Models & Resources Supporting Native Homeownership, Homebuyer Education Overview November 18, 2013

Presentation Overview Coalition survey results regarding homebuyer education Types of homebuyer education Resources for homebuyer education 2

COALITION SURVEY RESULTS 3

Survey Methodology Online survey sent in June 2013 to 73 stakeholders including: Tribal leaders, Tribally designated housing entities, State and federal representatives, Lenders and Native CDFIs, Nonprofits, and others 42% response rate 4

Obstacles to homeownership in Native communities 5 1.Homebuyer readiness of clients (70%) 2.Infrastructure delays (66.7%) 3.Lack of local lenders (60%) 3.Lack of housing inventory (60%) 4.Hard to get construction financing (46.7) 5.Hard to access land (43.3%)

Top three obstacles to homebuyer readiness Bad credit – 83%Lack of credit history – 57%Lack of info about process – 47% 6

Top things Native homebuyers want to know more about Home buying process – 89%How to repair credit – 78% How to obtain and understand credit report – 47% 7

How tribes can support homeownership Make homebuyer education mandatory for housing benefits – 50% Offer homebuyer ed/credit counseling an employee benefit – 48% 8

TYPES OF HOMEBUYER EDUCATION 9

Discussion Question What types of homebuyer education do you provide? 10

Homebuyer Education Classes Pros Provides overview of home buying process Helps client understand affordability Improves clients ability to maintain a home Provides guidance on how to manage a mortgage Cons Difficult to get families to attend Need instructors who understand home buying process 11

One-on-one Homebuyer Counseling Pros Provides clients help with each of their individual situations Helps client to navigate through the home buying process Keeps client engaged in the process Cons Not as cost effective as group classes Takes more staff time to deliver 12

Credit Counseling Pros Helps clients to manage their credit more effectively Provides client with a plan to improve credit score Helps clients get out of financial troubles Improves loan product options and terms Cons Some clients may not feel comfortable discussing financial their financial situation with counselors Takes a long time Must be delivered by trained personnel 13

Financial/Credit Coaching Pros Helps clients reach self- directed goals Customized to each client Client-paced Provides accountability Addresses behavioral economics Cons Expensive to administer Clients may not understand what coaching is Takes strong commitment from clients 14

Basic Financial Education Pros Helps clients learn basic banking skills Provides foundational knowledge Explains the basics of managing credit Cons Difficult to get clients attention until they are in trouble Must have trained personnel 15

Individual Development Accounts Pros Establishes savings habits Helps clients prepare for homeownership Matched savings for mortgage downpayment Cons Expensive program to administer Difficult to find flexible match funds and operating funds 16

HOMEBUYER EDUCATION RESOURCES 17

HUD Funding Sources ONAP Programs NAHASDA Indian Housing Block Grant (IHBG) Administered by Tribe or TDHE Indian Community Development Block Grant (ICDBG) Competitive by ONAP region Big HUD Programs Resident Opportunity Self Sufficiency (ROSS) grants Comprehensive Housing Counseling Grant Must be HUD Approved Housing Counseling Agency Neighborhood Stabilization Program 18

Rural Development Funding Sources 502 Loan Packaging Provides staff training Rural Community Development Initiative (RCDI) Matches funding of an intermediary to provide homebuyer education 19

SDHDA Administered Sources HOME – for homeownership development subsidies Homeownership Education Resource Organization (HERO) Serves as an intermediary in the state for: HUD Housing Counseling National Foreclosure Mitigation First-time Homebuyer Program Down payment assistance 20

Ways to Build Staff Capacity NeighborWorks America Training scholarships through NeighborWorks affiliates National American Indian Housing Council Training for NAIHC members and their partners Native Community Development Financial Institutions (CDFIs) Can contract or partner with them to deliver homebuyer education SDHDA Homeownership Education Resource Organizations 21

Native Curricula Building Native Communities: Financial Skills for Families financial education curriculum. Contact Oweesta at (303) or Pathways Home: A Native Homeownership Guide. Contact National American Indian Housing Council at or Covers: The mortgage loan process How to prepare a family budget How to improve credit profiles How to avoid the pitfalls of predatory lending How to maintain a home and finances after purchase 22

Individual Development Accounts US Department of Health and Human Services (HHS) Office of Community Service (OCS) Assets for Independence (AFI) funds IDA matches HHS Administration for Native Americans (ANA) Social and Economic Development Strategies (SEDS) Joint OCS/ANA Native Asset Building Initiative (NABI) 23

Questions or comments? 24