By Robert Daniels
According to most people, the housing and mortgage industry works on three major assumptions. First, houses appreciate in value, which means housing prices almost always rise. Second, demand outpaces supply, which also drives prices up, as more people are looking than homes are available. This phenomenon creates the bidding wars that drive many people to pay more money than they want to for their dream house. Third, location often dictates prices. For instance, you want to live near the beach? Be prepared to pay a premium for living within two miles of a coastline. You want to live in the city so you don’t have to fight traffic on the freeways? That is going to push the price for that loft or condo to hundreds and sometimes thousands of dollars extra every month over a same sized place in the suburbs.
With those assumptions firmly in place, many Americans set out in the current market knowing that it will be an uphill battle. Homeownership is the most consistent way to build generational wealth for the majority of people in this country. But with inflation rising above 8%, the American dream of buying a house and owning your own strip of land is starting to feel more like a nightmare. A nightmare that is likely to continue to perpetuate a wealth gap that has widened every generation since the Civil War.
There are, however, good people in the fight to get more families into homes.
Enter the California Housing Finance Agency (CalHFA) and the HomeFree-USA network of organizations. Through they are two very separate entities — one a self-supporting state agency and the other a Black-founded nonprofit — they are fighting for California families together.
Simone Griffin, Vice President of Affiliate Relations, for HomeFree-USA explains their partnership with CalHFA. “We’ve partnered with CalHFA to provide all manner of housing counseling assistance to California residents through local agencies across the state. These nonprofits provide pre-purchase, rental, homeless and foreclosure prevention counseling services, among others. The goal is to keep Californians housed in safe, affordable dwellings.”
Tiena Johnson Hall, Executive Director of the CalHFA concurs, “Our state’s amazing network of housing counselors provide a vital service to Californians that are struggling with housing-related issues. CalHFA’s partnership with housing counselors is also extremely helpful as we work to serve California’s low to moderate income homebuyers and provide assistance to help residents get caught up on missed housing payments.”
Many of the counselors that Hall speaks of come from the HomeFree-USA network of nonprofit affiliates. That network is made up of 53 collaborative organizations nationwide, including 11 in the state of California. The HomeFree-USA network combines resources between the organizations to stem rising financial concerns and push back against the struggles that affect the everyday people of American minority communities.
Griffin explains, “This really is a joint effort. It’s not just one organization affecting change and that’s the reason we are coming together and have created this network of non-profit organizations — 53 agencies nationwide, who are doing similar work to close the racial wealth gap.”
Linda Jackson, Executive Director of the one of those agencies, the Inland Empire Resource Center, spoke of the benefits of being part of the HomeFree-USA network.
“HomeFree-USA allows our organization to maintain its own unique identity, therefore allowing us to be agile enough to meet the unique and changing needs of our local market. HomeFree-USA also provides a platform of support and training and most importantly serves as a facilitator in bridging national policy solutions to our local communities. This relationship gives us greater access to information, resources, partners and programs which may otherwise be out of our reach.”
Dr. Martin Luther King, Jr., once famously said, “There is power in numbers and there is power in unity.” That is the idea. Individually, they are 53 smaller agencies with 53 voices that may struggle to make change, but together they are 53 agencies with one huge voice and the power to create change.
So, armed with this multitude of entities and the breadth of the ideas, experiences and knowledge that come with it, the HomeFree-USA network sets out to help people reach their goal of becoming a homeowner.
But the journey to homeownership can be a long, arduous road filled with confusing and often aggravating processes, especially if you are a first generation buyer or have special circumstances that need to be taken into consideration.
Circumstances that could include not having a W-2 job because you work in the gig economy, or being part of a military family that may not be able to work and live in one area for a long period of time. What do you do if you don’t technically have “a job” or an employer because you are an Uber or Lyft driver? Or maybe you write blogs for a living, or earn a livable wage from a social media platform? There are currently 59 million people working in the “gig economy.” Another 1.5 million are service members in the armed forces. That means more than 60 million or 1 out of every 6 people in the US falls into one of these two categories.
Griffin says the HomeFree-USA network attacks these issues in various ways. “We’re doing (several) things. Number one, assessing exactly where they are and seeing how we can craft a financial portfolio for them that a lender would feel comfortable with. Number two, speaking to the lending industry about the fact that (they) are about to miss out on a whole market of entrepreneurs because (they) are used to seeing W-2 employees. And three, finding the products that have already said ‘I hear you gig economy, entrepreneurs.’ We can take the products that exist and educate our buyers on small things that they can do to be in alignment with what the mortgage industry is looking for, while also trying to bring the mortgage industry along. Then that’s the way to create a win win win.”
