Home Buyer Education and Manufactured Housing Progress with Julie Egressy. Mercy Housing and Human Development. Gulfport, Mississippi

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Roy Gabriel Townsend
5 years ago
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2 Home Buyer Education and Manufactured Housing Progress with Julie Egressy Mercy Housing and Human Development Gulfport, Mississippi

3 HUD Agency (Not affiliated with any MH Park or ROC) So when I come to the I M Home Conference I fit in with about maybe 5% of the attendees that come. Being a HUD Agent prohibits us from steering clients in any sort of direction for home choice. Our clients typically are opting for a stick-built house.

4 HBE Presentations Affordable Housing Awareness Manufactured Housing sure looks like Stick built!

5 Unfortunately, this is still their view of Manufactured Housing!

6 Why do our Clients come to HBE? I would love to say the education is at the center it is actually the great by-product! GRANTS Down Payment Assistance in the area. CDBG HOME Funds up to $30K Neighborworks Project Re-invest $10,500 Lender matching AVERAGE HOME COSTS - $125,000

7 What s Available for Manufactured Housing? If the MH is strapped down, they can apply for the CDBG Grant (limited). However, it is very difficult to get this thru City Code. Disability Grants up to $40,000 is available. More lenders giving competitive rates.

8 Barriers to getting MH Clients to HBE Client Awareness HBE Presentations Vendors do not come! Manufactured Home Center Practices Have their own in-house education Lending practices Paying off Credit Card or Car Loans to lower DTI Rolling car note and credit card debt into loans Using owner Land as security Referrals You cannot tell me that everyone that walks into a MH Site is credit ready! Instead of saying NO, give a referral to our agency! DEFAULT COUNSELING Unlike the typical Mortgage Foreclosure process where HUD provides Counseling there is little recourse when a MH Owner defaults.

9 What is our MH Client Rate to Date?

10 Removing the Stigma Next Steps Partner I M Home (Prosperity Now)Partner Working with City Planning Community Awareness Changing the view of Manufactured Housing

11 Beautiful Water Views

12 Fits right in

13 Manufactured Buildings Shops on the Ave

14 Mercy Housing Cottage Project low/moderate income

15 Meeting People Where They Are: Integrating Financial Capability Services with Manufactured Home Living October 3, 2017 Brenda Hayden Assistant Director of Homeownership

16 RIHousing Who we are. What we do. Since 1973, RIHousing has helped nearly 65,000 families purchase their first home Help open the door to homeownership with a range of options Help consumers make informed decisions

17 RIHousing RIHousing Overview State s Housing Finance Agency 100% financing Local servicing in Providence 38+ local Participating Lenders and RIHousing Loan Center Exclusive access to innovative products

18 2016 Homebuying Statistics

19 Homebuyer Education Need: Prospective homebuyers may not understand their financing options Homeowners can encounter unexpected costs Education helps homebuyers: Navigate complexities of housing market Make good home purchase and mortgage decisions Improve financial management skills Achieve sustainable homeownership

20 Homebuyer Education Outcomes: Improve mortgage literacy Improved underwriting qualifications Improved budgeting practices Improved communication with lenders (post-purchase)

21 Homebuyer Education RI Housing Homebuyer Education Important first step in the process Includes overview on credit, debt, preparing for homeownership In 2016: provided Homebuyer Education to 3,373 individuals In-person and online (via ehome America)

22 Homebuying 101 Are you ready for homeownership? Financial considerations: Reliable income Pay bills on time Ability to manage debt What kind of home do you want/need? Planning for the future Growing family Spending habits

23 Homebuying 101 Advantages of Homeownership Investment Tax benefits Independence Stability Community

24 Homebuying 101 Steps to Homeownership Homebuyer Education Re-vamp of our Homebuyer Education materials Reflect current market and financing options Focus on preparing homebuyers

25 Homebuying 101 Steps to Homeownership Mortgage Pre-approval Review of income, assets and employment history Understanding disclosures Do s and Don ts of Homeownership: Mortgage payment calculator: what homebuyer can afford Housing costs 30% income

26 Homebuying 101 NEW: 203(k) Education Specifics of Purchase/ Rehab Loan Specific requirements and additional responsibilities for homebuyer

27 Homebuying 101: After the Closing After Closing Welcome Letter from RIHousing Includes details for online, automatic and afterhours payments Customer Service contacts and support First monthly mortgage billing statement Details on principal and interest, as well as tax and insurance escrows

28 Homebuying 101 Visit loans.rhodeislandhousing.org

29 Meeting People Where They Are: Integrating Financial Capability Services with Manufactured Home Living 2017 I M HOME Conference October 3, 2017 Providence, RI 29

30 Context Lack of educational opportunities for this type of housing Ever-changing economic landscape and buyer preferences Potential for sustainable homeownership 30

31 Home Loan Originations Kentucky HMDA Data (2015) 14.54% 7.24% 5.42% 2.36% 22.64% 31

32 Kentucky Market Landscape Manufactured housing is how affordable housing is getting done in Kentucky. In eastern Kentucky, 29% of all homes are manufactured. Indispensable source of housing in rural areas Kentucky ranks 10th in the nation for manufactured home shipments. 2,700 units placed in 2016 Kentucky is 19% of U.S. market share for manufactured housing The market is growing in Kentucky up 19% from Today s manufactured homes are high quality and affordable. Modern and energy-efficient Lending for manufactured housing is currently 50% chattel, 50% real property. Short cycle time: 6-12 weeks from order to installation. 32

Financial Capability There is recoverable volume in the current

According to a survey of Kentucky-based retailers, only 1 out

* The other four prospective buyers either had derogatory

prevent purchase The SmartMH network creates an integrated

ready for purchase can receive Financial Education and Coaching.

sought to buy a home, but were unable to do so.

housing developed by ehome America and Next Step.

33 Financial Capability There is recoverable volume in the current market. According to a survey of Kentucky-based retailers, only 1 out of every 5 unique home buyers end up purchasing a home.* The other four prospective buyers either had derogatory credit, not enough down payment and/or other concerns that prevent purchase The SmartMH network creates an integrated referral system, where the 80% of prospective home buyers not ready for purchase can receive Financial Education and Coaching. In 2016 alone, approximately 12,500 individuals and families sought to buy a home, but were unable to do so.* Homebuyer education curriculum specific to manufactured housing developed by ehome America and Next Step. Nonprofit organizations provide financial capability services, and return as many as 14% of previously denied homebuyers to the market.* *Based on Next Step market research (Dec. 2016) 33

34 Referral Process Credit Score Counseling Tier Level Assigned Counseling Timing Associated with Tier Level Applicable Counseling Agency Tier 1 6 Months of Counseling Required Community Ventures or Frontier Housing Tier Months of Counseling Required Community Ventures or Frontier Housing 590 and Below Tier 3 or Tier Months of Counseling Required InCharge Debt Solutions 34

35 Pathway to success Program Targets Security Freedom of Choice Present Control over your day-to-day, monthto-month finances Financial freedom to make choices and enjoy life Future Capacity to absorb a shock On track to meet your financial goals

36 Financial Capability Program Targets Actions Knowledge Skills Outcomes: Sustainable Homeownership

37 Recommendations for Factory-Built Housing Programs Education Coaching Access to Products and Services Effective Program Financial well-being

Steps to Homeownership

Steps to Homeownership Introduction Steps to Homeownership Learn the steps you will take to becoming a homeowner. Gain an understanding of key terms used in the homebuying process. Freddie Mac 2008 2 A