Outside the Box Thinking: San Jose Tackles Affordable Housing Crisis

Finding affordable housing in most major cities in the United States is becoming increasingly harder by the day.

Especially in San Jose, where being in the heart of Silicon Valley has caused home prices to skyrocket. Couple that with a housing shortage and, well, finding a place to live in San Jose has become next to impossible for middle income earners.

The good news is, San Jose government isn’t sitting on its laurels, as it tries to tackle this housing crisis that is punishing to many workforce individuals like teachers, nurses, and first responders.

The Bay Area’s largest city has turned to creating co-living environments. Taking a page from New York, which is the most established co-living city in the country with more than 1,100 existing units and another 1,600-plus in the pipeline according to Bisnow, San Jose is incorporating some progressive ideas to address this affordability issue.

While New York’s Department of Housing Preservation and Development launched ShareNYC, a program that provides public funding for the development of affordable, co-living environments, San Jose has gone a step further.

In the past year, it has completely re-written its zoning code to include co-living as a use within the code.

It became the first city in the country to do that, and others are sure to follow suit as they see the influx of co-living development in San Jose.

New Multifamily Complex

The jewel of that development is a co-living high rise being built in the city that will be a 302-unit, 803-bed multifamily complex slated to break ground before the end of the year. This 18-story building, being developed by the California-based company StarCity, will be the largest co-living development in the world.

However, with San Jose changing the zoning code, there’s a good bet that this project will only hold that title for a short period of time. That’s because having its own zoning code for co-living, San Jose has basically put up a flashing neon sign to developers across the country that says, “Come build here.”

Not to mention, co-living is a trend that is starting to gain some steam in many major cities around the country. StarCity already has smaller developments in Los Angeles and San Francisco, and New York remains the bell cow for this concept.

While there is a unit count, these co-living spaces are measure more on the number of available beds. Co-living spaces are similar to college dormitories in the sense that they offer private living spaces, or bedrooms, with shared living rooms, kitchens, laundry facilities, etc.

“The growth coming to San Jose will attract a slew of younger tech workers, which is ideal for a co-living environment.”

The new development in San Jose is close to public transit and is located conveniently near big employers who are either already in San Jose or in the process of re-locating there.

For example, Google has purchased more than $300 million in property in the city, most of it near Diridon Station where the tech giant has plans for a transit-focused village.

According to San Jose Spotlight, the Jay Paul Co., a Northern California developer has already committed nearly $700 million in the city while Urban Community, a San Jose-area based developer is planning to spend billions in this market, according to Bisnow.

With all that additional business space development on tap for San Jose in the roaring ‘20s, the city is going to need even more affordable housing, which makes the notion of co-living all the more practical.

25,000 new homes

The San Jose City Council has set a target of 25,000 new homes in the city by 2023 and an ambitious 120,000 by 2040.

With the costs required for more traditional development, those goals seem a little far-fetched. But, once you mix in the concept of co-living, suddenly they seem attainable.

Rents for the new StarCity development are expected to star in the low $2,000s, which could be as much as 50% cheaper than the typical studio apartment in downtown San Jose.

The growth coming to San Jose will attract a slew of younger tech workers, which is ideal for a co-living environment.

According to a report from JLL, investment in co-living has increased by 210 percent globally since 2015. A majority of that is new development – roughly 60 percent – rather than converting existing space into co-living use.

StarCity has made it known they are looking at other potential sites in San Jose and other major co-living companies are exploring options there as well. This could make San Jose the model for easing the affordable housing crunch nationwide.

One Stop Shopping – When You Go to the Doctor?

There is an always-evolving effort to find ways to retrofit the suburbs, and many of the ideas that have been born in recent years do surround shopping malls.

Whether they get a facelift, are completely razed and replaced by a walkable community of shops, restaurants and residences, or are filling their hallways with pop-up shops or in-person locations for online retailers, the goal remains the same – improve business and the local economy.

One other option, that would never have been thought of by the last generation, is “Medtail.”

Yes, it sounds silly, but the concept might actually be brilliant.

Malls are partnering with health clinics to fill empty spaces as a way to attract potential shoppers.

