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Housing Our Communities, Inc.
Housing Our Communities, Inc., helped the Franklin family find a new home through an REO purchase.
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John R. Smith, President and Chief Executive Officer, Housing Our Communities
First-time home buyers needing affordable housing in Maricopa County, Arizona--a community hard hit by the nation’s worst real estate crisis in 30 years--receive help from Housing Our Communities (HOC). Now HOC’s work is serving as an example for other nonprofit organizations and lenders across the nation.
Over the last two decades, HOC has earned praise for an impressive toolkit of strategies that connect prospective homeowners to affordable homeownership opportunities. Now as Arizona struggles to emerge from recession, this statewide housing organization is using its experience and community partnerships to connect potential home buyers with lenders selling foreclosed and abandoned homes. The support HOC offers is impressive. More than 99 percent of households helped by HOC since its founding in 1988 have fulfilled their mortgage obligations and only four borrowers have lost homes to foreclosure.
From its headquarters in Mesa, HOC increases awareness of affordable housing options; provides home buyer education and counseling; and works to multiply the stock of affordable homes by acquiring and repairing abandoned and foreclosed homes for resale to low- and moderate-income home buyers, many of whom are first-time home buyers. HOC has helped more than 1,600 families find and buy affordable homes with individual prepurchase counseling and referral, home buyer and financial literacy education, as well as counseling and support after they buy homes.
In addition, HOC helps first-time homeowners by providing assistance with down payments and closing costs. HOC has provided more than $6 million in down payment assistance to home buyers who meet certain income requirements.
HOC’s experience in expanding first-time homeownership and developing partnerships with municipalities and counties across Arizona has helped the nonprofit organization become a leader in the effort to use REO properties to provide affordable housing. HOC provides housing services to eight of 10 Arizona jurisdictions that are grantees of the Neighborhood Stabilization Program (NSP). HOC has been awarded NSP contracts in Avondale and Mesa.
A History of Supporting Homeownership
Long before NSP was created, HOC was helping to turn vacant and foreclosed properties into affordable homes for clients through partnerships with municipalities receiving funds from the federal HOME Investment Partnership and Community Development Block Grant programs. HOC used funding from these programs to buy, rehabilitate, and resell houses to clients needing affordable housing and to educate, prepare, and connect families with sustainable homeownership opportunities.
HOC creates sustainable homeownership opportunities and helps stabilize communities in two critical ways:
Acquisition, rehabilitation, and disposition:HOC acquires vacant properties by selecting the ones that are most financially feasible for resale to low- or moderate-income homeowners. HOC rehabilitates the properties, improving major systems, appliances, and other physical issues, to ensure that home buyers do not immediately face significant repairs. Rehabilitated homes are guaranteed by a one-year home warranty. When ready for sale, HOC sells houses to low- and moderate-income families, typically qualified by requirements set by HOME, Community Development Block Grant, or NSP.
Preparing families for homeownership: HOC prepares clients to qualify for mortgage loans and to buy homes with financial and homeownership counseling. Families that complete training and are income-qualified typically receive assistance for down payments and closing costs and help in qualifying for affordable, fixed-rate mortgage loans. The training prepares home buyers to apply for mortgage loans and negotiate with banks and conventional mortgage lenders. HOC also helps families develop the financial discipline and homeownership skills required to become home buyers. HOC requires clients to attend education and counseling sessions after they buy homes and provides foreclosure-prevention and financial-counseling sessions as needed.
Ensuring Sustainable Homeownership
HOC is the lead agency for 14 nonprofit housing organizations working together as the Sustainable Home Ownership (SHO) Coalition. SHO was organized in 2008 with the help of the Local Initiatives Support Coalition office in Phoenix. The initiative’s formation was financially supported by Citi Foundation, Countrywide Financial, Fannie Mae, Local Initiatives Support Coalition, Wells Fargo Foundation, and Wells Fargo Home Mortgage. SHO’s mission is to develop sustainable homeownership by using REO in the greater Phoenix metropolitan area to benefit qualified home buyers.
SHO provides a way for local government agencies, REO servicers, and buyers to connect with partners experienced in providing affordable housing. The partners provide housing counseling, prepurchase education, housing rehabilitation, lending services, down payment assistance, and other services.
SHO Initiative Partners |
ACORN Housing |
Chicanos Por La Causa |
Community Housing Resources of Arizona |
Community Services of Arizona |
Desert Mission Neighborhood Renewal |
Greater Phoenix Urban League |
Housing Our Communities |
Labor’s Community Services Agency |
National Farm Workers Service Center |
Native American Connections |
Neighborhood Housing Services of Phoenix |
Neighborhood Housing Services of Southwestern Maricopa County |
Newtown Community Development Corporation |
Habitat for Humanity Central Arizona |
By the end of July 2009, SHO partners helped 337 families buy homes, and of those, 297 bought REO houses; the rest acquired homes through short sales. As more NSP funds become available, HOC and SHO partners expect to buy additional REO properties from mortgage-service companies and to rehabilitate and sell the properties to homeowners. Meanwhile, HOC and SHO members remain committed to educating and empowering prospective home buyers, so they can buy homes directly and arrange to hire contractors to do whatever rehabilitation work is needed.
Though focused primarily on helping consumers, SHO and HOC also work with financial institutions to help them sell REO properties and make mortgage loans to the nonprofit organizations’ clients.
SHO members provide a variety of services, including:
- Home buyer education and financial fitness education approved by the U.S. Department of Housing and Urban Development.
- Real estate support and services, provided by licensed Arizona real estate agents who agreed to work with prospective SHO home buyers.
- Support for lenders and servicers of REO properties, to prepare them to work with prospective home buyers.
- Lending and loan resources, including conventional 30-year, fixed-rate mortgage products and special, first-time home buyer products, Federal Housing Administration 203(k) products, and U.S. Department of Veterans Affairs loan products.
- Access to individual development accounts to help potential home buyers accumulate savings for down payments and closing costs.
- Rehabilitation services by licensed general contractors and subcontractors.
- One or more of the coalition members are working with all 10 jurisdictions receiving NSP funds in Arizona.
Recording REO Sales
An important part of HOC’s work with SHO is developing a system to track sales of foreclosed and REO properties. Initiated by HOC in 2008, the database will retain data on REO sales, including the property address, seller, purchase price, mortgage lender, first and second mortgages, and the income of buyers. The database will track the progress of community stabilization efforts, the participation of lenders and financial institutions, and how homeowners fare over time. This information will be used to provide reports to funding organizations and NSP grantees, as well as to help HOC strategically plan future community stabilization efforts.
The database, along with HOC’s proven services, skills, and collaboration efforts, positions this nonprofit organization to lead, support, and expand community stabilization efforts across Arizona and to serve as a role model for nonprofit organizations across the nation.
For more information, e-mail John R. Smith.
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