Article by Dona DeZube HouseLogic.com
Helping others become homeowners protects your home’s value and builds stronger communities.
When people move from renting to owning a home, they’re more likely to vote, get involved in community groups, and care about
their home’s appearance. The children of homeowners do 23% better in school, according to a 2001 study by Harvard’s Joint Center for Housing Studies. And a steady flow of first-time homebuyers makes it easier to sell your own starter home when you’re ready to move up to a larger property.
Make housing affordable
Making housing more affordable is one way to encourage more people to become homeowners. It is crucial because when they become homeowners and want to rent their home, they often have to opt for a complete home renovation or something as simple as hiring professionals for floor and Window Cleaning services to seal the deal. As a result, paying a large sum to buy a house and then working on it to rent it can be an expensive task for them.
Undoubtedly, all U.S. homeowners benefit from policies like the mortgage interest tax deduction. Many use government-backed mortgage insurance to lower loan costs. But if everything falls on them, they might look for other ways to earn money. A variety of public and private programs offer low-cost loans and downpayment assistance to help Americans become homeowners. Help prospective homeowners save a downpayment by donating to sites like EARN, a non-profit that uses donations to match funds saved by low-wage earners. There are also homeowners who will look at alternatives to government lending to help buy their homes by checking out real estate companies that provide a ‘We Buy Houses‘ service as well as utilize other financial help, for example, to find buyers that are as close as possible to the price-point of the home so they can sell it and pay towards their new home in a chunk.
Reduce foreclosures and preserve home value
Foreclosure matters because it hurts all homeowners. In 2009, foreclosures will cause property values to decline an average of $7,200 for about 70 million homeowners, resulting in a $502 billion loss in home equity, the Center for Responsible Lendingestimates. Each foreclosure within 1/8th of a mile of your home lowers your property value about 0.744 percent, CRL says.
“One of the sad lessons of the [recent past] is that we aren’t alone,” says Nicolas P. Retsinas, director of the JCHS. “It’s clear that if the family next door loses their home to foreclosure, my home’s value will go down. Therefore, I have a vested interest in ensuring that people become homeowners and that homeownership is sustained over time.”
One effective tool against foreclosure is educating homeowners before they buy. The Joint Center found that loan delinquencies fell 13% with homeownership counseling. People who go through pre-purchase and post-purchase counseling and learn about mortgages, family budgeting, and home maintenance are less apt to face foreclosure, says Michael Berti, senior homeownership specialist at the Rural Ulster Preservation Company in Kingston, N.Y.
Support groups that help homeowners
One way to do your part to help other homeowners is by donating your time or money to some of the many non-profits that promote responsible homeownership.
Habitat for Humanity partners with new homeowners to build affordable housing. Habitat homes aren’t free. Homeowners work hundreds of hours, get homeownership counseling, and make mortgage payments.
The United Way supports many local programs that build affordable housing, help families build financial assets, and teach financial management skills. If you donate to United Way, you can direct your contribution to those causes.
HomeownershipSF, in San Francisco, tries to intervene where people facing foreclosure have the resources to catch up on their loan. If “the home can’t be saved, we try to get a first-time homebuyer we’ve worked with into the home as quickly as possible to stabilize the neighborhood,” says Interim Director Christi Baker.
Homeowner associations undoubtedly benefit the property by bringing in more stability as a result of rules governing the maintenance and appearance of homes, as determined by the board of directors. When it comes to HOA elections, they take place when the time comes to elect the association’s board of directors per their governing documents. But one of the major conflicts arises because of the reelection of the same board members again and again. As a result, it is preferable to employ HOA election services by Pro-Ei or another HOA election company to assist the association throughout the election process.
Government programs support homeownership
Supporting federal state, and local programs that help create homeowners is another way you can expand responsible and affordable homeownership.
The U.S. Department of Veterans Affairs and the Federal Housing Authority provide mortgage loan insurance or guarantees that let people buy homes with only a small downpayment and borrow at lower interest rates.
Government-sponsored groups Fannie Mae, Freddie Mac, and government-run Ginnie Mae buy and securitize mortgage loans made by banks, freeing up money, so banks can keep lending.
HUD’s HOME program provides financial support to state and local housing authorities to build and renovate for-sale and rental housing for lower-income Americans.
In U.S. cities of all sizes, the HOPE VI program has funded plans to replace deteriorating public housing with new low-rise, mixed-income homes. These developments sell most homes at market rates, but designate a percentage for use by low-income homeowners.
How to get involved
You can support responsible homeownership in many ways. Retired construction contractors France and Bill Moriarity travel the country in their RV managing Habitat construction projects. “We like it because it’s a hand up, not a hand out,” France Moriarity says. Habitat volunteers don’t need construction skills and can sign up to work as little as one day at a time. Groups can volunteer together. Organizations like Rebuilding Togetherand NeighborWorks America sponsor once yearly volunteer events that help lower-income homeowners repair their homes.
In San Francisco, Gregg Lynn convinced 150 people from his professional network to donate a percentage of their income to EARN. Follow his lead by asking your professional network, trade association, or social group to contribute.
Dona DeZube has been writing about real estate for over two decades. She lives a suburban Baltimore 1970s rancher on a 3-acre lot shared with possums, raccoons, foxes, a herd of deer, and her blue-tick hound.