When we bought our first home, we made a substantial downpayment. We raided our savings accounts and borrowed from our parents. We sweated as the lender combed our credit reports and turned their noses up at our income, student loan debt, self-employed status and work history. We panicked as the lender demanded a lot more money days before closing. And finally we closed. WE WERE LUCKY.
We were lucky that we had savings. Lucky that we had parents that wanted this home for us as much as we wanted it for ourselves – and had the money to help us. Lucky that we found an affordable home in what turned out to be a great neighborhood.
Some people aren’t that lucky. They may be working hard at their job, or at getting an education. Working hard at cleaning up (or maintaining) their credit. Working hard to achieve their piece of the American Dream – which lately seems out of reach for more people. Some people don’t have luck, high paying jobs, or parents waiting in the wings with a checkbook. But they work and they contribute to our economy and our society. Should they have a chance at their piece of the American Dream? I BELIEVE SO.
That’s why I enjoy my work so much. I get to work with first time homebuyers. I get to help them buy an energy efficient, new construction home. I get to help them get a fair mortgage loan with a fixed interest rate. I get to tell them that their city and their state are waiting in the wings with a checkbook, ready to help them make the downpayment that guarantees a low monthly mortgage payment, and helping to ensure that as they move ahead in life, their home can truly be a foundation for wealth.
So many people don’t know that these options are available to them. There are four non-profit developers working in our current neighborhood alone. We don’t have big marketing budgets, so we take alternate approaches. We visit local employers, homebuyer workshops, community events, churches, schools – anywhere we can find ONE PERSON we can help to become a homeowner. We even hire Realtors to list our homes:).
Government deregulation is getting a lot of heat right now as a cause of the mortgage industry meltdown. BUT DEREGULATION WAS NOT AND IS NOT THE ONLY GAME IN TOWN. The government also funds developers and lenders to build affordable homes and make affordable loans.
TO REAL ESTATE AGENTS - If you are working with first time homebuyers, find out about city and state sponsored second loan programs and community developers in your area. Many people come to us thinking that they have to make more money, save more money, and have a high credit score to purchase a home. Some REAL ESTATE PROFESSIONALS thought the only way to get people without a big income and big savings account into a home was with an exotic mortgage. NOT TRUE!
TO FIRST TIME HOMEBUYERS – If you are looking for your first home, do your research. Find out what is offered by local community and non-profit developers. Find out what types of loans are offered by city and state organizations and local, community banks for first time homebuyers. If your lender can’t tell you about these programs – about whether they are available in your area, and explain why they are or are not a good idea for you, FIND ANOTHER LENDER. Same for your REAL ESTATE AGENT (they should at least be able to point you towards the right person to talk to).
Here in North Carolina, there are lots of organizations that exist to service first time homebuyers, and buyers who want a home that can be financed with an affordable, fixed rate mortgage loan. Here’s a short list:
The local Durham volunteer network has posted the schedule for the Volunteer Income Tax Assistance (VITA) program on their website. Free tax preparation is available at several sites throughout Durham, NC.
You can see a full list of locations and the schedule for free tax prep by clicking this link:
You may also call the Duke Law Info Hotline for an updated calendar at (919) 613-8526.
Across the state of North Carolina, the State Employees Credit Union is also offering free tax prep through VITA at all of its branches. SECU is also offering a Tax Refund Express Loan, which allows filers immediate access to their refund, but with much lower fees than they would pay at most tax preparation locations.
There is an income limit for eligibility – in 2008, it was $42,000 per household. I have been encouraging those interested in buying their first home with Self-Help CDC to take advantage of this program. Free tax preparation allows filers to avoid the fees charged by tax preparers for refund anticipation loans and other high fee products. Filers still receive their refund quickly (8-15 days with direct deposit to their bank account). In many cases, this refund is enough to help them purchase a Self-Help home.
Don't live in Durham or in North Carolina? VITA is a nationwide program. Visit the IRS website for more information.
I recently received this release from our sister organization, the Center For Responsible Lending. Thought I'd pass it along...
