Promoting Homeownership: Local Educational Institutions Take Action

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As respected community stakeholders, repositories of knowledge about homeownership programs, and sources of design management strategies, institutions of higher education (IHEs) are in a unique position to create homeownership opportunities in their communities. The experiences and successes of IHEs fill the pages of Ideas That Work: Building Communities through Homeownership, a report recently published by HUD’s Office of University Partnerships (OUP). Ideas That Work describes many IHE activities that promote homeownership, such as applied research, community planning and revitalization, construction of affordable housing, homebuying education, and financial assistance.

Ideas That Work: Building Communities through Homeownership, a report recently published by HUD’s Office of University Partnerships (OUP).

Research and Technical Assistance

Many university researchers apply their knowledge and skills to supporting community-based homeownership programs. For example, at the Energy Center of the University of Texas at El Paso, researchers found that low-income households spend 14 percent of their income on heating, cooling, lighting, and appliance energy expenses, four times more than the average household. This research serves as the basis for an outreach program aimed at educating low-income homeowners on ways of making their homes more energy-efficient. The outreach program also tries to convince for-profit builders to use energy-efficient features and offers nonprofit housing developers a $500 subsidy for every house they build that meets recommended energy-efficiency standards. In addition to reducing energy dependence, this approach recognizes the role of reduced operating costs in promoting long-term affordability.

Creating a Desirable Living Environment

Some IHEs actively promote affordable homeownership in areas that may be unappealing to potential homebuyers. These areas frequently have multiple vacant lots, homes needing repair, poor schools, and few places to shop. These IHEs enhance their communities by building affordable housing, marketing neighborhoods to prospective buyers, and creating viable revitalization strategies.

The University of Tennessee at Chattanooga has developed community partnerships that have changed traffic patterns, rehabilitated homes, and built a new school, parks, and university housing in the Martin Luther King neighborhood of Chattanooga. Johnson C. Smith University in Charlotte, North Carolina and LeMoyne-Owen College in Memphis, Tennessee each started community development corporations (CDCs) in the 1990s. Through their CDCs, the schools provide opportunities for affordable homeownership in deteriorating neighborhoods where rental units prevail. The Le Moyne-Owen College CDC maintains a revolving loan fund and offers technical assistance from its School of Business to revive the small-business economic base in these neighborhoods. The CDC is responsible for bringing the first full-service bank to one such neighborhood. In Dayton, Ohio, Wright State University is creating a rent-to-own program designed to help stabilize neighborhoods by rehabilitating older single-family homes.

Preparing Future Homeowners

To assist first-time homebuyers in overcoming obstacles such as poor credit or unfamiliarity with mortgages, some colleges and universities have taken steps to educate prospective homeowners. The University of Texas-Pan American in Edinburg offers money management classes for those who would benefit from a basic understanding of budgeting, banking, and credit systems. Indiana University-Purdue University Indianapolis grants $150 in cash and coupons to potential homebuyers who attend financial literacy classes. Ohio’s Youngstown State University created personalized homeowner education classes; its partners provide guidance from counselors throughout the loan and home purchasing process.

Providing a Financial Boost

IHEs sometimes provide financial assistance to low- and moderate-income families. The Women’s Center at San Antonio College in Texas partnered with the city to create individual development accounts (IDAs). Individual savers participate in these IDAs and work with the bank to develop a personalized educational, homeownership, or business goal. The city then offers a 4-to-1 match on deposits up to $1,000. In California, Long Beach City College provides technical and financial assistance to family childcare workers who want to purchase homes and create home-based businesses.

Other IHEs offer help with downpayments and closing costs. Whereas the University of Chicago gives homebuying assistance to full-time employees, Elizabeth City State University in North Carolina gives this aid to households purchasing homes with guidance provided by its Community Development Program.

Hands-On Experience

IHEs often promote affordable homeownership by giving students hands-on learning opportunities that offer long-term benefits to students, local neighborhoods, and potential homeowners alike. In response to the construction industry’s need for qualified labor, students in the residential construction program at California’s Bakersfield College receive skill training on homes they build, and the college sells at affordable prices, in revitalizing neighborhoods. At Valparaiso University in Indiana, student and faculty volunteers build houses that are sold to low- and moderate-income families at cost.

In a novel approach, Los Angeles Trade-Technical College established a mortgage finance program that promotes minority employment in the mortgage finance industry. As a result, the college hopes to increase the number of mainstream lenders serving the minority and low-income markets, as well as to help students understand the significance of homeownership as a means of stabilizing neighborhoods.

For additional examples and information about how IHEs expand and encourage homeownership, see Ideas That Work at www.oup.org/files/pubs/ideasthatwork.pdf, which can be downloaded at no cost. The report is also available in print, free of charge, from the OUP Clearinghouse by calling 800.245.2691 and selecting option 3 or by sending a request to oup@oup.org.

Updated Data Sets

New Research Tools

A Picture of Subsidized Households — Describes 4.9 million households living in HUD- assisted housing in 2000. The data are summarized at the census tract, project, public housing agency, state, MSA, city, and national levels. www.huduser.org/picture2000/index.html GSE Mortgage Data — 2005 census tract and national details about income, race and gender of borrowers, LTV ratios, loan seasoning, purchase/refinancing, and affordability. Also added is data on single-family and multifamily mortages purchased by government sponsored enterprises. www.huduser.org/datasets/gse.html HUD's Subprime & Manufactured Home Lender List — The 2005 list of lenders who specialize in subprime loans can be downloaded as an Excel file from www.huduser.org/datasets/manu.html

The Map Gallery — The public is welcome to download maps from the gallery and incorporate them into their own research projects. Presently, maps focus on damage done by Gulf Coast storms where subprime lending is most prevalent, and on areas where FHA and subprime lending patterns converge. Visit this new feature regularly, as it will be updated on an ongoing basis. www.huduser.org/maps/ Aggregated Data on USPS Vacancies — The United States Postal Service now provides HUD with aggregate data on addresses identified as having been vacant or inactive during the previous quarter. This tool permits neighborhood change to be tracked on a quarterly basis. www.huduser.org/datasets/usps.html