Homeownership Stabilization Amid COVID-19

Another association that built a homebuyer education and counseling program is the North Shore Association of REALTORS® in the greater Boston area. “When we were looking for a community partner, we chose Harborlight Community Partners, a nonprofit that develops, manages, and advocates for affordable and inclusive housing,” says Susan Kline, CEO of the North Shore Association.

When the association decided to become a homebuyer counseling organization, it worked to get approved through an organization called the Citizens’ Housing and Planning Association (CHAPA). “CHAPA had never approved a REALTOR® association before, so they weren’t comfortable with us taking the lead to be counselors,” said Kline. “Harborlight was considering becoming a first-time homebuyer provider, so it made sense. We already spent two years with Harborlight putting together a fantastic curriculum.”

The association is now in its second year of being approved by CHAPA as a partner. “Since COVID-19, we’ve been doing all of the courses on Zoom, and they’ve been filled,” says Kline. “Homeownership is the foundation of our communities,” she says.

“We’re constantly looking for ways to increase value and position ourselves in the community as a true resource,” says Jessica Coates, CEO of the Howard County Association of REALTORS® in Columbia, Md.

In 2019, her association applied for and received a $10,000 Housing Opportunity Grant through NAR. “We had almost a full year of in-person opportunities for first-time homebuyers before COVID-19 struck,” says Coates. “We were offering our physical office so consumers could come in and get a HUD-approved, first-time homebuyer certificate along with programming to help them with their next steps.”

Since March 2020, the program has pivoted to online. “HUD has approved a six-hour online seminar, so we haven’t missed a beat,” she says. “Our attendance at these events has doubled.”

She notes that the most significant barrier to homeownership is “a lack of knowledge about financial planning.”
Of course, COVID-19 has brought additional fears. “That fear can paralyze them, but with a REALTOR® and other professionals available to educate them on financing, the process of buying and more, we can help get people into homes,” she said.

In Pittsburgh, Pa., the Urban Redevelopment Authority (URA) has a housing stabilization program that provides rental assistance to tenants and homeowners’ mortgage assistance. “We are taking money from the CARES Act and providing mortgage assistance through program administrators such as the Urban League,” says Jessica Smith Perry, director of housing, lending and investments for URA. “The funding could pay a homeowner’s mortgage for up to $6,000 or six months, whichever is less.”

At press time, the URA was surveying residents to identify where the $10-million Housing Opportunity Fund would be best spent to support affordable housing initiatives.

It also offers a Housing Assistance Resources Portal where users can search for housing-related programs and services. “The URA’s homeownership programs such as the Down Payment and Closing Cost Assistance Program not only helps first-time homebuyers purchase a home but also stabilizes Pittsburgh’s neighborhoods,” said Perry. “Additionally, the URA supports nonprofit and for-profit developers who rehab or build new for-sale housing on blighted or vacant land and properties in Pittsburgh’s neighborhoods. By rehabbing abandoned housing stock and making it affordable to first-time homeowners (and tenants), Pittsburgh’s neighborhoods can flourish.”

“Stabilizing homeownership is critically important during this difficult economic time for our country,” said Perry. “Homeownership provides a means to wealth in this country through the accumulation of equity.”

While education is essential, it’s even more vital for REALTORS® to research what’s available in their communities to help stabilize homeownership. Workgroups, community partnerships, and programs are out there to help find equitable solutions to difficult problems.

The Housing Assistance Council (HAC) is a national nonprofit organization that helps build homes and communities across rural America. “We work with local, community-based organizations that are building, developing, preserving, maintaining affordable housing in their specific community,” says Lance George, director of research and information for HAC, based in Washington, D.C.

“I think there’s a perception that [in] rural markets the primary challenge might be substandard housing. It’s housing affordability, like the nation itself. It’s unclear what’s going to happen in the wake of the virus,” says George. The pandemic has heightened those issues due to the vast swath of rural Americans who are out of work. That’s why HAC helps rural organizations keep rural residents sheltered as the pandemic and its effects continue.

