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 4

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


There has been a long- standing debate over whether it  makes more sense for lower- income people to rent rather than own, and this has gained even more traction since the housing crisis began in 2007. Some argue that renting is less expensive than owning, but this had not been analyzed for lower- income households.

Sarah Riley and Hong Yu Ru studied data from participants in the Community Advantage Program from 2003 to 2010 to put this theory to the test. They calculated costs of both owners and renters. For owners, the included mortgage payments (including property taxes and insurance), the opportunity cost of holding equity in the house, mortgage closing costs and origination fees, homeowners association fees, maintenance expenditures, annual depreciation, the observed net property appreciation, and the tax benefit received each year.

The results may surprise you. The study found that the median owners’ user cost was $36,000 from 2003 to 2010. The median cumulative equivalent cost for renters was $41,000. Riley and Ru found that “the initial period of house price appreciation was sufficient to offset the subsequent higher owners’ user costs as a whole.” They estimated that it was necessary for the house price to appreciate about 2% annually to ensure that owning was not more costly than renting for this time period.

It is important to remember that CAP borrowers all received fixed rate, fixed payment, and competitively priced mortgages. Another factor is the cost of renting, which has been increasing in recent years. As the cost of renting continues to rise, Riley and Ru suspect that “homeownership may actually be gaining relative financial advantage over renting.”

For more information, check out Riley and Ru's study, "The User Cost of Low- Income Homeownership: 2003- 2010."

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.

Setting the Record Straight: Part 2

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


Theory 2: Homeownership crowds out other investments, while renting allows households to diversify their investments.

There is speculation that homeownership leaves some households with under-diversified and, therefore, riskier portfolios. If this is true, it would be particularly concerning for lower- income households who invest a greater portion of their net worth in housing.

Allison Freeman and Janneke Ratcliffe from UNC’s Center for Community Capital put this theory to the test. They used data from homeowners that participated in the Community Advantage Program (CAP) to determine whether or not they restricted their investments in other financial instruments as a result of having their investment concentrated in their home.

They found that when renters were given the same equity amounts as a matched set of homeowners in 2008, the simulated effect on their investment portfolios was a shift of less than one cent. They found no evidence that investments or savings suffer from having funds tied up in homeownership. Freeman and Ratcliffe concluded that affordable homeownership, “serves as an effective means for promoting stable wealth- building for low to moderate income households through the forced- savings mechanism of equity accumulation.”

For more information on this study from the UNC Center for Community Capital, click here.

This home was purchased by a New Century IDA graduate in 2007.

Setting the Record Straight: Part 1

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

Theory 1: Homeownership is not a reliable wealth building strategy for lower- income families.

There has been debate about the wealth- building effects homeownership offers lower- income people. However, data from the Community Advantage Program shows that “when low- and moderate- income families purchase homes they can afford with mortgages that are sustainable, wealth happens.”

This is supported by the Community Action Program’s (CAP) rates of equity appreciation relative to other investments in which low- to moderate- income families could have put their down payment funds. Home equity gains are a primary factor of wealth building and give home owners an advantage over renters. As the foreclosure crisis was beginning to unfold from 2005 through 2010, homeowners saw an average gain in net worth of more than $11,000, while the matched sample of renters only gained an average of $742. It is also interesting to note that non- housing wealth grew faster for owners than for renters over this period, and there was no significant increase in liabilities for owners compared to renters.

It is also important to state that homeownership doesn’t just generate wealth, but it can also act as a buffer against losing wealth in tough economic times. Measuring from 2005 to 2010, home owners were able to retain greater net worth through the financial crisis.

CAP also found that homeownership has a significant beneficial effect on financial satisfaction and overall stress. The statistics show that homeownership truly is an effective means of long- term wealth building for working families, even in times of economic upheaval.

For more statistics from the UNC Center for Community Capital, click here.

Homeownership Offers Social and Economic Benefits

A study conducted by the UNC Center for Community Capital finds what New Century IDA has been promoting all along. Homeownership brings a wide range of social and economic benefits to low income communities.

Even though homeownership has long been thought of as a way to revitalize neighborhoods and build household wealth, the foreclosure crisis has caused some to question this in recent years. But this new study confirms that homeownership offers many benefits to a community.

For example, there is a clear link between homeownership and how low income homeowners perceive the level of crime in their community. Homeownership leads residents to take steps to protect and secure their neighborhoods which reduces crime levels. 

Mark R. Lindblad, the center research director, stated that “The housing downturn and foreclosure crisis have raised questions about the role of homeownership in stabilizing low- income communities. Our findings demonstrate that, when coupled with traditional, fixed- rate mortgages, homeownership reduces residents’ perception of crime as a key problem for their neighborhood.” Perceptions of crime are important because they affect residents’ mental and physical health.

