Setting the Record Straight: Part 5

This is the last blog in our 5 part blog series, in which we set the record straight on affordable housing.

Theory 5: Homeownership should be restricted to those who can put 20 percent down.

Even though studies have shown that, on the average, owning a home is less expensive than renting, it is difficult for the working poor to accumulate enough money for a dow payment. Michael Sherraden writes that, “One of the constraints on homeownership as a wealth building vehicle for low- to moderate- income households is institutional barriers to credit… Liquidity constraints, stemming from the uncertainty of lenders, prevent the extension of credit even when the working poor might be a good risk.”

Since the mortgage lending crisis began in 2007, down payment requirements have come under scrutiny. In May of 2011, the FDIC and Federal Reserve even proposed a 20% down payment requirement. While this remains unsettled, down payment requirements have remained part of the debate over mortgage finance. Within this debate is the belief that all of the down payment money must come from the borrower himself.

However, loans in the Community Advantage Portfolio do not fit into this new prototype. “A down payment of 1 to 3% of the home price is not uncommon, nor is a minimum borrower contribution of $500.”  Furthermore, a substantial amount of CAP’s borrowers had help meeting their down payment requirements and closing costs.

Using data from 2003 to 2011, Allison Freeman and Janneke Ratcliffe found that “having received assistance toward one’s down payment and closing costs has no significant effect whatsoever on CAP homeowners’ mortgage performance.”

For a closer look at the study, click here.

In conclusion, this five part blog series has used information from the UNC Center for Community Capital to refute claims about homeownership for lower- income families. These findings are particularly interesting because they have held true through recent market turmoil. Michael Sherraden argues that, “Homeownership is an important component of a long- term asset building strategy: the accumulation of small amounts of savings in an IDA can be put toward a home, which in turn can allow owners to send children to college, start small businesses, or pass along wealth to the next generation.”

New Century IDA is proud to be a part of the asset uilding movement by helping low- to moderate- income working families in Forsyth County become first time homeowners!

This home was purchased by a New Century IDA graduate in 2009.

Setting the Record Straight: Part 3

This is the third blog in a series in which we refute common misconceptions about homeownership.


Theory 3: Lower- income homeowners erode their equity gains through excessive borrowing.

Another criticism of homeownership as an investment is that lower income homeowners might diminish their wealth gains through excessive borrowing. For low- and moderate- income households to recognize the benefit of accruing equity, they must not borrow that money back for other uses. Allison Freeman and Janneke Ratcliffe from UNC’s Center for Community Capital used data from the Community Advantage Program (CAP) to determine whether or not low- and moderate- income homeowners increase their levels of borrowing because of the accumulation of home equity.

Freeman and Desmarais found that home equity of more than $150,000 corresponds to an average increase of $1,000 in credit card debt. However, “the accumulation of equity over time shows a smaller relationship to the accumulation of credit card debt.” Notable borrowing against the home occurred only when equity levels exceeded $100,00 and never reached a scale that would decimate equity based wealth.

The study concluded that while there appears to be some association between the accumulation of large amounts of equity (more than $150,000) and increased debt, “there is no evidence that debt accumulation by CAP homeowners offsets the wealth- building effect of home equity.”

For more information on this study, click here.

Hidden Costs of the Foreclosure Crisis

Even though statistics indicate that foreclosure activity has slowed, it is anticipated that the foreclosure crisis is only halfway over. The Center for Responsible Lending expects that there will be 3 to 5 million more foreclosures in the next couple of years. This drawn out foreclosure crisis has long lasting effects for families that lose their homes as well as the communities in which they reside.

To comprehend the severity of the ongoing foreclosure crisis, check out these stats: In 2003, one out of very 38 homeowners was seriously delinquent (90 days or more past due on their mortgage payments) or in foreclosure. Today, that number is one out of ten.

Some repercussions of the foreclosure crisis are easily visible. The displacement of families, crime issues as properties go vacant, shattered credit scores, falling home prices, and the loss of equity can all be seen and felt. Other consequences are less immediately obvious but have lasting impact.