It’s an interesting concept. One wouldn’t think that if you are going to the doctor because you aren’t feeling well that you’d be inclined to go shopping once you leave, but then again, the convenience of having those stores just steps from the clinic could be appealing enough for you to power through that headache, or runny nose or pestering cough to make a quick pit stop at Aeropostale.

“Health care providers are also attractive tenants for mall landlords because they tend to have high credit ratings and sign longer leases compared with other retailers.”

In November, Mall of America in Minneapolis is opening a 2,300-square-foot walk-in clinic. Partnering with the physicians at the University of Minnesota and a local health-care system, the clinic will operate with myriad exam rooms, have lab space, a pharmacy and even a radiology department.

According to data collected by CNN, in the past two years, leases in malls for clothing retailers has declined by 10 percent, but those medical clinics being placed in malls has increased by 60 percent.

Health clinics have been booming across America in the past decade as an affordable alternative to emergency room visits when people can’t get an appointment with their primary care physician.

These clinics are often buzzing with activity for about 12 hours a day.

Many of them are in stand-alone locations on main thoroughfares, and while that still provides a potential incentive to go to other retailers while you are out and about, it still requires you to get in your car and drive to another location. Even if these stores are close by, the actual concept of transporting yourself there can be a deterrent.

But, if you walk out of the clinic and you are in a mall with multiple shops to choose from, the probability of shopping for something vastly increases.

On a smaller scale, with clinics in malls, the clinics must be staffed, and the likelihood of these doctors, nurses and other clinic employees shopping as well is an attractive concept for mall owners.

“Medtail” is a win/win scenario for the mall owners and the clinics themselves. For the mall owner, unlike a store that’s going to rely on its profits to determine long-term viability in a mall, health clinics are more reliable when it comes to financial solvency. As such, they should be good tenants, able to afford higher leases, and will likely lease the space for a much longer period of time.

On the other side, malls offer the health clinic and the health providers backing them an incredibly convenient location for outpatient and preventative care, and might even get additional patients who came to the mall to shop first and foremost, and then decided to hit the clinic, as opposed to the other way around.

Adding medical clinics also makes sense for mall owners because they draw in doctors, nurses and technicians every day who may shop and eat at restaurants, according to a May research report by real estate firm JLL. Health care providers are also attractive tenants for mall landlords because they tend to have high credit ratings and sign longer leases compared with other retailers, JLL analysts noted.

On the provider and health insurer side, shopping malls give companies convenient locations to set up outpatient care posts and preventative care locations for patients. Providers are increasingly looking to these lower-cost clinics to help patients avoid expensive trips to the emergency room.

And this is likely just the dipping of toes in the water when it comes to the marriage of retail and medical services.

Consider the Dana-Farber Cancer Institute, one of the leaders in cancer research and treatment in the United States. It is currently in the process of building a 34,000-square-foot hematology and oncology outpatient facility in the Patriot Place shopping center in Foxborough, Mass., just outside of Boston.

If that proves to be a success, other outpatient outposts could start to crop up at malls or shopping centers across America as many folks who need blood disorder or cancer treatments often have to travel great distances.

Cutting down on such lengthy commutes will be a boon for the patients and potentially bring economic benefit to local economies at the same time.

It’s no longer considered thinking outside the box to imagine malls that have primary care physician offices, or specialty care for certain physical conditions or the management of chronic illnesses.

It could even get to a point where “anchor” department stores are replaced with medical facilities like rehab centers, MRI outposts or even “mini-hospitals.”

Convenience is a very real motivator in the current age. Finding ways to make malls a one-stop-shop for all that convenience is the rapidly growing trend.

A 30-Year FRM is Still the Most Reliable Way to Finance a Home

When it comes to financing the purchase of a home, there is an option that is a gold standard, and then there is everything else.

That option is a 30-year fixed-rate mortgage (FRM). And it is so uniquely American in its ideology.

“The 30-year FRM isn’t widely available in other countries,” said Ken Fears, Senior Policy Advisor for the Advocacy Group at the National Association of REALTORS® (NAR). “It’s a huge advantage for consumers because it allows them to have a better idea of how to manage their finances. Equity isn’t built as quickly, but it provides a lower, more stable payment.”