How to Get $78 From Bank of America
If you were hit with an overdraft fee from Bank of America (BAC) (or one of the banks it acquired) between 2000 and 2007, you may be in for a little cash.
Bank of America recently settled a class-action lawsuit that alleged it (and by extension, Fleet Bank, LaSalle Bank and U.S. Trust Company, which it acquired during that period) changed the posting order of transactions and embarked on other activities in order to increase the revenue it received from non-sufficient funds fees, overdraft fees and similar charges. The lawsuit, which was settled for $35 million, also alleged that the bank failed to warn customers that certain transactions were triggering fees. Even though Bank of America denies any wrongdoing, it is agreeing to pay up to $78 per account holder.
That amount, however, is only a fraction of the $368 the average household pays for overdraft fees each year, according to Bretton Woods, a financial services advisory firm.
Invoking fees has turned into a booming business for the banks. Banks and credit unions brought in more than $37 billion in overdraft fees in 2008. Increased competition for deposits amid the credit crunch and rising defaults has led banks to rely more heavily on fee revenue than on income from loans, explains G. Michael Flores, CEO of Bretton Woods. “They have to bid down on what they charge for a loan and bid up on what they offer in interest [on savings],” he says. And there are even a few banks that have squeezed the margin so much that fee income is all they have.
As a result, banks are making it so easy to trigger fees that even diligent checkbook-balancing consumers are being forced to pay up for overdrafts, non-sufficient funds and returned checks. Most banks, for example, reorder daily transactions so that purchases clear in order from largest to smallest, with any deposits posting last. “Right now, consumers don’t have a choice whether to use this unsolicited line of credit or not,” says Chi Chi Wu, a staff attorney for the National Consumer Law Center, a consumer advocacy group. “They often trip it unknowingly.” (For more sneaky overdraft traps -- and ways to avoid them -- click here.)
Consumer advocates are hopeful that the Federal Reserve will soon pass rules governing overdraft fees. Before the Fed passed new credit card rules in December, it withdrew a section allowing consumers to opt out of a bank’s overdraft protection. The Fed has said it plans to re-address overdraft fees as a separate issue sometime this year.
In the meantime, there’s no downside to claiming a little free money from fees already incurred. Here’s how Bank of America customers can qualify for and claim the cash:
Deadline: May 1, 2009.
Eligibility: Payouts are for account holders at Bank of America or its acquired banks. You must have been charged an insufficient funds fee, overdraft fee, returned item fee, or similar fee within a set period of time: Bank of America (Dec. 6, 2000 through Dec. 31, 2007), Fleet Bank (April 1, 2004 through Dec. 31, 2007), U.S. Trust Company (July 1, 2007 through Dec. 31, 2007), or LaSalle Bank and LaSalle Bank Midwest (Oct. 1, 2007 through Dec. 31, 2007). During that time, you must also have had access to your account through a debit or other bank card.
Payout: Up to $78 per claimant, depending on the number of claims. Filing Procedure: Fill out the forms online, or print out a version to mail in. Simply provide your name, address, telephone number and a few details about eligibility (dates you were a customer and the eligible account number). You do not need to detail specific instances when you were charged a fee. If you’d rather not send your account number, you can specify your home address at the time you believe a fee was incurred.
Below is a great post from Jeff Geoghan about sustainable design in general, and the Make It Right Foundation that is building sustainable homes in post-Katrina new Orleans. Jeff makes some great points about how sustainable equals practical and affordable, which is a definite departure from the conventional wisdom on green building.
For the last 25 years, industrious American pioneers have been laying the groundwork for a new revolution.
With developable land diminishing and existing homes aging, the time is coming and is here now for Americans to look for the better option in homebuilding - what has been termed "sustainable design" or "green building". All politics aside, the trend towards better homes benefits all Americans who want a better life for their children.
Why would a homebuyer do well to look at a new sort of design? The benefit of owning a home boil down to the following:
Equity building over the life of the ownership - the longer the better. Our parents lived in cramped post-World War Two homes for 50 years - we can do it, too.
