models & resources supporting native homeownership, homebuyer education overview november 18,...

Models & Resources Supporting Native Homeownership,

Homebuyer Education OverviewNovember 18, 2013

Presentation Overview

•Coalition survey results regarding homebuyer education

•Types of homebuyer education

•Resources for homebuyer education 2

COALITION SURVEY RESULTS 3

Survey Methodology

• Online survey sent in June 2013 to 73 stakeholders including:• Tribal leaders, • Tribally designated housing entities, • State and federal representatives, • Lenders and Native CDFIs, • Nonprofits, and others

• 42% response rate4

Obstacles to homeownership in Native communities

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1. Homebuyer readiness of clients (70%)2. Infrastructure delays (66.7%)3. Lack of local lenders (60%)3. Lack of housing inventory (60%)4. Hard to get construction financing (46.7)5. Hard to access land (43.3%)

Top three obstacles to homebuyer readiness

Bad credit – 83%

Lack of credit history – 57%

Lack of info about process – 47%

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Top things Native homebuyers want to know more about

Home buying process – 89%

How to repair credit – 78%

How to obtain and understand credit report – 47%

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How tribes can support homeownership

Make homebuyer education mandatory for housing benefits – 50%

Offer homebuyer ed/credit counseling an employee benefit – 48%

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TYPES OF HOMEBUYER EDUCATION

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Discussion Question

What types of homebuyer education do you provide?

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Homebuyer Education Classes

Pros• Provides overview of

home buying process• Helps client understand

affordability• Improves client’s ability

to maintain a home• Provides guidance on

how to manage a mortgage

Cons• Difficult to get families to

attend• Need instructors who

understand home buying process

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One-on-one Homebuyer Counseling

Pros• Provides clients help

with each of their individual situations• Helps client to navigate

through the home buying process• Keeps client engaged in

the process

Cons• Not as cost effective as

group classes• Takes more staff time to

deliver

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Credit Counseling

Pros• Helps clients to manage

their credit more effectively• Provides client with a

plan to improve credit score• Helps clients get out of

financial troubles• Improves loan product

options and terms

Cons• Some clients may not

feel comfortable discussing financial their financial situation with counselors• Takes a long time• Must be delivered by

trained personnel

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Financial/Credit Coaching

Pros• Helps clients reach self-

directed goals• Customized to each

client• Client-paced• Provides accountability• Addresses behavioral

economics

Cons• Expensive to administer• Clients may not

understand what coaching is• Takes strong

commitment from clients

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Basic Financial Education

Pros• Helps clients learn basic

banking skills• Provides foundational

knowledge• Explains the basics of

managing credit

Cons• Difficult to get clients’

attention until they are in trouble• Must have trained

personnel

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Individual Development Accounts

Pros• Establishes savings

habits• Helps clients prepare for

homeownership• Matched savings for

mortgage downpayment

Cons• Expensive program to

administer• Difficult to find flexible

match funds and operating funds

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HOMEBUYER EDUCATION RESOURCES

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HUD Funding Sources

ONAP Programs• NAHASDA Indian Housing Block Grant (IHBG)• Administered by Tribe or TDHE

• Indian Community Development Block Grant (ICDBG)• Competitive by ONAP region

“Big” HUD Programs• Resident Opportunity Self Sufficiency (ROSS) grants• Comprehensive Housing Counseling Grant• Must be HUD Approved Housing Counseling Agency

• Neighborhood Stabilization Program18

Rural Development Funding Sources• 502 Loan Packaging• Provides staff training

• Rural Community Development Initiative (RCDI)• Matches funding of an intermediary to provide homebuyer

education

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SDHDA Administered Sources

• HOME – for homeownership development subsidies

• Homeownership Education Resource

Organization (HERO)• Serves as an intermediary in the state for:• HUD Housing Counseling • National Foreclosure Mitigation

• First-time Homebuyer Program• Down payment assistance

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Ways to Build Staff Capacity • NeighborWorks America www.nw.org• Training scholarships through NeighborWorks affiliates

• National American Indian Housing Council www.naihc.net• Training for NAIHC members and their partners

• Native Community Development Financial Institutions (CDFIs)• Can contract or partner with them to deliver homebuyer

education

• SDHDA Homeownership Education Resource Organizations 21

Native Curricula

• Building Native Communities: Financial Skills for Families financial education curriculum. Contact Oweesta at (303) 774-8838 or www.oweesta.org

• Pathways Home: A Native Homeownership Guide. Contact National American Indian Housing Council at 202-789-1754 or www.naihc.net. Covers:• The mortgage loan process• How to prepare a family budget• How to improve credit profiles• How to avoid the pitfalls of predatory lending• How to maintain a home and finances after purchase

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Individual Development Accounts

• US Department of Health and Human Services (HHS) Office of Community Service (OCS)• Assets for Independence (AFI) funds IDA matches

• HHS Administration for Native Americans (ANA)• Social and Economic Development Strategies (SEDS)

• Joint OCS/ANA• Native Asset Building Initiative (NABI)

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Questions or comments?

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