Bruce Lesley, president of First Focus, an advocacy group for children and families, said, “The bad thing about this recession: It’s been long and deep. One of the interesting things is that it has given people time to look at the secondary effects of things.”

The effects are devastating for children. Eight million children, or one in ten children, will be directly affected by the foreclosure crisis before it is over. This includes children of homeowners as well as children of renters evicted due to a foreclosure.

Julia Isaacs, of the Brookings Institution, called children the “invisible victims” of the foreclosure crisis. In addition to the emotional trauma of leaving home, there are implications in educational development as well. Lesley says, “Dislocation is like missing a whole month of school.” When children are dislocated, the chances of being held back or dropping out increase dramatically.

Foreclosure also has negative health impacts on children and families. Nutrition is often sacrificed when a family is cash- strapped and visits to the doctor are less frequent. There is also a correlation between the increase in foreclosures and increase in medical visits for mental health, preventable conditions, and stress- related complaints. It is estimated that 2.82 million foreclosures in 2009 led to 4.18 million additional non-elective hospital and ER visits among those aged less than 65. These ER visits cost an average of $2,521 per visit, which makes a total of $10.5 billion spent on additional visits in 2009 alone.

Finally, the foreclosure crisis has affected many communities. James Brooks from the National League of Cities says that the loss of property tax revenue due to foreclosures has lead to cuts in services, such as swimming pools and senior centers. Budget cuts have also resulted in less community policing. At the same time, vacant foreclosure properties are destabilizing neighborhoods and vacant buildings can be a magnet for crime.

While it is easy to see the immediate impact of foreclosure, these are lasting impacts that will have repercussions on children, families, and communities for years.

For more information, read Amy Hoak’s article “Three Hidden Costs of the Foreclosure Crisis.” 

Avoid the Traps of Predatory Lenders

Unfortunately, predatory lenders are on the loose, and they will hunt you down. If you are thinking about refinancing or buying a new home, it is important to know how to spot predatory lenders so you don’t get trapped. The National Fair Housing Alliance has provided some very useful tips to help avoid the traps of a predatory lender. Here are a few of their tips:

• The mortgage broker quotes one interest rate but tries to charge you another
• There are unusual and unexpected fees
• The mortgage broker says your credit score requires a higher interest rate
• The loan is tied to a prepayment penalty
• Right before closing, the lender throws unexpected changes at you
• The mortgage broker asks you to sign blank forms

Be sure to check out the video below from Freddie Mac.

You can also get more information at www.questionsprotect.org or by calling 1-866-222-FAIR. If you know of a scammer, report them at 1-888-995-HOPE.

Maintenance Tips for New Homeowners

Regular home maintenance is a major responsibility of a homeowner. While at times it can seem like quite a chore, staying on top of regular maintenance is important for many reasons. It is necessary in order to protect the investment in your home and to prevent major repairs in the future that could be very costly. It can also make your home operate more efficiently, saving money on utility bills.

It is likely that first time homeowners could run into some home maintenance issues that are unexpected. Fortunately, the North Carolina Housing Finance Agency provides some home maintenance tips that are very helpful to new homeowners, which  you can view here.

For example, you should inspect the exterior of your home annually. During your inspection, you should check the foundation for cracking, check paint for peeling, and check weather stripping and caulking around doors. You should also drain and shut off your outside faucets before winter and clean your gutters and downspouts in the fall and spring.

To extend the life expectancy of your hot water heater, you should drain a couple of gallons of water from it once or twice a year. You should also have your chimney cleaned each year before using your fireplace, and you should change the batteries in your smoke alarm twice a year. Additionally, you should check the filters on your heating and cooling unit monthly, and you should have the unit serviced annually.

These are just a few of the home maintenance tips that you should be aware of! For a more comprehensive checklist for home maintenance and repairs, click here for this list provided by checklists.com.