“Quite simply, it’s a bread and butter product,” Fears said. “Our parents used it. We’re familiar with it. There’s no reason to change it.”

A 30-year mortgage is a home loan that will be paid off completely in 30 years if you make every payment as scheduled. Most 30-year mortgages have a fixed rate, meaning that the interest rate and the payments stay the same for as long as you keep the mortgage.

About 90 percent of homeowners who have a mortgage choose the 30-year FRM, according to data from NAR’s Homebuyers and Sellers Generational Trends Report that was released in August.

The 30-year FRM was adopted by the Federal Housing Administration (FHA) in the 1950s to counter actions taken by the Federal Reserve.

The Fed started raising interest rates in 1954 after decades of buying Treasury debt to artificially hold down long-term treasury rates.

At the time, 20-year mortgages were en vogue, but moving to a 30-year mortgage lowered the monthly payments and successfully cancelled out the two percent rise in rates that took place over the first 10 years of the 30-year mortgage’s existence.

By the early 1960s, the 30-year FRM became standard with the FHA. In the Savings and Loan industry, it took about another decade before it became standard there as well. And an overwhelming majority of Americans use them today.

And why not? There are so many benefits for the consumer to procuring a 30-year FRM when buying a home.

  • Lower payment: As previously mentioned, a 30-year FRM allows for the buyer to lock in a fixed interest rate for the life of the mortgage, guaranteeing cost certainty and an easier management of individual or familial budgets.
  • Flexibility: If a borrower’s financial situation improves, they have the option to pay off the loan faster by paying more each month or making extra payments. But, the borrower can always fall back to making the minimum payment, if needed, at any time over the life of the repayment period.
  • Predictability: The economy might fluctuate. Interest rates may skyrocket. But borrowers can breathe easy knowing that their payment won’t change despite those unpredictable variables in the market.
  • Affordability: Having a guaranteed lower payment could allow a buyer to purchase a slightly larger home than they thought they could afford knowing that the payment won’t go up and outside their budget at any point down the road.
  • Tax Benefits: Depending on the state, tax laws allow homeowners to deduct mortgage interest from their taxes. In the first few years of a loan, a majority of payments go toward paying off the interest on the loan, this usually leads to a more substantial deduction come tax season.
  • More likely to Qualify: Smaller payments make it easier for more borrowers to become eligible for a 30-year mortgage.
  • Prevents House Poverty: Rather than be in a home and financially strapped, after the mortgage is paid each month, there’s more money left for other goals, whether they be project or entertainment-based.

“Quite simply, it’s a bread and butter product,” Fears said. “Our parents used it. We’re familiar with it. There’s no reason to change it.”

And yet, there are some who would want to see it go away. There is ongoing discussion inside the FHA and the agencies it regulates – Fannie Mae and Freddie Mac – as to whether there needs to be reform to mortgages, and if so, what would they look like?

Detractors argue that a 30-year FRM has a negative impact on homeowners because lender’s charge higher interest rates on a 30-year mortgage because of a greater assumed risk of not being repaid. Additionally, when paying on a 30-year mortgage, there is more interest being paid, creating a higher total cost when compared with a shorter-term loan.

Also, those who support eliminating the 30-year FRM as part of an overhaul to the system cite a slower growth in home equity and also has a psychological impact because it might make people overborrow to get into a bigger home than they can really need. Add to that the greater need for home upkeep and possibly even higher utility bills.

But is change really the best answer?

“We’re concerned as an institution that if you mess with a system that’s worked well, many underserved markets will be affected negatively,” Fears said. “People of color and urban areas as well as small towns and rural markets – which make up huge swaths of the U.S. – these are the engines of middle-income home ownership. They need the 30-year FRM.”

Additionally, middle-income individuals and families are the lifeblood of an economy. They spend money at local businesses. If they can’t afford to do that, the local economy starts to suffer. When that happens, it impacts taxes, school districts, infrastructure, community safety – it’s a vicious cycle.

