NeighborWorks resources for HomeOwnership Centers

HomeOwnership Centers Provide Creative Solutions

The Value Added by HomeOwnership Centers

Economic Benefits

HomeOwnership Centers Provide Creative Solutions
NeighborWorks HomeOwnership Centers address three problems that can hamper community-development efforts, especially when groups move beyond a single, local market area:

Opportunities to own a home vary enormously across cities, counties, and regions;
Low- and moderate-income home-owners are vulnerable to circumstances that can result in delinquency and default, and require ongoing support;
Large-scale replication of a successful model is usually prohibitively costly.
The NeighborWorks HomeOwnership Center model provides a basic operating framework, and there are common elements including marketing and the range of products and services provided. Within that, however, there are opportunities for individual centers to customize their product and service offerings based on local market needs. The core homebuyer education, home inspection, home-improvement lending, and postpurchase services are designed to “delinquency-proof” borrowers who, due to lower incomes, savings or other characteristics may be at higher risk for delinquency or default.

Services and Products of NeighborWorks HomeOwnership Centers
Homebuyer education, ranging from introductory group orientations to intensive, individualized counseling, usually in the customers’ first language;
Home inspections and cost estimates;
Affordable first and second mortgages;
Property insurance counseling;
Contractor referrals and construction monitoring;
Home-maintenance workshops;
Training classes for resident leaders and neighborhood groups;
Delinquency-prevention counseling; and
Landlord training.

The Value Added by HomeOwnership Centers
The most innovative feature of NeighborWorks HomeOwnership Centers is their market-based strategy of delivering comprehensive, high-quality home-ownership services at declining per-unit costs. Neighborhood Reinvestment has tested an idea proposed by community-based organizations, developed a national model and then aggressively replicated the model in a cost-saving response to overwhelming demand from local communities. Replication of this successful model requires the combined efforts of a strong community-based organization, supportive lenders, and participating real estate, insurance and local government partners.

The implementation of uniform standards, reduction of duplicative efforts, and peer-to-peer sharing of winning strategies produces economies of scale and speeds up the dissemination of knowledge and lessons learned through the entire network of NeighborWorks HomeOwnership Centers. This innovative approach keeps buying a home as simple as possible, and makes it easier to reach out to customers with special financial, cultural or language needs. Each new buyer receives the training needed to support long-term success as a homeowner. In addition, the training connects home ownership with community involvement, and trains homebuyers in community leadership strategies.

Standards and Technical Assistance
NeighborWorks HomeOwnership Center Standards
Neighborhood Reinvestment and the NeighborWorks network established a short set of outcome-oriented standards for HomeOwnership Centers to ensure that services were consistent in quality and scope across the nation. Organizations that are selected and funded to develop a NeighborWorks HomeOwnership Center are required to meet or exceed the established standards in the following categories:

Leadership
Full-Cycle LendingSM certification
Customer service
Customer-tracking systems
Cost recovery and partners
Marketing materials
Staffing
Home-ownership production
Service-delivery systems
Financial-management systems
Location and design
Monitoring and evaluation

Technical Assistance Received
To achieve the above standards, each NeighborWorks HomeOwnership Center receives considerable financial and technical assistance, as well as marketing and promotional support. Selected organizations are eligible to receive assistance in the following categories:

Start-up funding
Location and design technical assistance
Marketing
Peer support
Predevelopment funding
Feasibility and market analysis
Partnership development
Training opportunities for staff
Research and evaluation
Internal systems

Business Planning Guide
The NeighborWorks Campaign for Home Ownership developed a business-planning guide to assist prospective NeighborWorks HomeOwnership Centers in the business planning process. The guide outlines the methodology, structure, and content of a typical business plan.

VIEW [PDF, 1.31 MB]

Start-Up Guide
The Start-Up Guide provides the general concept of the NeighborWorks HomeOwnership Center model. It includes the types of services they offer; how the services are funded; examples of how centers may be structured; and how to establish a center.

VIEW [PDF, 1.00 MB]

Affecting People’s Lives
More than 60,000 families have been helped to realize the American dream of home ownership by the NeighborWorks Campaign for Home Ownership. Most were low-income, and more than half were minorities; virtually all were first-time homebuyers. NeighborWorks HomeOwnership Centers have played a growing role in the process, as illustrated below.

In Hamilton, Ohio, a NeighborWorks HomeOwnership Center enabled an elderly couple, faced with displacement, to purchase and improve their home. Ken and Ethel Shepard raised a family over 22 years in their rented home at 1127 Elm Street. But when their absentee landlord fell ill and needed to sell, the Shepards knew their low income and medical needs put home ownership virtually out of reach.

Then the Shepards happened to see a TV ad for homebuyer services from Hamilton’s NeighborWorks HomeOwnership Center. They made an appointment with one of the center’s trained housing counselors. The counselor helped the Shepards develop a plan for purchasing the house that took into account their $709 monthly income and Ethel Shepard’s emphysema-related, medical-oxygen service.

The selling price was $12,000. The house had become severely distressed over time. The Shepards managed to accumulate $250 toward a down payment, and the counselor constructed a $13,500 purchase-and-rehabilitation first mortgage with a local lender-partner, Home Federal Bank, FSB, for 20 years at a fixed, 7.5-percent rate. Because of Ethel Shepard’s medical condition, the city provided a $6,000 emergency-repair grant for a new heating and air system.

The NeighborWorks HomeOwnership Center used its revolving loan fund for a $2,300 second mortgage at zero percent that leveraged the first mortgage and covered the balance of the Shepards’ down payment and closing costs.

As a result of the package, the Shepards’ monthly housing payments totaled $156. This compared to the $135 a month they had been paying in rent—for a far more distressed house.

The NeighborWorks HomeOwnership Center tracked the Shepards’ postpurchase payment record. They have neither missed nor even been late on a single payment for either loan!

Economic Benefits of NeighborWorks HomeOwnership Centers
For an example, of the economic benefit, see this sample HomeOwnership Center Profile. VIEW [PDF, 251 KB]

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