Homeownership has faced critiques amidst the mortgage crisis, and some critics have said federal housing policy has unwisely promoted homeownership for lower- income households. However, there are several problems with this critique. One problem is that it neglects more compelling causes of the housing downturn and foreclosure crisis, particularly the lack of financial regulation of mortgage products. The root cause of the foreclosure crisis was not homeownership, but unfavorable subprime mortgages.

The second problem is the tendency to conflate lower- income homeownership with sub- prime mortgages. While lower- income and minority families did receive disproportionally higher rates of subprime mortgages, the unfavorable mortgage terms were largely to blame for the higher rates of mortgage delinquency among subprime borrowers. Research has found that low- income households with traditional, 30 year, fixed rate mortgages do sustain homeownership.

Since its beginning in 1999, New Century IDA has promoted homeownership as a means to build wealth and break the cycle of poverty. This study conducted by UNC affirms that homeownership does produce socially desirable outcomes for lower- income households. The study concludes that it is in everyone's best interest to develop policies and practices that promote homeownership.

For further reading, results of the study can be found in the article "Sense of Community and Informal Social Control Among Lower- Income Households: The Role of Homeownership and Collective Efficacy in Reducing Subjective Neighborhood Crime and Disorder" published in the American Journal of Community Psychology.

Congratulations, Wave 29!!

Congratulations to Wave 29, who graduated from New Century IDA Tuesday, March 27. It was a great evening for all involved. You can see the excitement in the pictures below.

Wave 29 Graduates

These kids came to celebrate with their parents.
They are all excited about moving into their own home!

Thanks to our sponsors:
 Francine Taylor from Southern Community Bank
and Dee Oliver from Allen Tate Realtors!

Throughout the evening, graduates celebrated their achievements. It required hard work and determination for each of these individuals to complete the financial literacy curriculum and to graduate from New Century IDA. They were all reminded that this is not the end but just the beginning. As they begin looking for homes over the next few months, they will have to keep practicing what they learned in the IDA program. Most importantly, they will continue to budget and save! 

It was a great night, and we look forward to celebrating with each of these people again when they close on their homes!

To share in the excitement of the evening, watch Twana Roebuck, Executive Director of ESR, deliver closing remarks and cheer on the graduates!

Evolving Household Dynamics ("I am Woman, Hear Me Roar")

As the economy and job market have changed over the last several years, it is no secret that family structure and the way families operate has changed in order to adapt. In the latest Time Magazine cover story “Women, Money, and Power,” Liza Mundy writes, “Not since women entered the work force by the millions after WWII has America witnessed economic change on this scale.”

The workforce is changing. It has become common for married women to work and even to outearn their husbands. In 2009, nearly 4 in 10 working wives outearned their husbands, which is an increase of more than 50% from 20 years before. Women also make up 60% of college students and earn a majority of doctorates and master’s degrees. Some experts predict that within the next 25 years professions such as law and medicine will be dominated by females.

There has also been a dramatic increase in the number of single parent families. 41% of babies are now born to single women. Young women are acutely aware of the potential that they may be the sole earner in their household and that supporting a family is a far greater responsibility than just supporting oneself.

As more women are the co-breadwinners and primary breadwinners for the families, assumptions about how the household works are changing. Women’s earnings and financial status give them more economic influence both at home and in public. It is predicted that rates of cohabitation and single living will continue to rise because women can afford to wait. Financially secure single women are a growing market for restaurants, travel, and real estate.

The growing trend of female supported households is evident at New Century IDA. The majority of IDA clients are single mothers. Each of these women have earned income with which they support themselves and their families. A common thread among these women is that they are motivated to participate in New Century IDA and become home owners because of their children. They all want to have a stable environment in which to raise their children, and they want to give their children a better life than they had. Many of them are also proud to show their children what they can accomplish on their own, without the help of a man.

If the present trends continue, by the next generation more families will be supported by women than men. Has your family structure changed over the years? Let us know what you think, then take this quiz to see who holds the power in your household!

Time Magazine Cover March 26, 2012

LaTeesha's Story

Even though you may check our website and read our blog, to fully appreciate how New Century IDA empowers people you need to hear first hand from someone who has participated in the program.

LaTeesha is a graduate of Winston-Salem State and an Income Maintenance Caseworker in Family and Children’s Medicaid for Forsyth County. She has completed the financial literacy classes and will graduate from New Century IDA with Wave 29 on March 27^th. Like many people who participate in New Century IDA, LaTeesha is motivated by her son. By achieving her goal of homeownership, her son will be able to grow up in his own family’s home. He will also learn what his mother is capable of and what can be achieved with hard work and dedication to a goal.

To learn more about LaTeesha’s experience in New Century IDA, watch the video below!

