FOR IMMEDIATE RELEASE  May 24, 2005	Contact: Michele Anapol (202) 466-2121 x226 manapol@nhc.org

NEW REPORT FOCUSES ON STRENGTHENING HOMEOWNERSHIP OPPORTUNITIES FOR VERY LOW-INCOME FAMILES BY PROVIDING ROADMAP FOR GRANT MAKING

Key Recommendations Developed for Foundations and Other Funders Would Help Expand
Homeownership Opportunities for Very Low-Income Families and Strengthen Low-Income Communities

Washington, DC – Helping very low-income families to attain homeownership assists them in building assets and wealth, and helps strengthen low-income communities, according to a new report from the National Housing Conference (NHC) that provides a detailed roadmap for foundations and other funders interested in making a unique and important contribution in today’s crowded homeownership field.  While not without risk, homeownership is a legitimate and important goal for very low-income families, provided that policies are put in place to expand access to homeownership education and maximize homeownership retention.  Sponsored by the Annie E. Casey Foundation, this detailed report entitled "Strengthening the Ladder for Sustainable Homeownership" provides information, analyses and recommendations to inform the grant making process in the area of very low- and low-income homeownership. 

The report acknowledges that homeownership can pose a financial risk for low-income families and that there is a danger in neglecting affordable rental housing, which will always remain the cornerstone of housing policy for very low-income families.

At the same time, however, the report notes the strong desire of many low-income families for homeownership – a desire that often leads families to agree to mortgages that are disadvantageous or even predatory. By dramatically expanding the availability of homebuyer education and counseling, putting policies into place to help low-income homeowners avoid default and foreclosure, and creating responsible routes for very low-income families to make progress toward and ultimately achieve sustainable homeownership, the risks can be controlled and the asset-building potential and other positive benefits of homeownership maximized.

“This significant report powerfully demonstrates and points to how very low-income families should be encouraged to build assets and wealth through sustainable homeownership – just as higher income families have done so,” said NHC President and CEO Conrad Egan.

The report uses the term very low-income families to refer to the group of households with incomes just below those currently the focus of most affordable homeownership programs. Depending on the community, this may be families with incomes between 30 and 60 percent of the area median income (AMI) or between $17,500 and $35,000 per year on a national basis in 2004.  Low-income families are those families with incomes between 60 and 80 percent of AMI or approximately $35,000 to $45,000 in 2004.

The following are the key recommendations from the report on how foundations and other funders can help strengthen the homeownership opportunities for very low-income families:

• Developing stronger policies designed to help very low-income families move up the ladder to sustainable homeownership.  Today there is a lot of focus on how to make homeownership incrementally more affordable for those that are closest to being able to achieve it.  More attention needs to be paid to the hard work of helping those further down the income spectrum make progress toward homeownership, even if the ultimate achievement of homeownership is still a few years away.  

• Working to dramatically expand the availability of homeownership education and counseling and strengthening homeownership retention policies. In addition to helping very low-income families purchase a home, these two important policies can help reduce the potential danger and pitfalls involved in homeownership for these families.

• Strengthening, and making more widely available, the existing tools necessary to help foster homeownership among very low-income families.  Innovative strategies are currently available to help very low-income families move up the ladder to sustainable homeownership, including Section 8 homeownership, the Family Self-Sufficiency Program and alternative tenure policies, such as Community Land Trusts, Limited Equity Coops, and Shared Equity Mortgages. However, these tools need to be made much more widely available in order to assist additional families. Increased policy development is also needed to maximize the effectiveness of these tools.

• Directing more independent analysis and advocacy toward strengthening the ladder to sustainable homeownership for very low-income families.  There is a need for more independent analysis and public policy advocacy directed at determining whether the public and private sectors should be doing more to support homeownership education and counseling and other policies that can help very low-income families make progress toward homeownership, and, if so, what specifically should be done.

• Providing local governments with stronger “best practices” materials and strategic analyses to help them be more effective in using HOME and Community Development Block Grant (CDBG) funds.  These U.S. Department of Housing and Urban Development programs help strengthen homeownership opportunities and retention among very low-income families. However, there is a lack of solidly researched and persuasively argued materials to help local governments develop more effective low-income homeownership programs.

• Developing new tools for helping educate community-based organizations on promising strategies for strengthening homeownership opportunities and retention among very low-income families.  Education includes helping support the implementation of these homeownership strategies in specific communities. Work in this area would not only increase foundations’ contributions to these communities, but would also enable the communities to serve as testing grounds for strategies that could then be used more broadly nationwide.

• Ensuring that advocates and practitioners in different fields meet to discuss how best to work together to maximize the ability of very low-income families to access and retain homeownership.

• Advancing long-range thinking to help address specific programs and develop stronger homeownership policies. Examples include strategic thinking on how to set up a national fund to make low-interest loans to low-income borrowers in danger of default and foreclosure, and how to promote greater acceptance of alternative housing types that cost less to construct.

To review the new report, please go to NHC Publications.

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