New Century IDA is fortunate to partner with the Center for Homeownership, who offers classes to all IDA participants on home maintenance. By learning home maintenance, participants learn how to preserve their investment which enables them to enjoy it even more. To utilize services provided by the Center for Homeownership, you can contact them at 336-773-0286.

Have you encountered any unexpected home maintenance issues? What home maintenance tips do you have for new homeowners?

Improving Housing Market in 2012?

As we kick off a new year, there is optimism that 2012 may mark the beginning of a turn for the better in the housing market. Tom Lawler, an independent consultant, sees potential in the continued dearth of newly built homes, a slowly rebounding job market, and a population in need of housing. Lawler is not alone. Goldman Sachs has stated that the housing-price bottom is in sight and they expect a 30 percent gain in home prices over the next decade.

The real estate market is anticipating an increase in housing demand for 2012. More specifically, Lawler is predicting an increase in headship rates, which is defined as the number of people who qualify as the head of household. Since 2005, the number of new households formed each year has dropped to less than one million. This is partly due to the fact that young adults have especially been hit by the poor job market, making them more hesitant to become heads of household. Young people have been staying in school longer, moving back in with their parents, or living with roommates. Since these are not permanent housing situations, it suggests an emerging, pent up demand for housing, Ultimately these people will be forming their own households.

The Joint Center for Housing Studies is also optimistic. It projects total household growth at about 12.5 million to 14.8 million over the next decade.

When Americans begin to look for housing, the market will be further impacted by the fact that there are relatively fewer new homes under construction. As a result, people will turn to the stock of existing homes, which will help to clear the market by purchasing homes that are now sitting empty.

Another factor in housing demand is the job market. The number of job layoffs has been steadily declining. As more people find work, they will be more able to qualify for a mortgage and more likely to purchase a home.

Glimmers of hope like this are creating optimism among those involved in the housing industry. For more information, read Loren Berlin’s article “Will Housing Market Finally Rebound in 2012?” published in The Huffington Post. 

Fair Housing

Last Friday, I attended a seminar on “Affirmatively Furthering Fair Housing: What is Required” which was presented by the North Carolina Fair Housing Project. The session was very informative, and I thought you might be interested to learn more about fair housing as well!

The Fair Housing Act was passed in April of 1968. It was in passed in the midst of the Civil Rights Movement in response to housing segregation based on race. It prohibits discrimination in housing based on the 7 “protected classes” which are:

• race
• color
• national origin
• religion
• gender
• familial status
• disability

Under the Fair Housing Act, no one can refuse to rent or sell housing, refuse to negotiate for housing, make housing unavailable, or deny a dwelling based on any of the protected classes. It also prohibits falsely denying that housing is available or trying to persuade a homeowner to sell or rent to a particular type of person. The ultimate goal of the Fair Housing Act is to end segregation, primarily based on racial and national origin.

The Fair Housing Act challenges HUD to do more than just refrain from discrimination. HUD must also “assist in ending discrimination and segregation,” and it is required to administer programs in a manner that “affirmatively” furthers the policies of the Fair Housing Act. Local programs that receive money from HUD must meet these same standards.

Legal Aid of North Carolina is working to protect the residents of North Carolina by promoting fair housing with the North Carolina Fair Housing Project. If you live in the state of North Carolina and you believe your fair housing rights have been violated, contact HUD’s regional office in Atlanta at 404-331-5140 or 1-800-440-8091.

Check back soon to learn more about what Forsyth County is doing to affirmatively further fair housing, particularly in regard to those with disabilities. 

IDA Success Stories: Ms.T

Ms. T, a mother of three, was already enrolled in the IDA program when disaster struck. One afternoon she received a call that a fire had destroyed her apartment and all her belongings. To her get her family back in order, Ms. T was enrolled in the Self-Sufficiency Program through the Experiment in Self-Reliance. This program could assist with payment of utilities so she could focus on using her earned income for her IDA payment and rent. Ms. T was moved to another apartment and continued to work. Although the Self-Sufficiency Program was there to support her, Ms. T insisted on providing for her family with her own income.

