NeighborWorks’ Focus on Innovations in Affordable Rental Housing



In today’s turbulent economy, working families need consistent access to affordable housing more than ever. Changing family work situations, the unabated foreclosure crisis and more stringent mortgage loan requirements mean that for millions of families, renting an apartment or house is the only option. This has resulted in a sharp increase in the demand for affordable rentals, a critical need that NeighborWorks organizations are meeting in neighborhoods and communities across the country.

NeighborWorks America has focused on asset management since we began providing national services to our network’s providers of rentals. As a result, over 175 NeighborWorks organizations successfully provide affordable homes that 80,000 families and seniors are proud to call home. These apartments and rental houses are safe, great looking, energy-efficient and well managed. Many of our affiliates also offer highly effective services — to more than 100,000 residents — to help them succeed. Children succeed in school and parents succeed in saving, improving credit scores, and managing their budgets.

Written by Frances Ferguson, Senior Manager
National Real Estate Programs
NeighborWorks America

NeighborWorks America continues to look at the best ways of supporting our network and other nonprofit providers of rental housing, particularly as federal, state and local budget cuts of program services put strains on the affordable housing industry. 

At the next symposium on December 14 in Washington, DC, NeighborWorks will explore how nonprofits of various sizes and market areas are adjusting and innovating to sustain and grow the numbers of people they can serve through affordable rental housing. This symposium, Building on Strength: Invigorating Business Models for Affordable Rental Housing in the New Era, will focus on practical solutions to the capital gaps in affordable rental housing development by highlighting examples of organizations developing new partnerships, new types of real estate transactions, and new business models.

Between 2004 and 2010, the number of renters in the U.S. grew by nearly 4 million. Success at delivering much-needed affordable rental housing in the future may mean that nonprofit housing providers will have to look at new business strategies for long-term sustainability. To join the discussion about this very timely and important issue, register for the symposium at www.nw.org/training.

NeighborWorks America Sees Obstacles to Significant Refinance Activity

Record low mortgage interest rates should be a boost to the economy as homeowners reduce their monthly housing costs and recycle the monthly savings back into the economy. But Marietta Rodriguez, National Director of Homeownership and Lending at NeighborWorks America, points out three realities of today’s mortgage market that suggest a refinance wave may not happen for many homeowners.

1. It is more difficult to qualify for a mortgage these days than ever before. Prior to the housing bust, a credit score of 650 made a homeowner easily eligible for the lowest rate available. Today, a homeowner needs a much higher credit score — often above 700 — to obtain the lowest rate possible, and make refinancing a net positive.
   
   "With today's risk-based pricing for mortgages, it's not unusual for a homeowner who wants to refinance to hear about the record low rates in the market, and is surprised to learn that he doesn't qualify for that rate. The risk-based rate could be a percentage point or higher, sometimes making a refinance not worth it at all," said Robert Tourigny, executive director of NeighborWorks Greater Manchester, and the local NeighborWorks HomeOwnership Center.
   
   
2. Once a homeowner has decided that she wants to pursue a refinance, the reality of just how much home equity was lost in the housing crisis becomes plain. Without 20 percent equity, the best mortgage rates are out of reach. Ten percent gets a seat at the refi table, but 28 percent of homeowners with a mortgage are “underwater,” or owe more than their homes are worth, according to research firm Zillow.
   
   “Even those homeowners who have a sufficient credit score — millions of them — are just unable to participate because they don’t the home equity to qualify for a refinance mortgage,” said Rodriguez.
   
   
3. A homeowner who can't bring closing costs to the table— typically at least one percent of the refi loan amount— also can't refinance into a lower mortgage payment, and strengthen their household budgets. Household income is still not robust, and while savings rates have increased since the recession began, not many homeowners have the thousands of dollars in cash required to pay for closing costs.
   
   “The bottom line is that although mortgage rates haven't seen levels like this in decades, forces beyond the interest rate will likely hold back any significant refinance activity — the kind that we would expect to see when mortgage rates dropped to these levels,” said Rodriguez.
   
   

Homeowners who are considering taking the first step to refinance their mortgage are encouraged to see a homeownership advisor from one of the more than 100 NeighborWorks HomeOwnership Centers located around the country.

A local NeighborWorks HomeOwnership Center can be found at www.nw.org/homeownership.

