No Place Like Home: The Importance of Homeownership Programs in Community & Economic Development Presented by Hassan Nichol ás

Why you might never own a home…

South Los Angeles (Central) Median Household income $29,615 Median Household income $36,687 (LA) Did not complete high school High rent compared to income Get to work by bus

Median Household income $29,615

Median Household income $36,687 (LA)

Did not complete high school

High rent compared to income

Get to work by bus

79% White Collar 21% Blue Collar South Los Angeles (Central)

79% White Collar

21% Blue Collar

Build from the Ground Up Federal income assistance programs have focused almost exclusively on income support rather than asset creation . While asset development for the upper and middle classes has long been encouraged by the government, these opportunities are largely overlooked with low income families.

Federal income assistance programs have focused almost exclusively on income support rather than asset creation .

While asset development for the upper and middle classes has long been encouraged by the government, these opportunities are largely overlooked with low income families.

Role of Community - Based Organizations Individual development  Neighborhood development  Increase economic status of individuals, encourage to stay/invest in community Improve community conditions, improve opportunities for more growth.

Individual development  Neighborhood development 

Increase economic status of individuals, encourage to stay/invest in community

Improve community conditions, improve opportunities for more growth.

CFRC Opened doors in March 1993 as Los Angeles’ first public/private partnership Designed as a collaborative effort of 34 local area banks, the City of Los Angeles, and community leaders Response to a dismal report regarding community reinvestment activity in South Central Los Angeles, then LA County

Opened doors in March 1993 as Los Angeles’ first public/private partnership

Designed as a collaborative effort of 34 local area banks, the City of Los Angeles, and community leaders

Response to a dismal report regarding community reinvestment activity in South Central Los Angeles, then LA County

Mission & Vision CFRC VISION Recognized as the finest provider of wealth creation tools to historically underserved residents and small business owners. CFRC MISSION Create and enhance the economic wealth and capacity of the residents and businesses in disinvested areas of LA by delivering quality community development programs and facilitating collaborative efforts among business, the community and government. CORE VALUES CFRC’s goal is to provide the highest quality programs and services to our clients. At CFRC helping our clients achieve their goals is the cornerstone of our work.

CFRC VISION

Recognized as the finest provider of wealth creation tools to historically underserved residents and small business owners.

CFRC MISSION

Create and enhance the economic wealth and capacity of the residents and businesses in disinvested areas of LA by delivering quality community development programs and facilitating collaborative efforts among business, the community and government.

CORE VALUES

CFRC’s goal is to provide the highest quality programs and services to our clients. At CFRC helping our clients achieve their goals is the cornerstone of our work.

Macro Issues So many renters, not enough affordable homes at every income level High rent, harder to accumulate funds Shortage of single-family homes and other asset building opportunities

So many renters, not enough affordable homes at every income level

High rent, harder to accumulate funds

Shortage of single-family homes and other asset building opportunities

Why Promote Homeownership? Asset builder Wide positive impacts beyond the tangible Wealth creator Compliments existing programs Community Benefits Satisfies organization’s Vision, Mission & Values

Asset builder

Wide positive impacts beyond the tangible

Wealth creator

Compliments existing programs

Community Benefits

Satisfies organization’s Vision, Mission & Values

Homeownership is a viable tool … A psychological orientation toward the future; Increased residential stability; Improved health and well-being; Increases in civic and community involvement; and Decreases in the likelihood that future generations will be impoverished.

A psychological orientation toward the future;

Increased residential stability;

Improved health and well-being;

Increases in civic and community involvement; and

Decreases in the likelihood that future generations will be impoverished.

Micro Issues No Child Left Behind ( NCLB ) Act of 2001 Demand for teachers dramatically rising Recruitment and retention challenges Affordability gap worsened by soaring prices Pay rates in urban areas can’t keep pace with costs Increased requirements for certification, more difficult to find ‘highly qualified’ educators Aging workforce, growing urban population Benefits unknown to educators

No Child Left Behind ( NCLB ) Act of 2001

Demand for teachers dramatically rising

Recruitment and retention challenges

Affordability gap worsened by soaring prices

Pay rates in urban areas can’t keep pace with costs

Increased requirements for certification, more difficult to find ‘highly qualified’ educators

Aging workforce, growing urban population

Benefits unknown to educators

Profile 13% left within the first two years 32% left within the first seven years $35,500 average starting salary Would qualify for a $187,500 mortgage amount $469,000 average home price

13% left within the first two years

32% left within the first seven years

$35,500 average starting salary

Would qualify for a $187,500 mortgage amount

$469,000 average home price

Respond / Reaction Staff Knowledge, Skills, Capacity, Time, Sustainability Resources Facilities Leverage relationships

Staff

Knowledge, Skills, Capacity, Time, Sustainability

Resources

Facilities

Leverage relationships

Approach Education approach Preparation, Counseling, Make Homeowners, etc. IDA (Individual Development Accounts) Financial Literacy Brokerage Host Market Segmentation Regional, Neighborhood, Demographic, etc.

Education approach

Preparation, Counseling, Make Homeowners, etc.

IDA (Individual Development Accounts)

Financial Literacy

Brokerage

Host

Market Segmentation

Regional, Neighborhood, Demographic, etc.