Soon after her move, Ms. T lost her employment. Undaunted, she continued to search for an alternative. She was able to find employment cleaning homes, making just under $200 per month. Despite this hardship, she kept a positive attitude and continued to make her IDA deposit monthly. Ms. T was determined to find better employment, and applied for several jobs. After a number of interviews, she was offered and accepted a position with Bell South. With her increased income she was able to save above the $1,000 required by the IDA program.

After experiencing much heartache, Ms. T was able to achieve her dream on May 8^th, 2001. On that date, Ms T closed on her first house, and is looking forward to making it a home for her and her children.

An Interview with IDA Partner Sylvia Neely

What does the Housing Authority do for this community?

The Housing Authority of Winston-Salem’s (HAWS) mission is to create and maintain sustainable communities through partnership to benefit the residents of Winston-Salem. The vision of  HAWS is to create a self-sustaining affordable housing and real estate development organization.  The Section 8 Housing Choice Voucher Program is a subsidy assisted housing program that provides adequate, affordable, viable, quality housing, and community supportive services emphasizing self-sufficiency for low and moderate income families. 

What is your role with the organization?

My position at the Housing Authority of Winston-Salem is the Family Self-Sufficiency  (FSS) Coordinator.  My role is to coordinate resources and services for Section 8 Housing Choice Voucher Program families through the public and private sector to enable assisted families to achieve economic self-sufficiency.  The objective of the FSS Program is to reduce the dependency of low income families that are receiving public assistance such as welfare assistance, Section 8, or any other local rent or homeownership program.

The FSS Coordinator will try to provide the resources and services that are listed in the program family’s Individual Training and Service Plans by linking them to resources, services, and economic opportunities that will lead to employment, economic self-sufficiency and homeownership.  A Program Coordinating Committee is formed by the FSS Coordinator to obtain commitments from service providers who will perform the hand-on services to the FSS participating families.  The FSS Coordinator will monitor the progress of the participant’s plan, and establish an escrow account for them once they have obtained an increase in earned income while trying to complete all other goals listed in their Individual Training and Service Plan.   It is the FSS Coordinator’s responsibility to see that the family is paid the balance in the FSS escrow account upon successfully completing their Contract of Participation. 

Why did you become a part of the IDA Program?

Since 75% of the Section 8 FSS participants have a final goal of purchasing a home through the Section 8 HCV program or purchase homes on their own without Section 8 subsidy, HAWS has partnered with the New Century Individual Development Accounts Program to assistant in providing pre-post homeownership training, financial economics, and down payment assistance to our participants.  I highly recommend this program, even though it is optional for them to enroll in the IDA program.

How have you personally seen this program benefit people and the community?

I have personally seen the IDA Program benefit people and the community by providing a match of $3,000 or $2,000 to the client’s $1,000 saved out of pocket. It is required that the IDA clients save at least $1,500 in which it allows them to have some money left in reserve since most lenders require homeownership applicants to have money left in reserve, and they are not using all of their money for down payment.   Also, it benefits the low and moderate income community in purchasing a home, since most of them have a limited amount of income, and wouldn’t qualify on their own to purchase a home since they would have to come up with at least 3% - 5% in down payment assistance. The program also benefits clients in budgeting and credit repair.  The coaches, are beneficial in keeping clients on track of becoming mortgage ready.   If it wasn’t for the IDA program there will be less homeowners in the community.

The Housing Authority of Winston-Salem’s (HAWS) mission is to create and maintain sustainable communities through partnership to benefit the residents of Winston-Salem. The vision of  HAWS is to create a self-sustaining affordable housing and real estate development organization.  The Section 8 Housing Choice Voucher Program is a subsidy assisted housing program that provides adequate, affordable, viable, quality housing, and community supportive services emphasizing self-sufficiency for low and moderate income families. 

