Friday, May 1, 2009

The Homebuyers Club

While many people want to blame the current housing crisis on programs that helped low income people become homeowners, they usually have no clue what a person has to do in order to become eligible for these programs. For the last fifteen years I have administered and taught a program called “Homebuyers Club.”
This program has helped over 550 families become homeownwers. I know it has changed lives. It has taken people out of ghettos and placed them in neighborhoods. It has made people change the way they think and the way they deal with money. It has made irresponsible people become responsible. It has given low-income people the skills that middle-income people take for granted. Most of the people in this program came from a background of generational poverty. It gave them the American Dream.

Below is a condensed version of an except from my annual HUD grant application. If you are with a non-profit agency or just someone that wants to create a program that helps lift people out of poverty, maybe this will help you design a program. If you want to be better informed of how low-income people become homeowners, I hope this helps.

Homebuyers Club
Homebuyers Club is an in-depth year-long program that combines one-on-one housing counseling and group sessions. It is in serving the Homebuyers Club clients where we use a lot of volunteers. Below are the important elements of this program.

The time element: The curriculum is one-year long but many clients stay in a Homebuyers Club for two to three years. Clients may enroll, drop out and reenroll several times. One can learn what one needs to learn about buying a house in an 8-hour workshop. However, if one has serious obstacles to buying a house, one cannot overcome those obstacles in a short time period. Spotty work history, poor credit, excessive debt, and changing bad habits, and changing attitudes take time. Learning money management skills and establishing savings takes time.

Combined one-on-one and group sessions. HBC members get both group sessions and one-on-one sessions. All HBC members get an initial one-on-one session called a “Front Door” at which time we evaluate the clients potential for homeownership and help the client develop an “Action Plan” designed to get the client from where they are at to homeownership. Most clients also get a follow up one-on-one session where we work on cleaning up credit, and another one-on-one where we help the client develop a written budget, and another session where we reevaluate the progress the client has made and develop a second Action Plan. Also one-on-one phone sessions occur with clients to discuss specific problems or to answer questions. Once a month, the client attends a one- and-half-hour group session.

Peer counseling and support. In a Homebuyers Club a group of 12 to 15 people bond and mutually encourage each other. The atmosphere of a Homebuyers Club more closely resembles that of an AA meeting or other self-help group rather than a typical home buying education workshop. Clients advise and encourage each other. They openly discuss their trials and battles and celebrate each others successes and triumphs. Sometimes the class may go off on a tangent and members may discuss how to deal with relatives that ask to borrow money or friends that belittle them for trying to improve their lives. If the class wonders off-topic, we allow it. The group counseling, peer support, and group bonding are important elements of what makes the Homebuyers Club a success. While the Homebuyers Club is a series of twelve workshops, it is much more. It is also a dynamic support group.

Expanded Curriculum. The curriculum covers all of the normal topics of a pre-purchase workshop, but due to the fact that our customers are from the lower end of the economic scale and many of them are moving from public or subsidized housing to homeownership and most of them are single mothers, we tailor our curriculum to address the special needs of our clients. Topics which may be covered in our class but that may not be covered in the curriculum of other housing counseling agencies are classes on getting child support, life insurance, basic banking, and being a wise consumer.

Relationship building. We become friends and mentors to our clients helping them with other issues they may face which affect their ability to become homeowners. We become a resource to help them with a wide variety of issues. Even after they become homeowners, many of them still call us for advice and referrals with both housing related issues such as refinance and home repair as well as referrals and advice on other issues such as taxes, insurance, child support, and employment and education. This post-homeownership relationship has kept some of our clients from defaulting on a loan or helped them avoid refinancing and getting a predatory loan.

Layered financing and grant assistance: In the WCO Homebuyers Club, we not only educate the client and help them get mortgage-ready but we work with the client to get the grants and loans and assistance they need to buy a home. One of the tools we sometimes use is we help the client accumulate funds in a matched savings program called Individual Development Account (IDA). Other programs may be products for people that qualify for specific programs such as Section 8-to-Homeownership. Another tool is partnering with another non-profits such as a church that will build a house for the client and the clients provides sweat equity. We search for the product that will help the individual client and get creative in developing the package of products to move someone into homeownership.