“We’ve made a specific effort to reposition our grant to helping rural housing nonprofits reorient themselves in the wake of the COVID crisis,” says George. He notes that many rural residents are not set up well for distance or remote issues.

HAC also has affordable housing initiatives for veterans, rural senior housing, those in high-needs regions, such as Native American lands, Central Appalachia, and the U.S.-Mexican border, and those in persistent poverty. Some examples of programs and projects that HAC is offering, include grants for technical assistance, among others, to numerous organizations across the United States.

“Rural communities tend to be more homogeneous racially, but I contest there’s a lot of diversity in rural communities just on geography. We’re only about one-fifth of the nation’s population, but we are spread across 97 percent of the nation’s landmass. So, you have huge differences in communities in Northern Washington as opposed to those in Southern Florida,” he says. “That’s why HAC, along with six fellow housing organizations, urged Congress and the Administration to provide rental assistance, paired with financial support for affordable housing providers to avoid widespread homelessness and the loss of affordable homes.”

The Minnesota Homeownership Center (MHC) partners with a network of agencies around the state. “We’re an intermediary. Our job is to deploy programming and funds that consumers can access through those organizations,” says Julie Gugin, executive director of the MHC. “For example, we have an assistance program through the CARES Act that started at the federal level and is being administered by the state’s housing finance agency. The program is called CHAP, COVID Housing Assistance Program, and there’s $100 million available to support renters and homeowners in Minnesota.
“MHC was awarded $10 million from the CHAP funds, the highest amount of any grantee in the state, to administer assistance to homeowners, not just renters. Homeowners can use the money to pay past-due mortgage payments, utilities, taxes, insurance, or any other direct homeownership-related expense.”

“We have a fairly large Muslim population in Minnesota, and there’s high desirability in that population for homeownership. However, they usually can’t buy with traditional mortgages (because of Islamic tenets regarding debt/interest), so making people aware of what non-traditional mortgages are available is a key goal,” says Gugin. “Similarly, we’re doing research and education about the availability of mortgages for people who don’t have a Social Security number and instead use an Individual Taxpayer Identification Number (ITIN).”

The foundation of MHC is centered around accessible homeownership. “We want to ensure equitable access to homeownership, and we do that primarily through homebuyer education, counseling, and financial coaching,” she says. “We’re also leading initiatives designed to address the racial biases and the systemic racist practices that have been inherent in the homeownership process here in Minnesota and elsewhere. We’re emphasizing outreach in communities of color to make sure they’re aware of what homeownership opportunities might be available to them. We’re advocating for funding that will increase the supply of affordable housing.”

The Urban Institute put together two workgroups — Mortgage Markets COVID-19 Collaborative and The Renters and Rental Market Crisis Working Group. They gathered researchers, advocates, industry experts, policymakers, and philanthropic organizations to share data and policy ideas and develop collaborative solutions that would ensure sustainable homeownership and equity and stabilize renters and multifamily owners during the response to, and recovery from, COVID-19.

Karan Kaul, a senior research associate with the Urban Institute, is active with the Mortgage Markets Collaborative. “We started the collaborative right when the COVID-19 pandemic started in March. It’s a forum — we get together weekly — and talk about the issues that various parties are facing. Of course, the consumer — the borrower — is at the receiving end of all the incoming solutions. We have consumer advocates sharing experiences about what they see on the ground from actual borrowers. What issues are borrowers facing?” he said.

One of the issues he sees right now is many borrowers who have gone delinquent on their mortgage payments but haven’t gotten a forbearance plan yet. For borrowers who are in forbearance, “they might miss three months of payments, and when those three months are up, the lender might ask for a lump sum payment,” says Kaul. “Through the workgroup, we got that resolved with Fannie, Freddie, and VA-backed loans. It continues to be an issue with other loans.

“Homeownership is the single most important way for households to create long-term, lasting wealth. So, it does have a powerful public policy aspect to it. They will find ways to keep as many homeowners as possible in their homes, so they don’t miss out on that crucial opportunity.”