IDA Success Stories: Laura Bond

Unfortunately, I became disabled in 1995 at 35 years of age, and was forced to live in a housing assistant living apartment. After living there for seven years, I qualified for a Section 8 voucher and was so happy and thankful to get out of that apartment setting and get my own place again.

I never imagined being a home owner. I took the classes IDA offered, and welcomed the education. I learned I can be a homeowner. Although I was on a tight budget I learned ways to budget my money, pay off debt, save for a downpayment [for my home], and that there is home warrantee insurance available if things should break down. I am overwelmed with joy at the thought of having my own house. I couldn't be more proud and thankful for the program.

Sincere thanks for helping me take the steps to have such a blessed future.

Thanks again, Laura Bond

IDA Success Stories: M.M.

Had I been asked to write this success story two months, I would still have a lot to say, and a whole lot more time to say it. I didn’t have house then, but thanks to the IDA program I had already accomplished two things I thought I’d never.

The first was not spending money on things I didn’t need. For years the use of credit cards were my biggest temptation and downfall. The IDA program helped me distinguish between things I needed and things I wanted. Learning about interest rates on credit cards made me realize that the now broken VCR I charged 11 years ago actually cost me $600 dollars. The closet full of clothes I charged (now all too small) cost me four times the good bargain I thought I had found, and with all the money I charged for meals at fancy restaurants (that led to the clothes being too small), I could have almost bought my own restaurant! I was happy to cut the cards up.

Getting rid of them helped lead me to the second accomplishment – saving money. One of the main principles of the IDA program is saving money. And I was able to do it! Believe me, pre-IDA, no bank account of mine had ever seen a four digit balance for more that a couple of days!

That leads me to why I’m short on time today. When my savings account hit $1,000, Sue Simmons told me to start looking for a house. So I looked. And I looked. I looked at houses too small and at houses too big, houses with no closet space, houses with no counter spaces; ugly wallpapered walls, hideous carpeted floors. Until one day, my real estate agent drove me into a perfect driveway that led to a perfect house! I asked her to write the contract to make a bid on it right away.

In a blur, my loan was secured, the house was inspected, and the lawyer was contacted. And at closing, there sat Sue Simmons, along with Mr. Stewart from ESR, providing support and encouragement to the very end, not to mention the checks they passed to the lawyer on my behalf! It was all so simple, and I am so very thankful.

Today, I’m in my home with a garage full of junk waiting to be put away. And every night, I get down on my knees to thank God for that garage and the house to which it is attached, for my family and for the IDA program.

IDA Alumni Stories: Dierdre Davis

My name is Dierdre Davis.  I am a 2004 graduate of the IDA PROGRAM.  In late 2002 I was told about a program that ESR had that would provide assistance for home ownership.  Being a single mom of two boys I knew I wanted to have a home for us, where they could run around like boys do.  After inquiring about the program it seemed to be something that I could benefit from so I enrolled.  At that time I only thought that it was something to help me with the down payment on a home for me and my boys but I got much more out of the program. 

The financial literacy program was an asset to me and I continue to keep what I learned at the forefront of my mind.   I found out that before you purchase a home there were other things that needed to be in order; that it wasn’t just about having a monthly income to pay the mortgage.   I learned that in order to be a successful homeowner there were steps that I had to take to get my finances in order.   Those sporadic trips to the shopping mall or out to eat had to be limited.  To help keep me on track me I taped a picture of my dream house to my favorite credit card.  Every time I pulled it out I would see what I was possibly giving up.  I learned to track every penny that I earned which helped me to really understand how much house I could afford.  

Having the support of my Success Coach, Mrs. Bianca was great because she was with me every step of the way and gave me a lot of encouragement.  Because I was serious about what I wanted, I went into the class wanting to learn.  I definitely got more out of it than what I was expecting.  I feel that the financial literacy program is something that is very much needed and I encourage all the people that I know who plan to purchase a home to look into this program.  If you are educated about preparing to purchase a home and how to keep it once you purchase it, you have a win-win situation.

