Manna gave testimonies concerning the Home Purchase Assistance Program (HPAP). HPAP is DC’s homegrown down-payment assistance program. It has helped 13,500 DC residents purchase their first home. Manna and HPAP recipient’s trumpeted the program’s success, addressed issues, and offered steps for improvement. DHCD is accepting comments until close of business on Monday, July 30, 2012. You can email your comments to DHCD.EVENTS@DC.GOV with a subject line “Consolidated Plan comments.”
Manna Testimony
“Though the numbers are lower for fiscal year 2013 [due to federal cuts], we are delighted that 275 first-time homebuyers will be able to access down-payment assistance through the Home Purchase Assistance Program...[HPAP] continues to be one of the most important ingredients in helping low and moderate income DC residents become successful home owners and lifting up neighborhoods.
As you know, the Washington Post expose by Debbie Cenziper on the use of federal funding through DHCD unjustly disparaged many of the tools used to fund affordable housing in the District. I would like to speak specifically about the article on HPAP, which cited a 1.8% foreclosure rate amongst HPAP recipients as evidence of a ‘Million Dollar Wasteland’. If it is true that fewer than 2 % of the HPAP loans have been lost to foreclosure, the District should be extremely proud of such a low foreclosure rate, especially through the worst years of the housing crisis. FHA and Fannie Mae foreclosures on loans originated in the last 10 years are many times greater than that, and reflect home buyers with higher incomes and greater household assets than the typical HPAP borrower. We believe this very low loss rate reflects the benefits of the education required to receive HPAP, along with the full documentation underwriting by the Greater Washington Urban League, the low fully disclosed fixed rate payments and the property inspections. HPAP home buyers often have payments lower than comparable rent, and have reasonable payments to income.
The article and other reports have cited high delinquency rates, which are troubling statistics though consistent with the FHA and Fannie Mae data on increased delinquencies in this recession. We would like to share some suggestions on how to assist these home owners and help the District reduce the delinquencies which affect HPAP cash flow. HPAP only truly loses the District’s money when a foreclosure wipes out the HPAP principal, though the loss of principal cash flow diminishes the pool of funds for current period HPAP lending.
Before we offer suggestions, [let’s hear from] HPAP recipients.”
Testimony by Pablo, Ward 1 Homeowner and HPAP recipient
“The month before our fifth year anniversary of our HPAP loan, when we were scheduled to begin payments toward the loan, we received notification by e-mail from Amerinational Community Services. We made our first payment on time and immediately scheduled monthly automatic deductions. At the same time, we decided to begin the process to refinance. It wasn't until our agent pulled our credit report that we discovered that Amerinational Community Services had notified the credit agencies six months prior to when we were supposed to begin payments and indicated to them that we were delinquent in our payments, thus negatively affecting our credit score...By then, we were already part of the statistics mentioned in the [Washington Post] article and now I question the accuracy of the HPAP repayment process. It was the servicer who had it wrong, not me and with a 1.8% foreclosure rate in the HPAP history, I think not the overwhelming majority of those recipients as well.”
Testimony by DeLisa, Ward 5 Homeowner and HPAP recipient
“I recently started paying back my HPAP loan; I wouldn’t have been able to purchase my home without it. Before I received repayment documentation, I happened to speak with Frank Demarais at Manna. He told me to be on the lookout for a letter from Amerinational Community Services, which is the HPAP loan repayment servicer. When I received the letter, the envelope didn’t mention anything about HPAP, and neither did the enclosed letter or payment coupons. If I hadn’t spoken with Frank, I would have thought it was junk mail. I possibly would have thrown the letter out. I’m lucky; not every HPAP recipient has a Frank.”
Manna Testimony
“In short, Manna believes there are basic things that DHCD can do with the servicer and with current HPAP counseling agencies to lower the default rate:
1. Change the initial letter and payment coupons to clearly demonstrate that these documents are for HPAP repayment. HPAP recipients do not start repayment until year six of being in their home, so it is essential that the documentation is clear.
2. Once an HPAP recipient is marked as delinquent or in default by Amerinational, DHCD should contact the homeowner to alert them to the missed payments and contact the HPAP counseling agency the recipient received counseling from and have the agency follow-up. This procedure offers a way to catch reporting mistakes by Amerinational or to provide needed counseling and budgeting assistance to HPAP recipients.
HPAP has been and continues to be an extremely successful program and a vital tool for low and moderate income DC residents to build wealth and independence through homeownership. DHCD has the opportunity to make the program even stronger and more efficient.”
DHCD is accepting comments until close of business on Monday, July 30, 2012. You can email your comments to DHCD.EVENTS@DC.GOV with a subject line “Consolidated Plan comments.”
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