The 15-year FRM

Other options do exist. There’s a 15-year FRM, which is identical to the 30-year, only it resolves itself in half the time. Then there are adjustable rate mortgages (ARM) which fluctuate on the interest percentage based on the economy and the whims of the Fed when it sets insurance rates.

“We are living in a rising rate environment,” Fears said. “Yes, it has fallen for the last for six months (March-September, 2019), but the rates had been rising before that, and they are going to rise again in the next 10 years. Our government is spending more money and rates are going to rise.”

Fears added that the problem with the 15-year FRM is that despite sandwiching the payments down, borrowers are now paying it off twice as fast – nearly doubling each monthly payment and swallowing up the income of the buyer. This often puts the buyer way over their debt-to-income caps.

“If you have wealth or have been in your home 10-15 years and you are trading up and have equity for a large down payment, that’s the only way it makes more sense,” Fears said.

As for an ARM, they are usually more beneficial for people who move frequently, or who flip properties, or even own a home as a rental property because they can recoup the changes in their mortgage payment as part of their investment in the property.

According to a report from the Urban Institute, ARM’s spiked during the subprime mortgage crisis but have levelled out since. The NAR Generational Trends report indicated that only two percent of all buyers who finance their mortgages use ARM’s in 2019.

Adjustable-Rate Mortgages

“The share of ARMs surged at the peak of the subprime period because lenders were being paid more to originate ARMs based on the assumption that rising home prices would allow borrowers to refinance,” Fears said. “In short, the high share was an anomaly.”

Furthermore, ARMs are incredibly volatile for the average homeowner because despite a lower monthly payment in the beginning, usually within five years the payment will have exceeded, sometimes substantially, that of an FRM.

“A buyer might be comfortable with having higher future monthly payments based on their current financial situation,” Fears said. “But what happens if they need to do some belt-tightening down the road? Will they have the reserves? There are so many variables that a borrower just doesn’t plan for. What if they or someone in their family has an illness? What if their kids switch from public to private school? What if they have another child?

“There are so many life-altering things that can happen that could have an adverse impact on what someone can afford to pay. Having a reliable, fixed rate and fixed-payment on a mortgage helps to defray some of those potential life surprises.”

It’s why an overwhelming majority of homebuyers choose the 30-year FRM to finance their purchase. It’s safe. It’s reliable and it won’t increase over time.

It’s a part of the ethos of America. And it should be for generations to come.

Clarity About Workforce Housing Could Help with Affordability

Moren Adenubi is not your average REALTOR®, but even still, three years ago she wasn’t exactly sure how to properly define “workforce housing.”

A Certified Commercial Investment Member (CCIM) and a Certified Property Manager (CPM), Adenubi often tries to find commercial property for businesses, especially in the Nashville area where she is based as the managing broker for Crown Realty Experts in suburban Goodlettsville.

So, when she listed a property that Minnesota-based Dominium – one of the largest affordable housing development and management companies in America – was interested in developing for an apartment complex in Nashville to build 261 units of “workforce housing,” Adenubi had to up her game.

Not because she’s not educated in real estate, but because she didn’t realize the many trap doors that exist when trying to develop affordable housing, especially in hot markets like Nashville where home prices are rising faster than wages.

“I was very unaware of the income discrepancy for what it takes someone to rent,” Adenubi said.

The Lack of Affordable Housing

According to WKRN news, in 2011 the average monthly rent for a two-bedroom apartment in Nashville was $825. In 2019, that price has nearly doubled to $1,536 per month.

That means that the average annual rent is $18,432.  According to Adenubi, a newly hired teacher in Nashville metro schools who has a Master’s degree makes an average salary of $45,629 annually and therefore would not qualify to rent a two-bedroom apartment.

“It was shocking,” she said.

And it’s a problem across America, not just Nashville. Many teachers who are starting a job for the first time are looking for a place to live close to the school and many find they can’t afford to live there. As such, they must live much further away and endure lengthy commutes just to get to the job, and often they will leave after just a year or two, making teacher retention such a difficult task for school districts to manage.

But it’s not just teachers. A lot of middle-income folks face the same housing issues. Nurses. Police officers. Fire fighters. They can’t afford to live in communities where they work.

