Part of NeighborWorks America's mission is ensuring that people can be safely and securely housed. But inequities have made barriers to housing — and to homeownership — especially difficult to surmount for people of color. That's why in 2022 NeighborWorks introduced a new grant, "Accelerating Homeownership for People of Color," with the help of Fifth Third Bank.
The goal, according to National Homeownership Programs & Lending staff, is to support organizations that are already successful in helping people of color find homes, giving them the chance to explore new programs and to share what's already working with others in the NeighborWorks network.
"We want to help the network to continue to innovate as thought leaders in this space," says Brooke Linkow, senior manager, National Homeownership Programs & Lending. The grant cohort of 17 organizations gathered online and shared some of their insights.
As housing prices have skyrocketed, interest rates have risen. And as the number of available homes has decreased, families began to feel homeownership growing further out of reach, shares David Paul, specialist, National Homeownership Programs & Lending. This sentiment is backed up by last year's National Housing and Financial Capability Survey.
"One of the biggest insights of the group has been identifying different ways they've kept people connected to services, even when it doesn't feel realistic to buy a home," Paul says. That includes expanding financial planning workshops and hosting resource fairs that bring clients, real estate professionals and lenders together. "These things help maintain optimism and help households work toward their goals."
The 17 network organizations aided a total of 8,227 clients in 2022, with 6,089 of those clients identifying as people of color. The cohort also created 961 homeowners.
Linkow expects the rest of 2023 to be a year of exploration, as groups "build on their current work and try out some of the promising practices they've heard from peers."
Helping clients through the ‘last mile'
Urban Edge, a Massachusetts network organization that engages in everything from rental homes to kindergarten readiness to digital literacy to homeownership, has one of those promising practices. The organization is using the Accelerating Homeownership grant to focus on one of its newer programs, known as the Last Mile Fund.
In 2022, more than 600 people graduated from Urban Edge's first-time homebuyer classes, says Bob Credle, director of Community Programs. Staff ran programs in three languages: English, Haitian Creole, and Spanish, and they also hosted classes about credit. For Urban Edge, 75 to 80% of clients are people of color. But even as clients graduated, Urban Edge staff recognized that despite preparation, hopeful homebuyers were having a hard time pulling together all they needed for homeownership — particularly with the tight market and rising housing costs.
NeighborWorks' grant is helping the organization provide down payment assistance. It also helps residents who purchased a home but ran into unexpected expenses that kept them from moving in.
Gercide Luc, associate director of Community Programs for Urban Edge, recalls a client who purchased a property that had issues with both termites and lead. Funds from the grant helped remediate both. Another client used the funds to help with her down payment. "It was a big hurdle when the purchase price — and mortgage payments — increased," Luc says. "We also have a severe housing shortage. Our clients can't find homes and the ones they do find are in serious disrepair. They don't have enough funds to fix them."
Credle recalls a client who was ready to buy, but whose desired home needed a new roof, which came with a price tag of $11,000. "We used $7,000 from the Last Mile Fund for roof repairs. This fund is like a godsend."
Michael Rosseau, director of Resource Development, calls the Last Mile Fund "one lever in a series of levers" for clients. Their hope is that the fund will result in 75 new homeowners — and that more funders will help expand the program. "It's difficult to forecast with high interest rates and the housing stock," he says. "But we have people who tell us that if not for the Last Mile Fund, they would not have closed."
Frst-generation American families, especially, need the support because they may not have as many resources, he adds. "They need a trusted source to help them through."
Frandys is a good example. Originally from the Dominican Republic, she's lived in Boston since she was 12 years old. As a young person, she didn't receive much financial guidance on building credit, she told Urban Edge. So she took a first-time homebuyer class at the nonprofit — twice — and taught her husband what she learned. As they neared the finish line, The Last Mile Fund helped with a cash down payment.
"Every time I wake up in this house, I still can't believe it's mine," she says.
Educating clients, paying down debt
Linda Marin, director of Homeownership for cdcb | come dream. come build. says her organization focuses on homebuyer education and often talks with clients about credit, guiding them as they make decisions. "We tell them to set three goals at a time. Any more than that and they might be overwhelmed. We guide them to choose and decide what to tackle first: paying down credit or paying down debt. Then we move to saving."
Once clients have their credit and savings in order, cdcb pairs them with a counselor in the organization's financial security program. From October 2021 through September 2022, cdcb met with 723 new clients on a one-on-on basis for homeownership. NeighborWorks' Accelerating Homeownership grant helped fund the one-on-one training, along with outreach in a very rural community along the Mexico–United States border. The training helped families learn what was possible.
Counselors help ready clients for homeownership, including a home through the Mi Casita program. The Mi Casita homes are disaster-resistant, modular homes, designed for rural families. They're accessible for communities with modest incomes, including communities of color. "The need for homeownership is great," Marin says. "This is a way to get them into a home faster and more efficiently."
Claudia Kowalski, senior housing counselor at cdcb, says her division saw 72 clients during the month of February alone. "Our numbers are going up," she says. "We establish a plan and budget to target their needs."
She describes her work with one couple who bought a home last year. They live on a fixed income, she says, and when they first started working with cdcb, the woman in the family didn't have a credit score. Plus, they had debt. "They had signed a car loan for their daughter," Kowalski says. "Even though the daughter was the one making the payment, it is listed as their debt. But that is typical with our community. It's how Hispanics are; We like to help everybody."
As they helped their daughter pay down debt and improved and established credit, the couple settled on a modular home, which can be expanded if they choose. "They are thrilled they're buying this home," Kowalski says.
The Accelerating Homeownership grant is doing just what it's supposed to be doing, Linkow and Paul explain. Already, network organizations are reporting on what's working. NeighborWorks leaders are looking forward to continuing to share those programs — and to seeing what the organizations come up with next.
06/08/2023
