Homeownership - NY Times - Faith-based programs boost homeownership

*
Published in the New York Times, Sunday, May 28, 2006

May 28, 2006

In the Region
Today, Homeownership Is Next to Godliness

By LISA PREVOST

MARGUERITE WILLIAMS always wanted to own a home in Bridgeport, Conn., the Fairfield County city where she grew up, but it took a gentle nudge from the pastor of her church to move her out of her rental rut.

It wasn't a lack of money that held her back — she works in admissions at Southern Connecticut State University —as much as a lack of information. A widow for more than 20 years, Ms. Williams feared that someone would talk her into a bad decision, or that the cost of keeping up a property would be more than she could handle.

Last year, however, after attending a church-hosted orientation on home buying, Ms. Williams followed up with a volunteer financial counselor, who worked out a step-by-step plan for resolving her credit issues and applying for a mortgage.

"They showed me I could almost do the same thing purchasing as renting," Ms. Williams said in the four-room co-op she bought for $54,000 at Seaside Village Homes, a community of green-shuttered brick houses a few blocks from Seaside Park in Bridgeport. "Once you start going through it, you find, 'Ohhh, it's not as hard as I thought it was.' "

Churches serving minority communities throughout the region are reaching out to people like Ms. Williams who, though perhaps financially capable of buying a home, are unsure how to go about it.

In the past few years, Freddie Mac, the federally chartered financier of mortgage loans, has joined with churches, community development corporations and lenders to initiate faith-based efforts aimed at increasing rates of minority homeownership in Bridgeport, Queens and central New Jersey.

While the homeownership rate for the nation as a whole is approaching 70 percent, according to the Bureau of the Census, fewer than 50 percent of African-American and Hispanic families own their own homes.

Surveys and focus groups conducted by Freddie Mac show that a primary cause of the gap is uncertainty within minority communities about whom to trust in the home buying process, said Craig Nickerson, vice president of the corporation's Expanding Markets division.

"We needed to find an emissary they trust to help them take the first step, and we found it to be the faith community," he said. Members of the clergy involved in the initiatives vigorously preach the virtues of self-sufficiency and the financial benefits of homeownership at Sunday services, an aspect of their ministry that they say is critical to stabilizing their communities and halting generational cycles of poverty.

"For a church not to deal with the economic plight of its people is a dereliction of its responsibility," said the Rev. Mitchell Taylor, pastor of Center of Hope International and chairman of the East River Development Alliance (ERDA), a nonprofit organization that recently began a homeownership initiative in western Queens.

The Faith Fellowship Ministries World Outreach Center, a 7,000-member congregation in Sayreville, N.J., started its ownership program three years ago through its nonprofit affiliate, the Faith Fellowship Community Development Corporation.

Some 300 people a year go through the education program, which includes financial literacy coaching to "give people the tools to improve their credit, and to take responsibility for it," said the Rev. Clarence Bulluck, the corporation's founder and executive director.

Though the three programs operate somewhat differently, the basic structure is similar: sponsoring churches serve as the host of weeknight orientation sessions on home buying, where participants are encouraged to enroll in a more comprehensive education program developed by Freddie Mac. Financial counselors — typically trained church volunteers or community development corporation employees — review each participant's credit history and, in one-on-one sessions, help them plan how to pay off debt barring access to a mortgage.

In addition to supplying the curriculum, Freddie Mac provides seed money as what Mr. Nickerson calls "a one-time kick start" — $35,000 in Bridgeport's case — to pay for marketing materials and staff training. Partner banks provide access to flexible mortgages with low down payments.

The key element, however, is the churches, which promote the program to their members, who in turn spread the word. About 10 African-American and Hispanic churches are involved in the Bridgeport initiative, now a year old, run by the Faith Community Development Corporation, an affiliate of Shiloh Baptist Church.

"We're getting to people who are credit-injured or have what I would call a down payment disability — that's the preacher in me," said the Rev. Carl McCluster, a consultant on faith-based initiatives and the pastor at Shiloh, where Ms. Williams is one of about 250 members.

More than 200 people have either gone through or are enrolled in the education program, according to Bridgette Russell, the interim director. Six people have closed on homes so far, but, she said, the number would be higher if home prices were lower.

"One of the greatest frustrations is you can get a person to address credit delinquencies and have sufficient savings to technically qualify for a mortgage," Ms. Russell said, "but the housing market's prices are limiting what people can do.

Housing costs are also a sticking point at the ERDA Homes program in Long Island City, Queens. "The reality is, it is hard," Pastor Taylor said. "But the unique thing about our program is that we're going to stay with you. If you work hard and play by the rules, I believe you can find a place."

ERDA Homes targets some of the neediest New Yorkers: the roughly 15,000 residents of the Queensbridge public housing development, as well as the estimated 15,000 more who live in Ravenswood, Woodside and Astoria public housing. While the end goal is homeownership, ERDA's larger aim is to build financial knowledge within a population where, surveys have shown, roughly 30 percent of residents don't even have bank accounts.

Since a clergy coalition and tenants associations began promoting the ERDA program about six months ago, about 100 residents have developed personal financial action plans, 104 have opened bank accounts and eight have been preapproved for mortgages of $130,000 to $250,000.

Rosemary Allette, who lives at Ravenswood, credits her financial counselor at ERDA with giving her the confidence to begin working toward mortgage approval.

An employee of the State Department of Education, Ms. Allette, 46, said the program motivated her to rein in her spending: she takes a bag lunch to the office, stays away from the shopping center across the street, pays her bills the day they arrive and has a set sum deducted from her paycheck for deposit into her savings. She has also paid off some old medical bills and had a $4,000 judgment removed from her credit report.

After 20 years of living in public housing, Ms. Allette said, "I'm saving up for, if not a house, at least for a co-op or a condo, something tangible, something to show for all my hard work all these years."

http://www.nytimes.com/2006/05/28/realestate/28wczo.html?ex=1149566400&en=1940e69fc29f4bec&ei=5070

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. Plainfield Today, Plainfield Stuff and Clippings have no affiliation whatsoever with the originator of these articles nor are Plainfield Today, Plainfield Stuff or Clippings endorsed or sponsored by the originator.)