So, it made sense to Adenubi to work with Dominium to acquire her listing and to develop apartments in a city like Nashville where affordable housing has grown scarce.

Neighborhood Opposition

Little did she know the fight she was going to be up against.

Dominium had placed a contract with zoning contingency on her listing – a tract of land for this development – which they called the Preserve at Highland Ridge – located on Dickerson pike about eight miles and a short 15-minute jaunt from downtown.

However, to develop this land, Dominium needed it to be rezoned. As such, a Zoning Board meeting commenced, and Adenubi was floored by what happened next.

“The people came out in droves to oppose this development,” she said. “I was stunned. Why would people be so opposed to building housing for middle-income earners?”

Adenubi quickly realized it was because of a lack of education on what exactly workforce housing is and a misguided belief about what workforce housing would bring to a neighborhood.

“They heard ‘workforce’ housing and they immediately thought it was Section 8 housing,” Adenubi said. “While some people who qualify for a Section 8 subsidy might end up renting apartments there, that’s not what’s going to happen with a majority of the units.”

These apartments would certainly be in line with the demographics of the neighborhood. According to Adenubi, the most affluent area in this part of Nashville is Mulberry Downs, where the top homes sell for approximately $250,000, which is basically the wheelhouse for middle-income homeowners.

But, juxtaposing “workforce housing” with “section 8” is what created a firestorm.

“Putting labels on these things is quite dangerous,” Adenubi said. “It became obvious that the community just needed to be educated better about this if we were ever going to make it happen.”

Bringing The Community Together

So, Adenubi reached out to former Nashville Metro Councilwoman Brenda Haywood because she represented the District that this new complex would be located, hoping to find an affordable housing champion.

Haywood told Adenubi that she completely understood what Adenubi was saying and that it made sense to her as an individual, but Haywood was reluctant to openly support the development, telling Adenubi it was her job to represent the people of her district and if they were opposed to it, then that’s what she had to support.

“I was impressed by that,” Adenubi said. “Too often, politicians have their own agendas. I respected her stance.”

However, Haywood, who left her position to join the staff for newly minted Mayor John Cooper, serving as deputy mayor for community engagement, wasn’t shutting the door completely, and worked with Adenubi to provide her with a list of objections to the development of this complex.

Haywood told her that if she could address the concerns of the constituents, she might be able to sway their opinion.

Educating Local Residents

So, Adenubi went to work. She looked at the list of objections and worked with Dominium to find someone who could speak fluently against each one and had them attend a community meeting with many of the same residents who complained at the community meeting.

“We were well-prepared,” Adenubi said. “I had a whole team of experts who were there to address every concern.”

The biggest concern was the income levels of the would-be residents as well as the possibility to bring more crime into the community, as there is a direct link between an increase in crime and lower income.

Moren AdenubiAdenubi put together a team of experts to address the community’s concerns.

To counter this, Adenubi worked with Dominium to bring in a Dominium resident manager to come in to speak about the application process, letting the residents know that not just anyone would be eligible to rent an apartment there. There is a vetting process that includes income confirmation as well as criminal background checks.

She also defined “workforce housing” for the uninformed public.

She told them that the Urban Land Institute defines workforce housing as “Housing that is affordable to households earning 60 to 120 percent of an area’s median income.” Housing can also be defined as affordable if the housing costs are no more than 30-40 percent of income.

“As a property manager, my company uses the lower 33.3 percent to qualify prospects on rent affordability,” she said. “The US Department of Housing and Urban Development (HUD) states that in 2018, $74,900 is the median income for Nashville, Tennessee.”

“The biggest concern was the income levels of the would-be residents as well as the possibility to bring more crime into the community, as there is a direct link between an increase in crime and lower income.”

Dominion also brought in one of the architects to talk about the layout of the property. Residents were floored to learn that these apartments would have some unexpected luxuries.

The Preserve will feature spacious common areas with high-end finishes. The community consists of one, two, and three-bedroom apartments. The apartment community has breathtaking view of the National Forest Preserve to the northwest, and downtown Nashville to the south.

The apartments will have open and spacious floor plans, nine-foot ceilings, fully equipped kitchens with energy star rated appliances, smart cabinets, granite countertops, balconies and in-home washers and dryers.

