Sunday, June 02, 2002

Minorities advised by home program

Classes answer questions

By Kevin Aldridge
The Cincinnati Enquirer

        Owning a home was something Sakeena Abdullah often thought about but never followed through on. Like many people, Ms. Abdullah questioned whether she could afford the step up from renting. And like many people, she resisted getting financial counseling.

        But after discovering a home ownership program that offered classes about home buying, financial planning assistance and credit counseling, her attitude changed.

        Now thanks to “The American Dream Account” — a program sponsored by the NAACP and Housing Opportunities Made Equal — Ms. Abdullah could soon be one of a small, but growing, number of African-American homeowners in Cincinnati.

        “I determined that I was tired of renting and wanted to buy a home,” said Ms. Abdullah, 57, who lives in a Bond Hill townhouse. “When I added up rent and all the utilities I was paying, I found it basically amounted to a house note.

        “The American Dream program helped get me ready and prepared for the opportunity to be a homeowner. I'm hoping to be one of their success stories.”

        In the two years since its inception, The American Dream Account has helped turn more than 50 Hamilton County renters into first-time homeowners. Organizers say another 200 residents are actively involved in the program — some nearly ready to close on new properties with an average price tag of $85,000.

        The program was spawned from a 1998 lawsuit filed against Nationwide Insurance Co. by the NAACP and HOME. The organizations challenged the company's practice of not insuring African-Americans. The sides agreed to a settlement in 1999 that included Nationwide paying $750,000 to HOME and the NAACP — money being used to fund the program.

        Mary Crawford, operations manager for the Greater Cincinnati Mortgage Counseling Services, a partner in the program, estimated the program would produce at least 75 new homeowners annually in Hamilton County. That will help to increase Cincinnati's 26 percent home ownership rate for African-Americans, she said.

        While the American Dream Account does not target minorities, all but one of the families that have received funds are African-American.

        “This program generates interest among blacks because it helps them to understand and become comfortable with the home-buying process,” Ms. Crawford said. “A lot of time getting past the creditor is the biggest hurdle to get over for African-Americans.

        “Our goal is to help people get to a level of security with their finances and save money, so that when they go meet the bank they feel more comfortable,” she said.

        Those who come through the program, African-Americans in particular, have a lot of misconceptions about homebuying, Ms. Crawford said. For instance, most believe that because they've had credit problems in the past that they can't get a home loan.

        Many people also tend to believe they have to make between $30,000 and $50,000 to get financing, she said.

        “That's just not true,” Ms. Crawford said. “We've had some people come through our program and close on homes with $8- and $9-an-hour jobs. No, they weren't able to purchase real expensive homes, but they were able to get something nice.”

        To be eligible, applicants must be residents of Hamilton County, employed for at least a year and their gross annual household income cannot exceed 80 percent of the county's median family income. That means a family of four could make up to $51,500 and still be a candidate.

        Once enrolled, individuals must attend four classes offered monthly focusing on financial management, planning, credit restoration and predatory lending. Participants must also save $1,000 of their own money.

        “We do not want people to close on a home without having funds to fall back on,” Ms. Crawford said. “We don't want people going into their new homes broke.”

        Once applicants meet all the criteria, they receive a $2,500 grant toward the purchase of a new home.

        It can take anywhere from a month to a year to complete the program, Ms. Crawford said.Counselors do an assessment of each applicant to determine how long it might take before they are able to get a home.

        “They don't pull any punches,” Ms. Abdullah said. “They tell you up front it may not be a short-term or easy process.

        “Don't think you can come in with bad credit and buy a house next week; it doesn't work like that,” she said. “But if you don't give up, they won't give up.”



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