A safe, stable environment for our children to learn, play and grow. We can tailor our homes to fit our family's lifestyle.
Participation in a community. Yes, this is coming back strong after a generation lost in the suburban wasteland. Community is a strength, and common bonds of ownership cement that.
The new homes being designed to be sustainable enhance every aspect of the home ownership experience.
Homes built with longevity coupled to efficiency are more likely to cost less and appreciate faster, allowing homeowners to put increasing amounts of their utility and repair dollars back into the family fund. And we don't need to sacrifice space or convenience in the new breed of home design - quite the opposite. Spaces are intelligently designed for real living and convenience is the pairing of cutting-edge technology with new, affordable methods (instant-on hot water heaters being a current example of this).
A home that is "green" designed put the health and welfare of the occupants first. By looking at the various systems and materials that we come into contact with, the new home designer works hard to eliminate toxic compounds that adversely affect air quality, and designs the home to be almost self-sufficient, relying more on natural energy sources such as the wind, sun or rain. By removing the hazards and adding cleaner, reliable systems the home of the future will be incredibly stable and safe for families.
The rise of the "green building" and "green remodeling" movement, coupled with the increased interest in home projects to improve the sustainability of a building, have created a new community that reaches from neighborhoods to nations. There's a vested interest that environmentally-responsible homeowners have that is shared. One needs only to look at Brad Pitt's"Make It Right" New Orleans home building initiative to see the energy and sense of community fostered when folks decide to do home building a new way.
It's exciting to be at the cusp of a new era in home building. Many innovative builders are stepping out from traditional design and seeking new options in home design. Other builders are adding "green" features every day to their existing home plans, in response to the demand. And the real winner is YOU!
It's a great time for real estate professionals to step out, too. The cadre of Realtors who have taken on the task of educating the public on their new home building options have a lot say, too. Those who are Activerain bloggers hold in their hands a great tool, the nation's most influential network of local real estate practitioners. We have the opportunity to get excited about what Mr. Pitt is doing in New Orleans and encourage him and his team to share their home plans, plans for affordable, smart structures that meet the needs of families. Let's take a first step by contacting the "Make It Right" foundation, asking that they offer the plans to green builders and communities for a nominal price - in the interests of pushing the home revolution that much further along in 2009. We can all benefit from the amazing work being done in Louisiana - let's contact Mr. Pitt to say so.
Organizations like the "Make It Right" Foundation are doing the work of building the home of America's future today. And it's happening in your community too. I'm excited to be here, now, watching the next evolution in the American home take place. The question is, are you?
Jeff Geoghan is a Realtor in Lancaster County, Pennsylvania focusing on Green real estate ideas & projects. As an advocate of greener living in Central PA, Jeff is the author of www.LancasterCountyBlog.com and offers advice and presentations of the benefits of buying & remodeling green.
NC Sustainable Building Competition Winner! This 3 bedroom, 2 bath home is designed for comfortable and sustainable living. The one story floor plan features an open kitchen and living area, three spacious bedrooms, and is wheelchair accessible. Additional sustainable features include Energy Star appliances and ceiling fans and an energy efficient heating system. Drought resistant landscaping and a rain barrel help to decrease the cost of maintaining the lawn. Stained concrete floors and low VOC paints decrease indoor air pollution and provide a safer, more comfortable living environment. 1020 Kent Street meets SystemVision standards for comfort and energy efficiency, and comes with a two year heating and cooling bill guarantee.
Purchase of this home is available to first time homebuyers who intend to occupy the home as their principle residence.
see additional photos below
PROPERTY FEATURES
Central A/C
Central heat
Dishwasher
Refrigerator
Stove/Oven
Laundry area - inside
Yard
OTHER SPECIAL FEATURES
Open Floor Plan
Universal/Wheelchair Access
EnergyStar Appliances
Super Efficient Central Heating and Cooling System
Sustainable Design Home
Drought Resistant Landscaping
Low Allergen Flooring - Stained Concrete and FLOR Carpet Tiles
Tax season is coming up fast. For some of those who anticipate a refund, that wonderful lump sum is a great way to pay down some bills. For others, it's party time - new car, new clothes, new furniture, maybe even a vacation.
