Down Payment Programs Boost Neighborhood Stabilization Efforts

By Marietta Rodriguez
Deputy Director of
National Homeownership
Programs & Lending

There are many steps to rebuild neighborhoods decimated by the foreclosure crisis, but an essential step is to get homeowners back to living in the homes that tragically were lost to foreclosure. NeighborWorks America believes that if new homeowners begin moving into many of the homes in neighborhoods hardest hit by foreclosure, neighborhood stabilization will happen more quickly for those housing markets. 

Toward that objective, NeighborWorks America has focused its energy and expertise to support the targeted use of down payment assistance to help buyers afford a home, while simultaneously providing the  homebuyer education that we believe helps ensure that buyers get the right home, the right mortgage and the fullest understanding of the costs of being a homeowner for sustainable homeownership.

The initiative that we're behind is called NeighborhoodLIFT^SM,  an alliance between NeighborWorks America, Wells Fargo and Company, and local members of the NeighborWorks network, which was recently featured in American Banker and noted in the Chicago Tribune.

NeighborWorks America has been helping the NeighborWorks network to fund down payment assistance programs for years, and we’ve been consistent in linking down payment help with homebuyer education. In fact, in 2011 the NeighborWorks network provided homebuyer education to more than  39,769 households.  Low down payment and down payment assistance programs did not create the housing crisis, that much we know for sure. But some analysts of the housing crisis think otherwise and that has made many lenders skittish about the viability of down payment assistance programs.

Wells Fargo demonstrated leadership in developing NeighborhoodLIFT, and by expressing confidence in the effectiveness of homebuyer education and down payment assistance to help homebuyers make the kind of choices that lead to long-term homeownership success.

Homebuyer education is key component of the homeownership philosophy of NeighborWorks America and  homeownership is a big part of our neighborhood stabilization strategies.

Although mortgage rates are close to all-time lows, many potential homebuyers remain on the sidelines without the down payment that they need, or the information that would make them comfortable purchasing a home in a neighborhood with few “bumps and bruises”. As recent news articles have said, NeighborhoodLIFT helps on both fronts.

$3 Million from Wells Fargo Housing Foundation Will Bolster NeighborWorks Housing Education and Counseling

A $3 million grant from the Wells Fargo Housing Foundation will support a range of NeighborWorks America training initiatives. It will strengthen the ability of nonprofit community development professionals to help thousands of consumers better understand homeownership and how to avoid foreclosure.

Wells Fargo’s grant to NeighborWorks America supports training and scholarships for homeownership educators and housing counselors delivered through NeighborWorks Training Institutes; local place-based training opportunities around the U.S., and increasingly through NeighborWorks led e-learning courses. The grant period runs from October 1, 2011 through March 31, 2013.

“This grant from Wells Fargo is important to our ability to provide the latest information and training to housing counselors and other community development professionals,” said Eileen Fitzgerald, CEO of NeighborWorks America. “Importantly, this grant from Wells Fargo underlines its commitment to narrowing the gap for access to quality homeownership education, training and counseling.”

“Financial challenges are building for housing counseling services at a time when consumer demand for their help is growing,” said Kimberly Jackson, executive director of the Wells Fargo Housing Foundation. “Wells Fargo believes homeownership education and counseling training and scholarships provided by NeighborWorks are critical to helping Americans as they face financial struggles that extend beyond their home payments and the country continues to work through the impacts of a challenging economy.”

Using various delivery methods to reach housing counseling practitioners, NeighborWorks America awards more than 12,000 training certificates each year in homeownership and community lending, and the demand for skilled professionals in homeownership education and counseling is not expected to decline.

Thank you to Wells Fargo for strengthening our training reach! Learn more here.