Empowerment through Housing and Family Involvement

David Blake Lucas, a Housing Counselor with Kingdom Community Development Corp., and former AmeriCorps*VISTA, shares his favorite story from when he was a housing counselor in Boston, MA.

As a housing counselor with Welfare to Work in Boston MA, Blake supported a single mother in finding housing in Canton, MA, an extremely wealthy, upper middle and upper class area just south of Boston, with a Section 8 voucher. He learned, years later, this was a gateway to continued life success.

The second part to the video is about the benefits (and necessity) of complete family involvement in the home ownership process. He shares stories from his work with Habitat for Humanity, and how they were able to get even the youngest of children involved (through non building ventures).

Andriana Bicanin

AmeriCorps*VISTA

New Century IDA

From Client Turned Success Coach, the Story of New Century IDA Success Coach Jackie Baldwin

To the single mom, single dad,  the couple, to the young, & the old whom desires to be a homeowner: IDA is the doorway to a new beginning. ~Jackie Baldwin



ESR/IDA Success Coach,
Jackie Baldwin

 Ms. Baldwin was a client of Experiment in Self Reliance’s (ESR) Self Sufficiency Program, and a yearly participant of ESR’s EITC tax program when she gained knowledge of the New Century IDA 1^st time Homeowners program, and immediately looked into it and applied. One of her dreams has always been to become a homeowner, but she thought this was something she needed a husband for; dual income. Despite her preconceived notions of needing a husband in order to buy a house, she excitedly applied and in December 2007, she became a proud homeowner. She is now also an employee of ESR’s team as an IDA Success Coach, who helps countless clients achieve their dreams of homeownership.

Jackie has always prided herself in taking care of her household, while raising her three teenage daughters.  Even prior to IDA participation, she believed in paying rent on time and maintaining her credit. She came into the program with minimal debt and no collections. She had the support of IDA, her daughters, and her friends and family to assist in the process of making this dream come true.

When she sets her mind to something, she follows through. “I didn’t talk about it,” said Jackie, rather she “dug heels in, and set the calendar to accommodate the new schedule of  the IDA curriculum, and to soak up all the knowledge and education they were offering.” Even though Jackie already had good credit and was paying her bills on time, she learned a lot about credit and homeownership through the economic literacy classes. She wanted to know not only how to get into a house, but how to stay in it as well. The financial literacy classes and the monthly required meeting with her success coach were the required tools for people in all stages of credit and savings. Simply said, IDA fully equips one for what is needed to know about purchasing a home. For Jackie, each class brought her closer to her dream and her “ears were ringing with excitement.”

Jackie attended Financial Literacy classes and meeting with her success coach, in addition to being a full time mom, full time employee, and attending evening and weekend college courses at Winston-Salem State University. “It was a plateful”, she explained, but this was her and her children’s dream and she was going to accomplish this. She had the determination and peace of mind to persevere and reach her dream of homeownership. When praised for her determination and success, she immediately points out that there are so many people that have done this before her so she knows that she can also obtain her goal as well.

Although she described her journey as exhausting, she was realistic throughout as she incorporated exercising and changing her eating habits to be able to withstand all the tasks at hand. Ms. Baldwin has a strong belief system, and as a believer she also makes time for church and prayer. Her relationship with Christ was and remains her strength. She relied on friends and family heavily to help with her children. She spoke of how she  mothered  her children over the phone, giving advice and listening to a little sibling rivalry in between classes. Fortunately her girls were as focused on schooling as she was. They were great students and were a great encouragement to her as well, challenging her to make Dean’s list as they made honor roll.