Community amenities include a furnished clubhouse with clubroom, kitchen, a yoga studio, a fitness center, an indoor children’s playroom, an outdoor playground, grilling stations and a pool. With a combination of outdoor and indoor amenities.

“Preserve at Highland Ridge is Dominium’s first new construction development project in the state of Tennessee, and the company’s first project in the Nashville metro,” said Dominium Managing Partner and Senior Vice President Mark Moorhouse. “Once complete, the project will help address the growing shortage of affordable housing in Nashville.”

A representative of the Metro Water Department was also brought in to ensure existing residents that the addition of 261 apartments would not have an adverse effect on their water intake or water pressure.

“It was pretty amazing, their opinions changed immediately on the same spot – that same day,” Adenubi said. “The key was our preparation. We needed to legitimize the project with information, present the right people to provide the facts and address those issues.”

The Outcome

Eventually, the zoning was approved. Finally, three years later, after cutting through more red tape to get the financing necessary to secure this development, Dominium broke ground on the Preserve last May.

The expectation is that the apartments will be available to move-in by October 2020.

“I think we just need better education as to what workforce housing is,” Adenubi said. “It doesn’t matter what we call it, it’s still going to get a stigma without understanding. Rather than worry about the name, we need to make sure people understand that workforce housing is quite simply affordable housing for working people just like you and me.”

For her part, Adenubi is now championing this as a pet project of sorts in Nashville. She is working with Dominium to find the next location for affordable housing in Nashville, but she has also taken it a step further.

She went to the Apartment Buildings Complex and Expo in Pasadena, Calif. In September where she was networking with other builders and developers who might be interested in investing in affordable housing in Nashville.

“I started learning more about Opportunity Zones, Qualified Census Tracts and Difficult Development Areas, Low Income Housing Tax Credit Financing and other programs to attract developers to come to Nashville,” she said. “Nashville is one of the top 10 cities with increasing rents so, we’re not the only ones facing this affordability crisis.”

How Should You Approach Buying a Home For The First Time?

Becoming a first-time homebuyer is an exciting time in anyone’s life. But sometimes it’s hard to tell where the excitement begins and the anxiety ends.

That’s because while the good energy pumping through one’s veins is directly attributed to making the investment of owning a home, racing right alongside it at breakneck speed is the uncertainty and stress that comes from the process.

And the mixture of all the feelings and emotions that are stirred when buying a home for the first-time is especially intoxicating for Millennials and younger first-time homebuyers.

Soaring prices, dwindling availability, and the burden of things such as exorbitant student loan debt or wages that aren’t commensurate with the prices of homes in hot markets combined with unexpected costs and fees make the homebuying experience much more daunting.

According to the National Association of REALTORS® one-third of all homebuyers in 2018 were first-time homebuyers and the median age of those first-time folks was 32.

But there are a lot of different routes for first-time homebuyers to enter the housing market – and many of those roads are designed to help them traverse the sometimes craggily path toward homeownership.

For example, according to Freddie Mac, one-fourth of all first-time homebuyers used a gift or a loan from family members to buy their first home while an additional 10 percent received federal financial assistance.

Recently, the Providence Journal talked to several people who bought homes for the first time and identified how they approached buying a home for the first time and outlined them as a sort of menu for other first-time homebuyers to consider.

Here is a recap of each of the stories they presented:

The Married Couple (Herndon, Va.)

Who: Goncalo and Nancy Fernandes

Age: Goncalo (32), Nancy (33)

Career: Goncalo works in the auto industry while Nancy works in Medical Billing in nearby Ashburn, Va.

Budget: $400,000

The Story: The Fernandes’ were saving up to buy a home and weren’t quite ready to buy, but they started to panic when they saw prices climbing and mortgage rates rising in the Fall of 2018. Within a month, they made an offer on a townhouse in Leesburg, Va. Originally, planning to save enough for a larger down payment, they were at 12 percent at the time of the purchase. However, they were nervous about putting all that money down and wanted to save some of the cash, so they only put 5 percent down with a conventional loan geared toward first-time homebuyers. They are paying a private mortgage insurance (PMI), but that is customary for most loans with a down payment of less than 20 percent. They used the extra cash to do work on the house, since it was a bit of a fixer upper. As such, they negotiated with the seller to pay for needed repairs (a new water heater, resealing windows and a patch on the roof) and they used that money as a credit toward closing costs to save the extra cash for further home renovations. Since they were able to put less down and negotiate for work to be done to the property before the sale, they can get the updated property appraised soon and could possibly get rid of the PMI.

