NeighborWorks® - Newsroom - Press Release

NeighborWorks
FOR IMMEDIATE RELEASE
August 11, 2004

Contact: Stacy Garrett or Cathy St. Denis, 202-667-0901

NeighborWorks to Launch Center on
Homeownership Education and Counseling
New Initiative to Focus on Helping New Buyers Succeed

Washington, D.C. — Responding to the lack of access to quality homeownership education and counseling as one of the foremost barriers for low- and moderate-income families to achieve homeownership, the national NeighborWorks network today launched a new national initiative designed to dramatically increase the number of potential homeowners who could benefit from these critical services. View Fact Sheet [PDF, 103KB].

Studies show that credit and pre-purchase homeownership education and counseling can lower delinquency rates by up to 34%, but only an estimated 15% of first-time homebuyers receive quality training in advance. In addition, the absence of national standards and the uneven quality of education and counseling across the country has prompted NeighborWorks to develop a long-range approach.

The NeighborWorks Center for Homeownership Education and Counseling (NCHEC) is a new initiative under the NeighborWorks Training Institute, the nonprofit Neighborhood Reinvestment Corporation's comprehensive training effort. NCHEC's mission is to:

Work with industry partners to establish and promote national quality standards; and
Provide expanded training and certification opportunities as well as information and other tools to counselors across the country.

NCHEC is designed to train and certify more than 2,000 counselors per year by 2006 (up from the 700 trained by the Institute this year), which translates to providing education and counseling services to more than 2 million households by 2007. This would represent an almost 10-fold increase from the 291,000 people reached in 2003.

"High-quality, systematic education and counseling is a critical element in successful, long-term homeownership," said Federal Reserve Governor Edward M. Gramlich, chairman of Neighborhood Reinvestment's Board. "By training counselors and educators to a high standard, the NeighborWorks® Center for Homeownership Education and Counseling will provide a strong foundation of support for families who are buying and maintaining a home."

"Without experience or training in buying and keeping a home, people can easily pay too much or make poor choices that eventually will jeopardize their financial health," said Kenneth Wade, CEO of the Neighborhood Reinvestment Corporation. "This new Center will help many more moderate and low-income families not just buy a home but succeed as homeowners in the long run."

Homeownership rates in the United States have increased over the past 10 years, including among all minorities, although these groups still lag behind. According to Census figures for the second quarter of 2004, the overall homeownership rate is 69.2%, up from 64% in 1994. While the rate among whites was 76.2% in 2003 (70% in 1994), it was 49.7% for blacks (42.7% in 1994), 47.4% for Hispanics (41.5% in 1994), and 58.7% for Asians and others (51.4% in 1994).

Homeownership has proven to be beneficial to families, communities, and the economy in a number of ways. In addition to improving neighborhoods and building community stability, studies show that homeownership builds wealth. The median net worth of a lower-income homeowner is more than 13 times that of a similar renter, and 69% of the total net worth of these homeowners comes from home equity, according to a 2000 report from the Joint Center for Housing Studies. From 2003-2007, the NeighborWorks® Campaign for Home Ownership, which operates in 150 locales, expects to support at least $2.2 billion in home-equity wealth development.

The national NeighborWorks network is an affiliation of more than 220 local nonprofit organizations aimed at increasing homeownership, producing affordable housing and revitalizing neighborhoods in more than 2,500 communities across the nation. In 2003, the NeighborWorks network generated nearly $2 billion in total direct investment and helped more than 80,000 low- to moderate-income families purchase, improve and maintain their homes. The NeighborWorks network was founded and is supported by Neighborhood Reinvestment Corporation, chartered by Congress in 1978. The Corporation strengthens the network through training, technical assistance and funding.