Retaining Residents

The initiative retaining residents relates to MAP’s Initiative 7: Community Principles. MAP’s seventh initiative community principle is attempting to create a broad range of housing types, prices levels, and ownership options within neighborhoods. Converting neighborhood residents who currently live in rental units into home owners will increase the diversity of ownership within the neighborhood. Thomas Park/Avondale has a high number of resident rentals, and many homeowners would like to see those residents become homeowners within the neighborhood.

How

The retaining residents initiative was created from results of the neighborhood survey. A number of survey responses mentioned about the high number of rental houses within the neighborhood. One way of keeping renters in the neighborhood is converting them into home owners.

Why

Thomas Park/Avondale has a large number of rental properties within its border. Many residents would like to see these renters invested further into Thomas Park/Avondale for multiple reasons including increased home maintenance, and safety. Having more owner occupied homes will also help in decreasing the number of vacancies in the neighborhood. Vacant homes bring forth many concerns including safety hazards, accumulating trash, lack of maintenance, and decreasing the value of surrounding homes.

What

There are a couple of methods for converting neighborhood renters into homeowners. The first method is offering educational classes aimed at teaching future home buyers all of the ins and outs of buying a home. These classes educate on a variety of topics including [1]:

  • Finance
  • Budgeting
  • Home improvement and rehabilitation
  • Pre-purchase knowledge
  • Predator lending
  • Mortgage delinquency and default resolution

Giving potential home buyers this knowledge can help them keep and maintain their mortgage, and keep them in their home. Many home buyer education classes and workshops are available. The US Department of Housing and Urban Development (HUD) offers a list of approved counselors offering these classes on their website. Framework is the official online home buyer course of the Indiana Housing & Community Development Authority IHCDA. PathStone is HUD approved counseling agencies within Munchies, IN.

The second method for converting neighborhood renters into homeowners is offering financial assistance. Providing future home buyers with down payment and loan assistance will help entice even more people into buying homes. The Indiana Housing & Community Development Authority (IHCDA) offers many mortgage assistance products to help assist home buyers in getting a low rate mortgage. One of IHCDA’s most helpful mortgage products to current Thomas Park/Avondale renters is the My Home Conventional. Qualified home buyers using My Home Conventional are able to get a low fixed interest rate loan. These mortgages are offered by 18 IHCDA approved lenders. Potential home buyers must meet these criteria to qualify [2]:

  • Be income-eligible
  • Get approved for desired loan
  • Purchase a single-family home
  • Complete IHCDA University courses (first time home buyers only)

IHCDA approved lenders can be found here

Finally, some residents may not want to say in the neighborhood due to a lack of amenities. Providing additional amenities may help create a desire to stay in the neighborhood. Example amenities, which could be offered, include walkable sidewalks, and more parks.

Retaining Residents 1.2.jpg

Figure 1 – Hand sketch of sold home Artist: Ryan Robling

Source [1]

Source [2]

Who

Thomas Park/Avondale residents who are currently renting will be responsible for seeking out and receiving the home buyer assistance. Other Thomas Park/Avondale residents who may know of renters that are looking at potentially buying a home in the neighborhood can direct them to the proper resources. There are currently no deadlines for any home buyer assistance resources.

Where

All of Thomas Park/Avondale has rental properties. This means that every block within Thomas Park/Avondale applies to this initiative. The map labeled Resident Retention shows where the owner occupied and rental units are located within the neighborhood.

renter2.jpg

Figure 2 – Location Map Showing Owner and Renter Occupied Housing

 

Case Studies

Tennessee Housing Development Agency

Tennessee Housing Development Agency (THDA) offers home buyer education for two of their loan programs Great State, and Great Rate. In 2002 THDA, using HUD funding, began offering a standardized curriculum and format for both programs. Between 2005 and 2006 337 Great Rate home buyers took a voluntary education class, while 3,379 home buyers did not take the class [3]. Great Rate home buyers who took the voluntary class saw a 50 percent reduction in the odds of foreclosure compared to those who did not take the class. In 2002 the Great Start program had 252 home buyers take the voluntary education class, while 478 did not take the class [3]. There was a 97 percent reduction in the odds of foreclosure compared to those who did not take the class [3]. Tennessee found that offering voluntary and mandatory home buyer education initiatives reduced the number of foreclosures even during the beginning of the mortgage crisis in the State.

Source [3]

Nevada Housing Division

In 2014 the Nevada Housing Division (NHD) developed the Home is Possible down payment assistance program. Nevada’s Home is possible program helps those who can afford mortgages but whose saving were short of the amount required by the lender. Nevada felt that many potential home buyers were being limited by their lack of savings. The program started by focusing on home buyers in Washoe and Clark Counties. The grant gave 4 percent of the total loan amount to the home buyer to use as a down payment [4]. NHD created requirements for home buyers to obtain the Home is possible grant. The home buyer must have a minimum credit score of 640 for government insured loans, 660 for manufactured homes and 680 for most conventional loans [5]. Home buyers must have an income below $95,000 and the home price must be below $400,000 [4]. Finally a home buyer education class was required. NHD used federally available HUD funds in order to fund the grant program.

Source [4]

Source [5]

Resources

Indiana Housing & Community Development Authority (IHCDA) has created a list of mortgage lending who participate in IHCDA programs (The list can be found here). following that site will give a list of available lenders in Delaware County. In order to obtain a My Home Conventional mortgage home buyers must qualify meeting these criteria to qualify:

  • Be income-eligible
  • Get approved for desired loan
  • Purchase a single-family home
  • Complete IHCDA University courses (first time home buyers only)

Only conventional loans apply. The home buyer must have their own 3% down payment capability. Qualifying home buyers must contact a participating mortgage lender.

Contact Information

Indiana Housing & Community Development Authority
30 South Meridian Street
Indianapolis IN, 46204
Phone:   (317) 232-777
Email:     askihcda.in.gov
http://www.in.gov/ihcda/

Additional Websites of Interest

http://www.pathstone.org/

http://www.in.gov/ihcda/files/IHCDA-006-HomeownershipBrochure-012114.pdf