Successful graduates of the program time and again share how they involved their children in the home-buying process. Jackie explained that it has a “trickle down” effect within the family.  By including her children in this process, she put the ball in their hands by reminding them that “they” were buying a home and change had to take place with everyone. With her family, they each sacrificed by not eating out, and doing each other’s hair and nails. She asked them, “How are we going to achieve this goal?” They also rented movies instead of going, cut down cable, and got over not having a summer vacation. Instead, everyone had a summer job. Cell phones were not as a necessity as they thought.  There was always the house phone. When they did decide to treat themselves they went to the discount movie theater, and used coupons to eat out. This way she laid the responsibility in their palms- “You want your own room; this is what it’s going to take.” And despite reservations of cutting some of the luxuries which they were accustomed to, such as eating at their favorite restaurants, she learned to cook those favorite meals, and she “Turned out to be a pretty good cook after all.” :)

“If you have a desire to be a homeowner, there is no better way to be a homeowner than to be an educated homeowner.”

She really loved going to class and hearing the presenters- all of the facilitators brought interesting and fresh information to help her better her life. She stayed after class and everyone always had time for her. This experience helped her build new relationships. She could ask questions and get answers, even ones she was hesitant to ask. Everyone involved with the program had an obvious commitment to help each and every one of the clients- Jackie could feel that the staff was just as excited to teach as the students were to learn.

As for classes, she was very impressed with the Psychology of Money; the viewing of money and the reducing debt; learning about debt ratio; and she really enjoyed the Investing for the Future & 401k class. She particularly liked the latter because she has always believed in saving and preparing for the future, and this class was full of helpful info and resources and connected to the way she already lived. She has always had the heart and mind of a saver, and this course helped to further strengthen her skills. The classes supported and fostered her belief that, “It’s very important to not only live for today, but prepare for tomorrow”.

The Economic Literacy classes taught her how to accurately read a credit report. She now understands that everyone has a credit history and you need to have a relationship with your credit because, as she says, “It’s a part of me, who I am on paper.”

Her family has been extremely supportive, and they are all proud of her and her achievements. Everyone has shown their support and congratulate her efforts to stick to her goal of homeownership, staying on task, and teaching them the benefits of saving, budgeting, and the power and purpose of spending. She is passing on what she has learned about the power of controlling your spending habits- first of all to her family and to her clients. This endeavor showed her young daughters that “Yes, you can do this. Dreams can be attained with a little hard work, determination, and putting things into perspective. Your paycheck may not change, but you can change your mind set, behaviors,  and thought process with spending.”

“This is something that has enhanced my life, and helping someone’s dream come true (is my favorite part of working here).”

Her motivation on her job as an IDA Success Coach is collaborating with her peers, and ensuring them that homeownership can be obtained. Her motto is: if you can pay rent, you can pay mortgage if that is your desire, so when they come in they embrace the same motto. Clients gain understanding of setting a goal and doing what it takes to achieve that goal. There is a starting gate and finishing gate, and to get through, they have to go through the ups and downs, behavioral changes, budgeting, couples coming together and agreeing to disagree, and putting their budgets and dreams on paper. Their eagerness inspires her to pour back into them what was poured into her. It gives her the greatest pleasure to attend a closing of a new homeowner; watching the excitement as they sign the papers and retrieve the keys to their new home, and seeing their dreams come true. It is absolutely priceless.

This program falls to first time homeowners who are apprehensive. Because of the economy they need to know there is safety in the IDA program. When these clients come to the lender they are educated, credit ready, and very excited. They have ongoing classes, and becoming a part of the IDA program ensures realtors and lenders ready clients.

Her words of encouragement to those contemplating applying to the IDA program, “Nervous is a good sign! It shows that you know this is a commitment, a lifelong commitment. It’s okay to be nervous. The sad part would be not to give it a try. Sad part would be to put your dream on the back burner.” And that, “A new class is starting in April, if that’s too soon, there are quarterly classes. And if you don’t have the best of credit, it’s our job to help you clean that up and get you ready to secure your first mortgage.”

IDA Programs Help the Entire Community:

Clients are taught financial literacy, resolve their credit issues, and through

homeownership forge a bond with their community. They are provided financial

education that helps break generational poverty

Local government and communities benefit from increased property taxes that goes

towards police, fire departments, and schools; helps in the creation of educated consumers.