Staff Support: Much effort is expended on client retention. Prior to each club meeting or counseling session the client gets both a reminder card and phone call. The clients in this program often move and often change phone numbers. A constant effort is made to keep addresses and phone numbers current. A lot of rescheduling of sessions occurs. Also, many clients get discouraged and may start skipping class. When that happens we call the client and try to determine the problem and give them a pep talk. Another service we must provide to our Homebuyers Club members that would not have to be provided to clients in a typical homebuyer education program is child care. Most of our clients have minor children. Without child care, they could not attend the classes. This is an additional expense that most other pre-purchase counseling programs would not incur.

Holistic Approach/Other Services. While our clients are striving to get mortgage ready and achieve homeownership they may have other obstacles or needs that are either more immediate or are larger obstacles than can be addresses in our Homebuyers Club. We provide a broad range of services that are available to our Homebuyers Club members as well as other low to moderate income people. These services are provided here at the Woodbine Center. These services are not exclusive to HBC members and are not included in the budget of Housing Counseling Department, but many of our clients use these services. These services include the following:

o Volunteer Income Tax Assistance (VITA). Prior to membership in our HBC, our clients may have been accustomed to going to a commercial income tax preparations firm that charged them a high fee for a relatively simple income tax preparation, convinced them to get a “rapid refund” at a interest rate that may equal 500%, and then charged them for cashing the refund check. Not only are we providing them with a valuable service, but discussing income tax preparation in class gives us a change to discuss attitudes about delayed gratification, being a wise consumer, and interest rates.

o Child support advocacy. We discuss child support issues with our clients who are single mothers and will refer them to someone who can provide them with assistance in getting child support if they desire to pursue it.

o Job Resource Office. This is a partnership with Goodwill Industries and last year 290 people were placed in jobs, including some of our HBC members.

o GED. We have several students in this class. This is provided at our center in partnership with Metro Schools.

o Referral. In addition to services here at our center we routinely provide referrals to other social service providers.

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    1. This is great source of income. I will need to get more info of this.

    2. Are you sure you were or are a Republican? Helping others isn't traditionally the Repbulican way? Love the program, and I would add it's not the low income people who've been able to buy a house that has caused the problem. But, the public likes to kick the person on the bottom of the lady. More people at the top have caused the problem. Everyone I know who's lost their home, had financial problems, filed bankruptcy etc are white collar college educated people who had big bucks, but more bucks initially then brains. Most lived well above their means. Buying houses every couple of years, bigger and better in more prestigious neighborhoods, same mentality with cars and lavish vacations, and expensive clothes. Housekeepers, cooks, lawn services etc. They used all those idiot charge cards that come in the mail and pretty soon they're robbing Peter to pay Paul. They re-fiance and each time they do they get further in the hole. Many will say the banks said I could buy a home with no money down using 50% of my income as a guide; but they do have some responsibility in it. They didn't use their brains. Frankly, those people I don't have any empathy for. I do however have empathy for those living in poverty in the ghetto's or in make shift housing under a bridge somewhere. You might enjoy cruising through one of my other blogs...a homeless project

      I have some questions I hope you can answer. I came here initially today cause you appeared on my 125 exchange. I'm new to this. Yesterday it was generic...their page only except for one recurrent occupational blogger. I kept seeing either the ad for 125 or occupational blogger every where I went yesterday. Likewise the day before; which makes me wonder how often pages are placed? Makes me wonder when, how and where my 125 gets placed since the 2 I've placed on my page don't seem to show much?

      While here I dropped, naturally we're well acquainted through that.

      Also...wondered if I could ask about adding tweet before or after post, similar to the way you have digg and submit. Somewhere (can't remember which blog page), I found instructions. Wrote them down and did a cut and paste of the code to use. However, when I went to my html, I'm not able to find the codes the blogger indicated I should look for. Which I had here for you to see...but it won't let me publish it. Maybe you could offer info anyway?

      I've looked twice line for line through the code on my page. Would you look at your code and tell me if you have that on your page? I'm wondering if he gave wrong info, or if blogger blogs don't have that code? I'm trying to learn some of this stuff...but the learning curve sometimes is slow.


    3. Wanted to pop back in to say after you were on my 125 ad, it went to their ad again for about an hour? You're back on, thought you might like to know how much coverage you're getting? Still wondering though, as I've been several more blogs inbetween and most don't have an ad from an individual?

    4. Great post. I just wanted to let you know that you have some sort of a popover ad covering your blog every so often. You may want to check recent ads that you may have added.