But would you believe that your tax refund can get you into a new house? Yes, I've been watching the news. Yes, I know that many lenders are requiring hefty down payments, or not lending at all. And no, I haven't fallen completely off the turnip truck.
At Self-Help, we've been making responsible loans for over two decades, and selling affordable homes since 1996. From the front lines, I can tell you - it is possible for first time homebuyers without perfect credit to purchase a home with a low downpayment. And a fixed interest rate mortgage.
So, back to this tax refund thing. We're building new homes across the state of North Carolina in the $95,000 to $120,000 price range. We offer some really great features you wouldn't expect in this price range (check them out here), and we help our buyers access low and no interest second mortgages that make their mortgage payments truly affordable.
Our average buyer that uses financing from our partner credit union (Self-Help Credit Union), can purchase with as little as 3% contribution - that includes closing costs. That means as little as $3,000 could move you into a new home, with an affordable fixed rate mortgage.
Interested? Give me a call at 866-265-3488, or drop me an email at Tamara.Heyward@Self-Help.org. We're currently building in Durham, Greensboro, Goldsboro, and Charlotte. A quick phone interview or email form tells you if you qualify - see the (not so) fine print below.
Here's the fine print. Notice that it's the same size as the rest of the print (smile):
You should be a first time homebuyer. Just means you haven't owned a home in the past three years.
You should live in the home, and not rent it out. We work hard to put together a great opportunity, because we believe that long term homeownership makes for wealthier, healthier people and better communities. No doubt, owning rental property is a great path to wealth, but that's not the path we're offering.
You should meet the income guidelines. Our mission has always been to provide opportunities to those that might not otherwise have them. Police officers, school teachers, city employees, medical workers - we've all heard about how these hard workers often can't afford to live near their jobs. Our great financing gives a chance to help, although it also comes with some rules as to how much money our buyers can make.
OPENING THE DOOR TO NEW POSSIBILITIES. COME JOIN US THIS WEEKEND!
OPEN HOUSE AT NEW CONSTRUCTION HOME FOR SALE
1036 Kent Street Durham, NC 27707 Lyon Park Area
Saturday, October 11, 2008 2:00pm-4:00pm
Tour this new construction home and learn about financing for 1st time buyers. Low monthly payments!
About this home:
1036 Kent Street. 3 bedrooms, 2.5 baths, 1258 Square Feet. This one and one half story bungalow style home features a large open living and dining area and a first floor master bedroom suite, and includes a total of three bedrooms, two full bathrooms, a half bath, and an L-shaped galley kitchen with a breakfast bar that opens to the dining room. The second floor offers two bedrooms and a shared full bathroom, the laundry area, and abundant easily accessible storage. The Arts and Crafts inspired exterior offers a side to side gable roof and a front shed dormer, a covered front and rear porch, and an exterior storage room.
For more information about our homes and our commitment to affordable and fair home loans, visit our website at www.self-help.org/homes-for-sale.
Directions From Durham Freeway (147) North: take Exit 13 (Chapel Hill Street). Turn right at end of exit ramp onto West Chapel Hill Street. Take left turn at third traffic light onto Kent Street. Home is at the corner Kent and Halley.
From Durham Freeway (147) South: take Exit 13 (Chapel Hill Street). Turn right onto West Chapel Hill Street. Take left turn at second traffic light onto Kent Street and follow directions as above.
From downtown, take West Chapel Hill Street. Cross Durham Freeway and follow directions as above.
Click on the map to print directions from your location.
Credit Suisse has reported that a second wave in the foreclosure crisis may be on the horizon. Option ARMs, which I've probably ranted about enough (see Wachovia Reigns In Pick-A-Pay Parts I and II), are scheduled to start resetting en masse around 2009, with the most reset volume coming in 2010-2011. A particularly onerous feature of these loans is that even if your first scheduled reset is five years, the loan can reset sooner once your negative amortization reaches a certain point.