The Family of Four with an Unemployed Parent (Paradise, Md.)

Who: Sayed Shah, Rija Tofeeq and their two young children.

Age: Sayed (33), Rija (27)

Career: Sayed (unemployed student), Rija (nurse)

Budget: $400,000

The Story: Rija Tofeeq wasn’t sure if she and her husband Sayed Shah should buy a home or pay off her student loan debt. They were living with Tofeeq’s parents and she had $67,000 in debt and $50,000 in savings. That’s when Rija had heard about the Maryland SmartBuy Program which would allow her to pay off her student loan with a zero-interest second loan if they used the Maryland Mortgage Program to purchase a home. Shah held off on taking a new job to meet requirements. Tofeeq took out the loan in her name. She paid off $27,000 of her student loans and used another $20,000 as a 5 percent down payment on a single-family home in Paradise. The lender paid off the remaining $40,000 of Tofeeq’s loans and she took out a second loan on the house with the lender to repay that balance. The big deal for Tofeeq here is that as long as she stays in the home and pays off the loan at zero interest for five years, the rest of the loan will be forgiven.

A Single Mom and her Three Children (Washington, D.C.)

Who: Yaqueline “Jackie” Uribe Perez Clauss, three children aged 22, 17 and 6.

Career: High School Teacher

Budget: Low-income

The Story: Clauss moved to Washington D.C. with her three children in 2016. Unable to afford to buy a home, she rented a basement apartment, but always had her eye on the prize of owning her own home. Wanting to live close to where she worked in Northwest Washington, affordability was a real issue. That’s when she utilized two home buyer programs to help her get into her own house in the Fort Lincoln Park neighborhood of Northeast Washington. First, she entered the District’s Inclusionary Zoning Program which creates a lottery to offer loans to a qualified applicant to buy an affordable home. The program has many steps, including income restrictions and a requirement to take classes on homebuyer education. While she waited to see if she would hit the lottery, Clauss also qualified for a $30,000 loan to help with a down payment though D.C.’s Home Purchase Assistance Program. That coupled with $2,000 she had saved on her own was the lynchpin for her to secure her own home once she won the inclusionary zoning lottery.

The Single Woman (Fredricksburg, Va.)

Who: Maria Lynard

Age: 29

Career: Remodeling Company Employee

Budget: $200,000

The Story: Maria Lynard knew that the only way she alone could save money to buy a home was to live with her parents long enough to save the money needed for a down payment. So, she did, and when she was ready to buy a home, she spoke to a real estate agent who clued her in to homebuyer assistance programs in Virginia that are designed to help first-time homebuyers. Based on her status as a first-time homebuyer combined with her income, Lynard qualified for a Virginia Housing Development Authority grant of $4,000 to help cover her closing costs. This grant doesn’t need to be repaid because she took an online homebuyer class. Because of that assistance, she was able to put eight percent down on a $200,000 home that was move-in ready.

The Inheritance (Washington, D.C.)

Who: Walker Timme

Age: 35

Career: Charter School Teacher

The Story: Walker Timme rented a studio apartment for 11 years. Then, when her mother died, she inherited money that allowed her to pay cash for her first home. However, Walker had important requirements before she bought. First, she wanted a condominium. Secondly, it needed two bedrooms and two bathrooms, so her Dad would have a place to stay comfortably when he would visit. The place also needed to allow for pets (specifically her dog) and be close to a D.C. Metro station. Finally, she wanted front desk security. Importantly, Timme not only worked with a real estate agent, but also a lender to help her find the right place. It worked out. Her monthly expenses which consist of condo fees, taxes and insurance total fewer dollars than what she paid in rent at the studio each month for more than a decade.