But in 2022 with the struggles of a COVID reality, supply chain issues and rising inflation, it is not only about buying homes but also staying housed as the costs for goods and services skyrocket around us. And there again is Cal HFA and the HomeFree-USA network to the rescue.
There are several programs that are helping those who are struggling with their mortgages and even rent. One of those programs is the National Mortgage Settlement (NMS) program. CalHFA has allocated $300 million to the program for counseling and mortgage and rental assistance.
Jee Lee, President and CEO of the Shalom Center, an organization that is a tremendous help to the Asian communities in Los Angeles, is very proud of the NMS program, “Through the CalHFA NMS program, which is the best, it must have had a financial impact on the marginalized people, such as providing financial education and improving credit by accessing low-to moderate income people who had difficulty accessing valuable information for the future homeowners and prevented foreclosures for many homeowners.”
Lee is not alone in this assessment.
Jackson of the Inland Empire Resource Center agrees, “The California Mortgage Relief Program is the program we are most proud to participate in. This program allowed us to provide meaningful financial relief solution options. This program specifically addressed the disproportionate impact of the pandemic on communities of color. Many in our community worked in impacted service industries and either lost their jobs or had their income substantially reduced, and many experienced illness related to COVID-19. The Mortgage Relief Program helped to bring encouragement and support in bleak times, while allowing clients to gain a foothold in negotiating their new financial situation.”
Amy Holter of the Catholic Charities of Santa Rosa chimed in with this, “We are exceptionally proud of our homelessness prevention and housing stability programming aimed at supporting individuals and families who are precariously housed. In Sonoma County alone, there are upwards of 21,000 people who are precariously housed and at risk of homelessness. Our bilingual and bicultural case managers serve anyone seeking resources to improve their lives or address a current financial shock, with a special focus on the Latinx community, which has been disproportionately impacted by the COVID-19 pandemic in northern California.”
There are extra forces making the uphill climb even more mountainous, and that is the falling amount of disposable income for the majority of Americans. Less disposable money leads to fewer donations to nonprofit organizations and a smaller tax base. Then smaller tax bases lead to fewer grants available to the public. When you put those obstacles together with increasing numbers of families in need, it is a lot of struggle to overcome.
Nora Penaflor, Director of Housing and Compliance for the National Asian American Coalition (NAAC) explains, “One of the biggest problems created by the rising inflation and coronavirus for nonprofits is a drop in grants from major banks. Despite the lesser grants from the banks, NAAC increased demand for housing counseling services. The increasing number of people struggling with depression, due to loss of job, causing nonpayment of mortgages increases the demand for housing counseling services.”
Pedro Rodriguez, Executive Director of the Coachella Valley Housing Coalition (CVHC) looks at the problems from a builder’s perspective. “Although CVHC’s construction team is very proactive in reviewing pricing, contracts, processes, and other potential cost saving measures rising inflation is greatly impacting the cost of materials and services on our housing projects, making it even more challenging to keep housing costs affordable for low and very-low-income families and individuals. We anticipate an even greater need for additional First Time Homebuyer subsidy and other grant funding in 2022 and 2023.”
However, don’t believe all is lost, there is still plenty of money out there. It is just a smaller pot and more people standing around it, but there are still a variety of helpful sources out there.
So how does HomeFree-USA deal with this swirl of differing perspectives and ideas to create protocols and policies that will help bring it all together. One way is to get the leaders of the mortgage industry to understand that the different ethnic groups are not monolithic. All Black people are not the same, nor are all Asians, or Latinos.
Griffin says, “We’re working with the mortgage industry to let them know that approaching diverse communities with an everyone in one box concept is not working. If it was, we would not have the (homeownership) gaps we continue to have. The industry cannot work with and speak to everyone the same way. And it’s not just marketing. It’s about products, services and other financial tools.”
The network also teaches communities of color how to use credit and become mortgage ready. “What can we do to understand the nuances of where we are as minority Americans? How can we bridge the gap, so that Black, Latino and Asian Americans are very clear on what they need to do with what they already have, in order to meet the requirements of the mortgage industry to get a loan? We do this while also speaking to the mortgage industry about what they can do to amend their requirements so that they can bring in more Black and Asian families.”
The passion of Griffin, is palpable and inspiring. In the midst of this latest housing crisis, there is one thing that you can count on – the HomeFree-USA network, their affiliates, and CalHFA will be there, fighting for marginalized people.