Lenders, Real-Estate Agents, and Insurers are given access to a pool of mortgage

ready, and buyer educated clients.

Written by:

Andriana Bicanin

AmeriCorps*VISTA

New Century IDA

IDA & Asset Building Collaborative of N.C.

&

Jackie Baldwin

Success Coach

New Century IDA

Stabilizing Communities

Not everyone knows what an IDA program is, or how it can help their community. IDA stands for Individual Development Account, and they are matched savings accounts that are matched either 2:1 or 6:1. That means, for every $1 the client saves, 2, 3, 4, 5, or 6 dollars is put into the account. The end result is a downpayment for the clients dream home.

When you hear, "We help working members of our community become first time homeowners", or "matched savings account", what is the first thing that pops in your head?

A few that are at the top of the list are:
1) "What about subprime loans?";
2) "The housing market crashed, how in the world can this help?";
3) "How do IDAs work; is it just money and houses given away?"

Well, here are the answers to all those burning questions:

1) Not a SINGLE person in the history of the New Century IDA has received a subprime loan. Clients sit with the wonderful loan counselor, Bianca Green, and discuss their options. She works with and for the clients, and always has their best interest in mind. Everyone behind the scenes have the clients interest in mind.

2) Yes, the housing market crashed, but right now is the BEST time to buy a house! Builders have built homes, but they aren't selling; there are foreclosed homes that are not bought; and prices are low. If people buy homes now they are buying them at their lowest prices, and when the market is better they have the option to sell at a higher cost.

And how can this help? How does this NOT help? Families are learning the importance of savings through the financial literacy classes. I was taught my entire life, through school, how important it is to save, but that wasn't enough- I also needed to know how to save.

Financial literacy classes teach clients how to save, cut costs, and reach their dreams. When a parent is taught how to save they pass this knowledge on to their child. Their children then use this knowledge at a young age, and they live their lives saving and spending in a responsible, financially educated manner. Even those without children pass this knowledge to family and friends. As a current client said, "The IDA program is people helping people help people".

Communities benefit from the additional taxes homeowners pay that goes to the fire department, school district, police officers, and other publicly funded institutions. Buying a home is also a process. Builders are receiving pay for building homes, lenders are used for acquiring mortgages, and then there is homeowners insurance (insurance agents receive money), and the ability for the client to spend money on their house because of their newly acquired savings knowledge, and ability to responsibly spend.

Since the inception of the New Century IDA in 1999, less than 10 people have defaulted on their mortgages, and over 440 people have successfully bought houses. The default rate is far below the national average, and those who continue to own homes also continue to reinvest in their communities through savings, responsible spending, and paying their taxes.

3) IDA's are not just money and houses given away. Clients spend months going to financial literacy classes; they are required to save $1500 of their own dollars; and they meet with their success coaches on a required, regular basis.

New Century IDA clients are single parents and couples; they are young, old, and may be hesitant to buy a home because of previous credit issues, and what they read on the news about the job and housing markets.

I recently interviewed a client turned success coach. She shared her experience as a single mother who was not only attending financial literacy classes and meeting with her success coach, but she was also attending night classes at a local University- on top of working full time. This is a normal story for New Century clients. New Century IDA clients are workers, parents, couples or single, their commonality is that they are looking to grab their piece of the American Dream, and they are working very hard to do so!

When you support the New Century IDA (and IDA programs in general), you are supporting responsible economics, breaking the cycle of poverty, and empowerment of the individual and community. Everyone walks away a winner.

Click here for more information on the New Century IDA, or peruse through this blog. You can also ‘like’ us on facebook.

Click here for more information on North Carolina IDA and asset building initiatives

Also check out Asset for Independence, and the Center for Economic Development for more information on the assets movement, and how to become a part of this innovative and life changing movement.

Andriana Bicanin

AmeriCorps*VISTA

the New Century IDA, Housing Department

the IDA & Asset Building Collaborative of N.C.