As the DJC first reported early last year, Habitat for Humanity was contemplating an affordable housing project on a Columbia City property that had been foreclosed by its lender. And, last summer, that mid-block site at 5022 Martin Luther King Jr. Way S. sold for a bit over $1.3 million to a Habitat-related LLC. Kidder Mathews represented the lender and seller.
The new five-story, 58-unit plan by JWArchitects recently had its permit application accepted by the city. No design review is required since it’s an entirely affordable proposal. It also includes six surface parking stalls, to be accessed from a driveway on the building’s south side.
Want to buy a home? Your to-do list is long — and pricey. Secure a job that pays enough. Build good credit. Line up a down payment. And then, of course, find a house or condo that’s actually in your budget.
But for many homebuyers, financial decisions from years ago add one more barrier during that process: debt.
Too much debt can prevent a prospective homebuyer from getting a mortgage. And in America, that problem doesn’t affect everyone equally.
Black homebuyers are more likely to be denied mortgages than white buyers are, a LendingTree analysis found. Among the factors: Nationwide, Black and Hispanic families have more debt relative to their income and assets than white families do, according to the Employee Benefit Research Institute.
Read more on Habitat SKKC’s new effort to pay off up to $50,000 in debt for qualifying homebuyers who plan to buy a Habitat home in The Seattle Times.
As you know, Habitat for Humanity believes in a world where everyone has a safe and decent place to live. With the next Legislative session in full swing, we would like to let you in on some of the bills HFH SKKC will be supporting that align with our vision!
To amplify Habitat’s Black Homeownership Initiative, Habitat for Humanity SKKC has launched a Debt Barrier Removal Program (DBRP). The overall ratio of Black homebuyer applicants is only 6%. Of those, 10% are denied. While the SKKC affiliate has long maintained a higher ratio of Black homeowners at 34%, it realized more needed to be done to help those impacted by historical redlining and institutionalized credit policies.
Excessive debt is often an obstacle to Black homebuyers, particularly first-time homebuyers. Habitat’s Debt Barrier Removal Program is aimed at removing that obstacle by paying off those debts and enabling the buyer to secure financing from a traditional lender. Habitat staff are collaborating with other community housing organizations, such as The Urban League, HomeSight, and Africatown to recruit qualifying candidates for the program.
Applicants referred to Habitat SKKC will be selected using standard criteria, with the final review point being their excessive debt. Once applicants meet the criteria for participation in Habitat home buying, their debt is reviewed and paid. Types of debt that might qualify under this new program include deferred student loans, tax liens or other government judgments, and others assessed on a case-by-case basis, such as medical debt, debts due to identity theft, etc. Their refreshed credit status allows lenders to finance the buyer.
The DBRP agreement adds a level of oversight to the traditional Habitat homebuyer process. Habitat staff simply monitor the homebuyer’s finances monthly to insure there are no changes in income or assets while their home is under construction. Debt Barrier Removal Program funding of $250,000 aims to support 5-10 households in Habitat’s 2022-2023 fiscal year.
Homebuyers participating in the DBRP contribute an additional 125 hours of sweat equity and sign their final agreement when their home is completed. The debt payment is built into the buyer’s affordable house payment. When the home is sold back to SKKC, the debt payment portion of the sale will be returned to the DBRP’s account to help future Black homebuyers.
Homeownership in the U.S. constitutes the largest component of median household wealth through intergenerational wealth transfer. The wealth gap created by generations of discriminatory housing practices has left Black families without the benefit of decades of real estate appreciation, which could be leveraged to help their children and grandchildren become homeowners, pay for college, or weather financial challenges.
The Debt Barrier Removal Program is another step toward chipping away at institutionalized obstacles to Black Homeownership, and it represents Habitat SKKC’s deep commitment to supporting Black families in the region. For more information on Habitat for Humanity SKKC’s new Debt Barrier Removal Program, please visit: https://buyhabitat.org/debt-remediation-fund/
In the face of declining levels of institutional trust worldwide, Habitat for Humanity International has been ranked among the world’s top ten most trusted nonprofit brands in Morning Consult’s Most Trusted Brands 2022 Report. Morning Consult is itself rated among the least biased of global polling organizations with a very high rating for factual reporting by FiveThirtyEight, MediaBiasFactCheck, and Wikipedia.
What this ranking means is that Habitat for Humanity has consistently delivered on its mission and its promise to work toward providing a decent place for everyone to live since 1976 – for more than four decades! Morning Consult reports that this is the most important trust variable current and potential nonprofit donors cited in their willingness to support a nonprofit organization. Habitat for Humanity has held this trust across generations through its actions globally and regionally.
The Morning Consult report also indicates that Habitat for Humanity has, through its consistent actions, navigated a hard-to-achieve pathway to success: “Getting Americans to know your brand, while establishing a legacy of following through organizational promises.”
Habitat for Humanity SKKC not only benefits from this international trust, but it also supports and maintains it through its traditional homeownership programs and its nimble innovations in response to our region’s extreme housing crisis. Programs such as ‘building up’ to provide homeownership through multi-family construction, the Black Homeownership Initiative and this year’s Debt Remediation Pilot Program are inventive and timely responses to the need.
In addition, Habitat SKKC is sustaining trust with action via legislative advocacy that supports policy solutions to the affordable housing crisis. To view the full Morning Consult report, click here.
