Published on Sep 20, 2012
While most people aspire to owning their own home, many aren't able to do so due to financial reasons. Often it isn't getting a loan that is holding them back but rather, not being able to put down a deposit on the home. In Nebraska, the Northeast Housing Initiative (NEHI) is helping people get onto the property ladder.
Robert Bock, the founder of NEHI, explains that the nonprofit it a "a purchase-rehab-resell program which helps first-time homebuyers get into affordable, decent, safe housing." By buying houses, renovating them, and then selling them to the potential homeowners, they help make the process a lot smoother.
NEHI operates across six counties in Northeastern Nebraska, in which no town has a population larger than 2,000 people. NEHI's Executive Director, Linda Kastning explains that, "In the 12 years that we've been in operation, we've done over 200 purchase-rehab-resell homes."
For an applicant coming to NEHI, "the first thing they need to do is find a house, find a loan, take a home buyer education workshop," explains Kastning.
After all the paperwork is complete, NEHI inspects the house chosen by the applicant. They then assess how much work needs to be done, and the cost of doing so. If they deem the house in good enough condition, they will buy it and begin rehabbing it "to meet minimum standards".
When it comes to reselling the house to the prospective owner, once the applicant has found a loan for 80% of the cost of the house, NEHI puts forward the remaining 20%, used as a deposit, as a zero interest loan.
"That loan is ... deferred until they pay off the first loan or sell their house, and at that time it is due in full," explains Kastning. This is not a forgivable loan but the lack of interest on that loan takes a lot of pressure away from the homeowner.
NEHI's 20% interest-free loan simply allows a homeowner get on the housing ladder even if they don't have the on-hand cash necessary to put down a deposit. In many cases, people are able to keep up with their mortgage payments each month but it is that first deposit that holds them back.
Having gone through the home-buyer education course at the beginning of the process, the new homeowners are better equipped for owning that house and making sure they keep on top of their monthly bills and payments.
Home ownership is very important to a community and can help ensure that jobs and schools remain as part of a community. "It helps them establish a routine and some stability, and they know they don't have to move and their children go to the same school district, they don't get moved around from school to school," explains Bock.
Danielle Hill, Executive Director of the Nebraska Housing Developers Association says that, "housing builds strong communities, and strong communities build housing." Owning a house brings a certain amount of responsibility and pride that can help people grow in their self-esteem.
There can often be a certain amount of stigma associated with people who buy or live in affordable housing, however. Misconceptions about people not working or receiving handouts often prevent them from getting the help they need.
But these people work hard to earn a living, and they have to do so to be a part of NEHI because far from being a handout, they must still make payments on their mortgage. Kastning explains that, "our clients are what we commonly call the working poor ... they're doing blue collar jobs, being paid by the hour, and often at low wages."
The misconceptions don't end there: "many times, they're young families," says Kastning. "For the most part, the conception is sometimes that it's mostly single parents and actually, our numbers show that it's mostly two parent families."
NEHI works very well within the community and tries to remain as inconspicuous as possible. As they work with government grants, they not only have to work around piles of paperwork, they also have to fight the negative stigma surrounding getting help from the government.
Kastning explains that she would love to advertise but "in small towns and in rural areas, people are very independent and hard-working, and there is a pride in doing things for yourself... We sneak in and sneak out of these small towns and get someone into a house and get the house fixed up without a lot of publicity."
"What [people] don't realize is that it's a loan. They're paying everything back, we're giving them nothing except a chance."
The bureaucracy and misconceptions can often be draining but for Kastning, it is helping NEHI's clients that makes it all worth it. She says that, "when I go to a closing and a 50-year old man has tears in his eyes because he's finally getting into a house of his own, I'm ready to do the next project."
Standard YouTube License