Development Financial Institution (CDFI) funding because it required a match and evidence that an organization could handle a robust volume of loans, the LIFT program changed our qualifications. We were able to consider the LIFT capital money for the match and had the loan volume to submit a competitive application. NHS was awarded $847,000 in our first round of funding and $1.5 million in the second. We now have tangible, measurable results to show, which we have leveraged for other successful grant applications.

LIFT also increased NHS' visibility among lenders and real estate agents. We are known as an organization that delivers and we're getting more referrals because our partners trust us.

We expanded our staff and now we see 1,000 homebuyer education and counseling customers a year, up from 300 pre-LIFT, because of the requirements of Maryland and Baltimore City homebuyer incentive programs for one-on-one counseling in addition to group education. We began charging for our classes, first $50 and eventually $100. We've seen no decrease in customers and now have an additional funding stream to support our counseling operation. This year, homebuyer education fees will result in $100,000 in revenue, directly attributable to LIFT.

The benefits of LIFT extend beyond the life of the program. For example, our financial coaching program, Fast Track, is now managed by one of the temporary people we hired for LIFT. Upon completion of the six-month Fast Track program, participants' credit scores increase by an average of 62 points and their average savings increase by $3,200. Sixty-four individuals have graduated from the program and have purchased or are in the process of buying a home.

Overall, LIFT is an extremely high-volume, fast-paced undertaking. At the launch event alone, 100 people had contracts on a home and were planning to close within 45 days. We needed to be equipped and ready to handle that volume.

The lessons learned through the LIFT program include:

• Technology upgrades are a necessary expenditure for program success.
• Partnerships can be leveraged to raise funds and expand the reach of our programs.
• Expanding our capacity during LIFT made us more effective at what we do — helping people become homeowners.