Thanks to LaTeesha for sharing her story! Congratulations on all of your achievements so far!

IDA Success Stories: Rocio

We did it!!!!

My name is Rocio, I’m a single mother, and I have a 12 year old daughter named Alyssa. This is our success story:

I was tired of living in apartments, paying rent to people and never seeing any good results out of that scenario. My dream was always to own my own home, but to me it was “only a dream”.

I wanted my own home, but being a single mother and not making a lot of money, I never thought I could own one. I used to go out on weekends to see open houses, just dreaming, and in my mind thought, “I will never have anything like this…How...With what money...My credit is not that great…What can I do...Who could help me...” All those questions ran through my mind, but no answers.

In May 2004, I heard about Granite Mortgage. I went to see them and they told me about Ashley Powell. Mrs. Powell gave me all the information that I needed and she also gave me hope. Ashley gave me the name of realtor Phillip Rector. In the beginning I didn’t want to call Mr. Rector because I ad a lot of bad experiences with other realtors, but one day I finally called him, and I have never regretted it since. Mr. Rector told me about the IDA program, and sent me an application. I was immediately contacted by Mrs. Bianca Green, and she guided me every step of the way. The IDA program was one of the best things that happened to me and my child.

During this time I hit a few bumps, like car problems etc., but I always had the support of Mr. Rector and Mrs. Green, and the IDA program. Every question was answered and they always encouraged me to keep going. I wanted a home. And this year, on Friday January 13^th, 2006 I closed on my DREAM. I have a house; I still can’t believe it! I, Rocio, have a house with a 2 car garage and a yard my child to play in. This has been a great year! Not everything was easy and it took a long time and a lot of patience, but I finally did it.

So, please don’t give up! Because if I can do it, anybody can. I thank God everyday for giving me the courage to keep going.

May God bless each and every one of you.

Sincerely,

Rocio and Alyssa.

IDA Success Stories: A Single Mother of 2 and the Family Caretaker Reaches for the American Dream

I am a 42-year-old single African American with two sons, ages 15 and 24. My elderly father and his sister are also in the home. Currently, I am employed with the Forsyth County School System as a Teachers Assistant. I wasn’t familiar with any program in Winston-Salem area that would work with families that needed some assistance to help them become self-reliant.

I was at home when I received a phone call from one of my friends telling me about a program that she would like for me to participate in. However, she knew that financially I would be unable to do the program in its entirety. So, she asked that I come and hear her lecture because she knew it would benefit me somehow. By hearing her lecture it helped me set financial goals, budget planning, insurance and many other things. I was so glad to have received that call. The young man who met me at the door recognized my name and introduced himself and told me to please enjoy the lecture. At that point it was very clear to us that financially it would take a miracle to be able to participate in this program and purchase a home. But, thanks be to God the young man I met earlier was able to work out a way for me to participate. I was given sound advice from a team of workers through the IDA program.

Later, my IDA worker told me about the Self-Sufficiency Program at Experiment in Self-Reliance. I was approved for enrollment and needed additional assistance with budgeting skills, assistance in acquiring information on citizenship for my sons and father who are currently in the United States on Visas, and financial assistance to stabilize my household. This program would further enhance the ability to become a homeowner and self-reliant through a series of intense case management session during my monthly visits.

Things have come together for me. My family is receiving regular medical services. I have increased my annual income and learned some basic budgeting skills. Each month I continue to work with my case planner on developing those skills, and others that will help me become economically self-sufficient. I meet with my case planner once each month, and maintain telephone contact to ensure that no additional barriers arise that would hinder my progression to self-sufficiency.

I have finished the IDA Program by building a new home from scratch; and I may add I am the first one out of the group to have a home built. Even though some may believe that it just happened, I know that God had a plan and it was just unfolding.

I am thankful to God who is first in my life for making all of this possible for my family and myself. I am so grateful for the friends that God has placed in my life to be angels and they are not even aware of that. Please continue to make these programs available to others who aren’t able to do it alone.

Just imagine five persons living in a home and only one working. To purchase this home is nothing but a miracle for my family and me. That’s why the name of my home will be The Miracle House. ESR and IDA programs provide assistance to people who would otherwise not have the opportunity to better themselves and their situations.

If I had not been given the opportunity to be a part of the ESR/IDEA/Self Sufficiency programs, I would still be renting a house that would never be mine, struggling to manage my expenses each month, and I would probably be making the same amount of money I was earning before ESR, because I didn’t have a home to call my own, thereby making me feel more motivated to keep what I worked hard to accomplish. Also, my family would still be wondering when they would become citizens of the USA. My boys are just days away from becoming citizens and my father would have the same opportunity in a very short while.

Thanks to all of you for being there in my time of need.

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.