The payment shock is expected to be much more severe for option ARMs than for subprime ARMs. You think a 10% increase in your payment was bad, wait til you see the projected 80% increase that will happen with some option ARMs. According to an article at BusinessWeek's website, the good news is that a combination of action by the lending industry and the government could help prevent some of the damage.
Self-Help was featured in a local paper, the Raleigh News & Observer, over the weekend. Our mantra when selling homes and lending money is to use common sense and always look at the big picture. It's kept us afloat so far, and hopefully will allow us to continue to do good things for the people and communities that need our services. As an organization, we usually go out of the way not to blow our own horn, but I'm glad the N&O decided to do a story on us. I think it's good for people to know that not all lenders have acted irresponsibly, and that it is possible for a lender to succeed by caring about people as much as it cares about its bottom line. As my fellow real estate agents know, the end of a long day feels much more rewarding when you know you have really helped someone achieve the dream of homeownership.
A blurb from the article:
"One year into the credit crunch and mortgage meltdown, a Durham financial institution that banks on neighborhoods at risk is still doing business as usual.
How so?
Common sense, said Martin Eakes, co-founder and CEO of Self-Help, a Main Street nonprofit that has, according to its Web site, provided $5.24 billion to 60,130 homeowners, small businesses and nonprofit enterprises since it started the practice in 1984.
And it's still buying, rebuilding, selling and lending for and to just the sort of people in just the sort of places who are caught up in the sub-prime lending mess. Yet, with much of the country's banking, developing and real-estate industry in crisis, "Financially, we're doing fine," Eakes said in an interview this week.
Not that he doesn't feel depressed and keep his fingers crossed.
"So far, our borrowers are doing pretty well, but I'm anxious for them a little bit," he said; but, "I'm depressed for those communities we have helped to build up." "
We toured our sustainable design home at 1020 Kent Street a few days ago. The more visible sustainable and energy efficient elements are now being installed as the home is completed. We were there as the light fixtures went up and the carpet went down. Here are some photos from our visit:
Here's a view through the back door into the house. Bedrooms to the left, kitchen and living room to the right. You can see through to the front door. The concrete stained floors look great, although they are covered with paper to protect them as construction is completed.
The bedrooms all feature Flor Fedora carpet tiles. The tiles are partially made of recycled materials, can be easily arranged into alternate patterns, are low VOC, and don't trap dirt like traditional carpets. Here in the master bedroom, we did taupe tiles with a brick colored border. The 2 additional bedrooms are solid taupe.
The light fixtures have a modern feel and are equipped with energy saving compact florescent bulbs.
The back porch will be a great place for cookouts and hanging out. It opens to a cleared area and a brick planter.
The driveway form is complete and ready for concrete. We want to preserve as much permeable surface as possible, to prevent drainage and erosion issues. Most of the driveway will be two concrete strips with a strip of grass between. At the top and bottom of the driveway are concrete crosswalks, allowing access to the front and rear doors.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
With developable land diminishing and existing homes aging, the time is coming and is here now for Americans to look for the better option in homebuilding - what has been termed "sustainable design" or "green building". All politics aside, the trend towards better homes benefits all Americans who want a better life for their children.
It's exciting to be at the cusp of a new era in home building. Many innovative builders are stepping out from traditional design and seeking new options in home design. Other builders are adding "green" features every day to their existing home plans, in response to the demand. And the real winner is YOU! 
Central A/C
Here's a view through the back door into the house. Bedrooms to the left, kitchen and living room to the right. You can see through to the front door. The concrete stained floors look great, although they are covered with paper to protect them as construction is completed.
The bedrooms all feature 
The light fixtures have a modern feel and are equipped with energy saving compact florescent bulbs.
The back porch will be a great place for cookouts and hanging out. It opens to a cleared area and a brick planter.
The driveway form is complete and ready for concrete. We want to preserve as much permeable surface as possible, to prevent drainage and erosion issues. Most of the driveway will be two concrete strips with a strip of grass between. At the top and bottom of the driveway are concrete crosswalks, allowing access to the front and rear doors.
;)
;)