Senior Housing Issues, Successful Programs Take Center Stage at Atlanta Training Institute

An August 10 symposium on senior housing was the centerpiece of a week-long NeighborWorks Training Institute that attracted 2,100 community development practitioners to Atlanta. Sponsored by The Atlantic Philanthropies, the symposium brought together innovators from the affordable housing field with experts in aging to explore ideas and share strategies for creating healthy, vital communities that include seniors as a growing and important segment.

"As a result of the aging of the oldest baby boomers (born 1946 to 1955), this decade (2011-2020) will witness a huge increase in the number of age 65-74 persons below the poverty level,” predicted opening speaker Stephen M. Golant, a professor at the University of Florida and an expert in the field of aging. “This will produce a large latent demand for public programs that offer these younger seniors affordable rental accommodations and assistance in maintaining their own homes."

Other speakers and panelists underscored how the current foreclosure crisis and economic recession have created even more pressing challenges for lower-income seniors.

Our Twitter Wrapup captured some of the more pointed comments from the symposium from the perspective of some of the participants.

Our photos from the symposium contest take you right into the neighborhoods and homes of seniors who personify what aging gracefully in community is all about.

You can also download resources from the symposium on topics such as:

• Successful programs that make homes for seniors safer, more affordable and an asset to the community
• Effectively engaging senior residents on boards of directors, and in neighborhood associations, community projects and other volunteer efforts
• Available resources for effective rehabilitation, retrofitting and weatherization
• Housing counseling services for seniors, including the benefits and risks of home equity conversion mortgages (HECMs)/reverse mortgages, and how to offer these products and/or counseling to your clients
• Partnering with health and social service providers to ensure your seniors are receiving the care they need to be productive members of your community
• The design and benefits of multi-generational housing
• Identifying and accessing available resources for your senior programs
• Successful models of affordable housing for seniors

Thanks to the Advisory Committee that helped make this an engaging symposium, representing AARP, AARP Foundation, Avesta Housing, HHS, Enterprise Community Partners, Leading Age, National Council on Aging, St. Ambrose Housing Aid Center and United Way.

Homeowners Who May Be Forced to Leave Their Community Are Fighting Back

Homeowners in Niagara, NY are learning the hard way that foreclosure isn’t the only way to lose your home these days. More than 135 owners of mobile homes in Sabre Park have begun working with NeighborWorks organization, Pathstone to find a way to halt the sale of the land their homes are on. Unique to hundreds of mobile park communities around the U.S., homeowners living in mobile home communities own the house they live in, but rent the land that the home sits on. This leaves the homeowners vulnerable to owners of the mobile park land choosing to sell the land right out from under them – effectively evicting them from their communities.

However, Pathstone and other NeighborWorks network members are working to organize mobile home residents and establish a financial process that allows owners to buy the land. NeighborWorks partners with ROC USA, a corporation created to help resident led corporations to buy their manufactured home communities from private company owners. NeighborWorks America CFO, Michael Forster is on the ROC USA Board of Directors.

NeighborWorks America recently recognized Montana resident, Tammy Hoth, with a Dorothy Richardson Award for Resident Leadership for her work in organizing her neighbors and successfully purchasing their mobile home community, establishing long-term affordability.

NeighborWorks Organization Seeks to Help Seniors in Contest from Tom’s of Maine

In what is increasingly becoming commonplace for community-based nonprofits, Neighborhood Housing Services of Boise, a member of the NeighborWorks network, is competing for a “favorite” grant from a socially responsible for-profit company – Tom’s of Maine.

The NHS of Boise is competing for part of $150,000 from the environmentally conscious company, which is an independent but wholly-owned part of the global Colgate family of companies. NHS is hoping to use the grant that it could receive from Tom’s 50 States for Good competition to finance its Rake Up Boise campaign, an initiative that involves coordinating more than 6,000 volunteers to rake and winterize the yards of more than six hundred senior citizens and/or disabled people.

Tom’s of Maine is just one of a number of for-profit companies and their foundations that are combining “favorite” voting and grant making. For example, The Home Depot Foundation is currently engaged in an “Aprons in Action” campaign where consumers are asked to vote for their favorite Team Depot Project. A search around the Internet turned up “favorite” fund raising programs from Pepsi, Subaru Discovery Channel’s Planet Green and more.

With financial and in-kind support for community-based nonprofits not expected to grow this year or next, fund raising approaches that engage an organization’s friends and its friend’s friends, is one way nonprofits are working to attract new volunteers and financial resources.

Meanwhile, if you care about helping seniors take care of their homes cast a vote for NHS of Boise. Voting ends September 13.