Contributions by: Frank Demarais, Sarah Scruggs & Diane Richardson Spaite
For three decades Manna, Inc. has
effectively, “…helped low and
moderate income persons acquire quality housing, building assets for families
through homeownership, revitalized distressed neighborhoods and in effort to
preserve the racial and ethnic diversity” of the District of Columbia. Mission
success occurs when Manna develops and builds affordable housing, with an
emphasis on homeownership. The non-profit provides free high-quality financial
literacy training/ homebuyer education services and fosters continued,
multi-faceted post-settlement support for owners. Without partnership with
government agencies, sister nonprofits and for-profit companies all of Manna’s
efforts to advocate for public policies and affordable housing resources would
be in vain.
Manna,
Inc. assists each potential home owner with a counseling assessment followed
appropriate home buyer education. Counseling and education are structured to inform home buyers of the
fundamentals of qualifying for mortgage lending; choosing appropriate loans;
property purchase options; and successful long-term ownership obligations.
Potential owners are served based on their needs upon the point of contact. The
Home Buyers Club program is recommended for those who need basic information
and longer-term support on credit, income or other elements home purchasing.
Individual assessments are offered for potential owners close to mortgage ready
and interested in property. Manna provides resources for those Manna buyers and
connects other potential owners to appropriate mortgage lenders. In the
last 30 years, the non-profit has developed over 1,000 homes ensuring every
purchaser participated in the home buyer education process.
When potential owners move from the Home
Buyer’s Club to becoming home owners, Manna offers ongoing advice upon
owner’s request. The Home Buyer Club has an open door policy for all its
meetings. Existing home buyers who have financial difficulty are always
welcome. All Manna Home Buyer Club owners were contacted twice in the last 5
years with reminder list of items to review and a health checkup for the home
owner for money savings options regarding loan, insurance and tax issues. Manna
specifically mailed five year reminders to owners to prepare them for HPAP
payments, beginning 5-years post purchase and DC real estate taxes, abated for
lower income buyers for the 5-year period. Other affordable housing nonprofit
organizations also performs similar outreach, including mailings by the Greater
Washington Urban League affiliated HPAP community-based organizations.
At
the end of 2011, Manna reviewed all home buyers from its 30 year history and
documented a less than 2% foreclosure rate, and the purchasers from 2002 – 2011 had zero foreclosures, in the worst
real estate/ economic recession where even the standard Fannie Mae programs had
foreclosures on over 5% of their originations from 2005-2007. This achievement is attributed to Manna,
Inc. requiring all home buyers receive home buyer education; fixed rate, fully
disclosed mortgages and confirming their documented income. Manna’s professional services supporting 30
to 50 home owners annually is a part of significant baseline contributing to
the overall health of the market. Through two recent campaigns: 2012 Own
Now and the CityLIFT program, Manna has significantly increased its support of
homebuyer hopefuls.
Over 90% of the Manna home buyers received DC
Government down payment loans as part of their purchase. The predominant
program is the Home Purchasing Assistance Program (known as HPAP) for DC
residents, but also included Employer-Assisted Housing program loans for DC
Government Employees, and the Homestead Preservation Program. Each of
these loan programs requires 8 to 10
hours of face to face home buyer education, with additional support
in the form of property inspections.
HPAP supports 250 to 400 new home owners, and
other DC government homeownership programs support others. This is in a
real estate market that totals about 6,200 transactions last year, with about
2,000 under $400,000. These programs provide about 10% of the buyers to
the overall market and about 25% of the buyers to the under $400,000 market
(market data from GCAAR Housing Reports posted on their website).
HPAP has partnered with over 13,000 DC
residents as they move out of systems of dependency and ongoing subsidy, and
currently generates $2 million in repayment every year. Even through the
housing crisis, HPAP recipients have only a 2% foreclosure rate. HPAP is not
money the District spends, but rather an investment the City makes in homes all
across DC, an investment with infinite return. Homeownership offers a way for
prepared families to build wealth through the equity in their home, helps
reduce crime in neighborhoods, and improves children’s educational performance.
The impact is very specific to the
neighborhoods where ownership happens, creating opportunities for longtime
residents to stay in higher cost neighborhoods. Investment in new home owners statistically
gives way to changing the citizen involvement pertaining to safety, school and overall
quality of life in the neighborhood. More significant is the impact on
individual families, providing the only tangible wealth creation and a
financial stabilizing tool for many.
As
part of the one-time CityLIFT program, Manna was granted $7 million by Wells
Fargo to lend as downpayment assistance. Over 1300 people came to the kickoff
event in early October 2012 and 527 of those prequalified for a mortgage and
left with downpayment reservations, while the others were scheduled for
counseling appointments at Manna. Of the 527 with reservations, 198 were DC
residents who made fewer than 80% of the Area Median Income, which, again, is
the income group that HPAP serves. Each
week 20 new persons make contact about the LIFT program, which has allocated
all of its funds, and all DC residents are directed to the HPAP program.
Manna,
Inc. believes firmly access to homeownership provides stable housing expenses
to populations who have most impacted by steadily increased rent costs.
Although home ownership involves costs such as ongoing maintenance and real
estate taxes, the overall cost over time is still well below unpredictable rent
increases. Therefore, families are empowered to plan for their housing expenses
and contribute substantially to the overall health of their neighborhoods and
the District.