Strategy Utilize existing networks Target educators and school employees Form partnership with schools Focus on homeownership education, awareness “ One-stop Shop” environment

Utilize existing networks

Target educators and school employees

Form partnership with schools

Focus on homeownership education, awareness

“ One-stop Shop” environment

CFRC Organization Needs Downsized staff Streamlined, efficient Income generating and/or self sufficient Programs that compliment each other Growth Replication Standard procedures Data collection, Surveys, Evaluations

Downsized staff

Streamlined, efficient

Income generating and/or self sufficient

Programs that compliment each other

Growth

Replication

Standard procedures

Data collection, Surveys, Evaluations

EMAP - Services Response to the affordability challenge and its impact on recruiting and retaining education professionals Collaboration with Los Angeles Unified School District (LAUSD) Unique public-private partnership that provides a one-stop shop of homeownership resources for LAUSD teachers and other qualified personnel.

Response to the affordability challenge and its impact on recruiting and retaining education professionals

Collaboration with Los Angeles Unified School District (LAUSD)

Unique public-private partnership that provides a one-stop shop of homeownership resources for LAUSD teachers and other qualified personnel.

Services ( cont. ) Workshops Prequalification/Debt Counseling Homeownership Expo LAUSD partnership Real Estate Partners/Referrals In-house mortgage brokerage IDA for homeownership program Down payment assistance/special program access

Workshops

Prequalification/Debt Counseling

Homeownership Expo

LAUSD partnership

Real Estate Partners/Referrals

In-house mortgage brokerage

IDA for homeownership program

Down payment assistance/special program access

Organization Requirements Know the local housing market Have a long time line Pre-purchase and post-purchase counseling Select your home-buyers Private-Public Partnerships, Relationships, etc.

Know the local housing market

Have a long time line

Pre-purchase and post-purchase counseling

Select your home-buyers

Private-Public Partnerships, Relationships, etc.

Organization Requirements ( cont. ) Brand & Reputation Brain Capital Facilities

Brand & Reputation

Brain Capital

Facilities

Understand specific needs of the community and resources for potential homeowners Predatory lenders? Subprime borrowers? Down payment assistance? Foreclosure Counseling/Mortgage Fraud? Have a strategy Know the Local Housing Market

Understand specific needs of the community and resources for potential homeowners

Predatory lenders?

Subprime borrowers?

Down payment assistance?

Foreclosure Counseling/Mortgage Fraud?

Have a strategy

What ’ s Your Timeline ? It takes time for a first-time homebuyer to purchase Homeownership requires discipline Must allow time for programs to help instill the self-sufficiency needed to purchase. Counselors must commit at least one year to program Establishing relationships takes time

It takes time for a first-time homebuyer to purchase

Homeownership requires discipline

Must allow time for programs to help instill the self-sufficiency needed to purchase.

Counselors must commit at least one year to program

Establishing relationships takes time

“ Hand - Holding ” Very least, agencies should help prepare clients for a loan application Work one-on-one with clients throughout process; even after close Provide clients with resources to more services, programs and information

Very least, agencies should help prepare clients for a loan application

Work one-on-one with clients throughout process; even after close

Provide clients with resources to more services, programs and information

Counseling Approach 8 and 12-hour comprehensive Saturday homeownership workshops Understanding Credit and Debt Getting a Mortgage Subordinate & Government Sponsored Financing Shopping for a Home Post-purchase Foreclosure Prevention Predatory/Abusive Lending Pre-qualification interviews Referral

8 and 12-hour comprehensive Saturday homeownership workshops

Understanding Credit and Debt

Getting a Mortgage

Subordinate & Government Sponsored Financing

Shopping for a Home

Post-purchase

Foreclosure Prevention

Predatory/Abusive Lending

Pre-qualification interviews

Referral

Flow Chart Model LATMAP Client workshop LATMAP partner Wait; Improve credit Pre- qual Close Home purchase Follow-up Referral; Info Session, website

You Can ’ t Save Everyone Not everyone will benefit from purchasing Clients should be motivated and be willing to sacrifice You must communicate realistic expectations Should not turn anyone down

Not everyone will benefit from purchasing

Clients should be motivated and be willing to sacrifice

You must communicate realistic expectations

Should not turn anyone down

Relationship Building Network of public-private relationships School district, an integral instrument Government housing agencies (State, County, City) Local Nonprofit agencies Going Digital

Network of public-private relationships

School district, an integral instrument

Government housing agencies (State, County, City)

Local Nonprofit agencies

Going Digital

Brand Name or Bland Name? Reputation Leverage nonprofit status build trust History & Track Record Presence, Community/Neighborhood Relationship Location, Location, Location Marketing Flyers, blog, website, message board, newspaper

Reputation

Leverage nonprofit status build trust

History & Track Record

Presence, Community/Neighborhood Relationship

Location, Location, Location

Marketing

Flyers, blog, website, message board, newspaper

It ’ s A Blog ’ s Life

Tap into Your Brain Capital Identify instructors Trained staff, local real estate professionals and bankers (volunteers) Availability of training, workshops, and certifications

Identify instructors

Trained staff, local real estate professionals and bankers (volunteers)

Availability of training, workshops, and certifications

Facilities Building Classrooms ? Computer Lab? Technology Access Centrally located Public transportation Parking Visible

Building

Classrooms ?

Computer Lab?

Technology

Access

Centrally located

Public transportation

Parking

Visible

What ( Ame ri can ) Dreams are Made Of… “American Dream” has changed Investment or Expense?

“American Dream” has changed

Investment or Expense?

Discussion Questions

Discussion

Questions

How does homeownership fulfill your community/agency/organization goal? What ideas have you brainstormed? What will be your next step?

How does homeownership fulfill your community/agency/organization goal?

What ideas have you brainstormed?

What will be your next step?