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.

Andriana's Guide to Road Trips



Written by:
Andriana Bicanin
AmeriCorps*VISTA 2010 - 2011



 This past weekend I attended an out-of-town Art Festival. I learned of this festival about a month ago, and thought about attending, but never solidified any plans. A day before the event was to take place I decided to buy a bus ticket and leave early the next day. I love spontaneous out-of-town trips, I love the arts, and I needed a getaway.

In the past four years I have lived in four different states, a combination of nine apartments, houses and dorms, had around 15 roommates, in five towns, three time zones, and each coast. If I needed to, I can pack all of my worldly possessions in a duffel bag, suitcase and backpack. Almost all of these moves were planned a month in advance, if that.

Jack Kerouac and the Beat writers are some of my favorite writers, not only for their writing, but because of the life they led, and the free spirited nature of their existences. They hopped freight trains or hitchhiked across the country. Kerouac believed in all things spontaneous, from prose to life. If he and his friends could do this, then why can’t I?

So, come game day I was completely unprepared, and about an hour into the days festivities I found myself limping, in need of new shoes, with a scowl on my face, and a few hours after that I had gone $40 over budget. I wasn’t the adventurer of days past.

I went over budget because I utilized my credit cards cash advance service. Never. Again. Yes, I needed to, my feet more than hurt, they were scarring, I was barely able to even limp, and I was anything but enjoying the gorgeous weather, wonderful music, and art. I did cash advance because the only store within walking distance that sold affordable shoes only accepted cash. I heavily weighed the pros and cons of cash advance:

Cons:

ATM fee of $3

Bank fee of $10 in addition to 4% of the amount withdrawn.

I will go over budget and struggle with my next two paychecks.

Pros:

MY FEET HURT AND I CANNOT WALK.

Pros won.

After buying the shoes, which were extremely comfortable, I was able to enjoy the rest of my trip. But nagging at the back of my mind was the $40 I had just spent, and how it negatively impacts the rest of this months budget, and maybe next.

I would not have had to do cash advance had I brought a little bit of cash/spending money, and I could have remained ‘spontaneous’ had I a savings account exclusively for such adventures. I also may not be able to attend another festival, one I am more excited about, this coming weekend.

A part of me is sad because I am ‘growing up’ and unable to partake in the adventures I used to, and that I weigh such things as money spent and how it will effect my future. I would love to lead a life of hopping freight trains, hitchhiking, meeting interesting people across this great nation and watching waves crash against the rocks of Big Sur, as there is a romantic notion and strong appeal regarding packing my bags and leaving earthly possessions behind, but I would rather have a budget, spending money, and a little bit of preparation to assure an enjoyable excursion, and feet that don’t hurt. That is adulthood. That is life. In retrospect, the majority of the Beat writers had addictions, and ultimately died rather tragically. I’ll pass on that. I’m ready for stability. I’m ready to “Put my big girl pants on.”

Andriana’s Guide to Road Trips:

• Greyhound or other bus services are great money savers. You don't have to pay for gas or parking, and someone else is doing all the driving. You can also meet some interesting people, and a great story may come of it (my facebook status updates this past winter, regarding a bus trip home, was the entertainment of several friends).
• $50 from each paycheck will now automatically transfer into my savings account. This is my road trip money.
• Have a set amount of money I am allowed to spend on a road-trips, and bring it with me in cash (taken from my road trip savings account). 
• If not comfortable with a large amount of cash, check to see if my bank has ATM machines in the area, and if there aren’t any, take the ATM fee out of the spending allowance.
• Bring a credit card in case of an emergency, but do not use it. Temptation in the form of a $7 burger or $50 painting (what a steal!) may arise, but that is what the spending money is for. 
• Pack some food to snack on. Part of the fun of trips is eating out, but I may overeat if very hungry. A bag of pretzels, peanuts, or an orange or an apple in my purse will keep me fed enough so that I don’t overspend at a restaurant or café.
• Bring a reusable water bottle.
• Wear comfortable shoes.
• Never use cash advance.

Saving for Repairs and Upkeep of Your New Home

Written by:

Barbara Johnson, IDA Program Director

Experiment in Self Reliance

In today’s economy how do we make repairs to our homes or even maintain and keep them up?  I’ll tell you by planning ahead and using a budget. Some may think of a budget as restrictive but a budget is really a wonderful and useful tool. For example what if you need to purchase a lawnmower before next spring and it is going to cost you $550 if you plan to purchase it in March you have 10 months to save for it @ $55 a month. When March comes around you already have the money to buy your mower. This is a painless way to acquire the things you need and those things you want also. We do not eat an apple in one bite why try to tackle big expenses that way. Wouldn’t it be better to take on expenses like we eat an apple one bite at a time?





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.