HOMEOWNERSHIP CENTER OF TACOMA
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Mission Statement
Founded in 1993, Homeownership Center of Tacoma | Northwest (HCNW) increases viable and achievable homeownership options by constructing new and renovating existing homes. HCNW guides first-time homebuyers through selecting, financing, and maintaining their new homes. HCNW exists to support low- and moderate-income (LMI) families in building assets and strengthening their long-term financial health through homeownership. HCNW provides a range of services linked to homeownership that allow for LMI families from diverse backgrounds to learn about the home buying process, position themselves to buy a home, select and finance a first-time home, and manage their home once they own it. The primary homeownership avenue that HCNW uses is single family unit homes, which is unique, as the majority of affordable housing developments focus on low-income rental housing, which do not contribute to assisting LMI families in building assets and escaping from the cycle of poverty. HCNW’s perspective is that LMI families can build assets with the proper support and we believe that homeownership is a viable option for many LMI families.
About This Cause
HCNW’s primary goal is to assist low and moderate-income individuals and families in achieving homeownership, building assets, and becoming more self-sufficient. The primary way that HCNW has addressed this goal is through the continual development of single-family homes. Beginning in the early 1990s, HCNW began acquiring properties and rehabbing them and selling them to low- and moderate-income families. Since its founding in 1993, HCNW has invested over $30 million in developing more than 215 homes in Tacoma. Many homeowners have bought homes from HCNW and then sold them back to HCNW, which has both benefited the client by building wealth and has advanced HCNW’s mission by retaining its affordable housing stock within this program. Given the unique nature of this program, HCNW reserves the right to have the first choice to purchase all homes sold to our clients, which also preserves the housing within our organization. Down Payment Assistance Many of the clients that HCNW works with have limited savings that can be allocated to down payments. For many LMI families, limited savings restrict their ability to buy homes because they are unable to make substantial down payments, which are typically required for LMI families with lower credit scores. With HCNW’s down payment assistance program, our clients can access a silent second loan at a 0% interest rate, which qualifies as their down payment, and enables them to move forward in the home buying process. Ultimately, this assistance provides the dollars that close the gap between what loan amounts LMI buyers can qualify for and final purchase prices. Financial Counseling For many LMI families with limited purchasing power and savings, getting into a position where buying a home is feasible can be difficult. In fact, many families that HCNW works with cannot qualify for loans in amounts sufficient to buy homes when they first come to our organization. However, through our financial counseling program, HCNW works in depth with clients on an ongoing basis, providing complimentary 90-minute financial counseling sessions monthly while clients strive towards improving their financial outlook. With the proper support and financial information and money management actions, most clients can be in a position within 12-36 months to purchase a home, and HCNW is unique in that it provides long-term financial counseling support to get clients to a place where they qualify for a mortgage. By offering HCNW one-to-one financial counseling, HCNW creates customized strategies with clients to develop a comprehensive understanding and action plan to meet their financial goals. Some of the topics that HCNW’s financial counseling program covers include: • Detailed credit report review • Determining Financial Goals • Creation of a Financial Action Plan • Household budgeting and day-to-day spending plans • Debt paydown and debt management strategies • Creating emergency funds • Net worth statement creation and management • Long-term debt management and financial planning Homeownership Counseling Buying a home is both exciting and dramatically different than any other kind of purchase. Many clients have no prior experience with buying a home, and need education on the various steps in the process, and how each step connects to the next. HCNW offers regular homeownership counseling and education classes where clients can learn about the overall process. HCNW use an approved curriculum from the Washington State Department of Financial Institutions for its five-hour classes. Content in these classes covers the following topics. • The decision to purchase a home, • The selection and purchase of a home, • Pre-qualifications for mortgage, • Home maintenance and ongoing financial management post-purchase, • Issues arising during or affecting the period of ownership of a home, including financing, refinancing, default, and foreclosure, and other financial decisions, • The sale or other disposition of a home, • Resolving or preventing mortgage delinquency or default, and • Reverse mortgage counseling. Home Maintenance Education HCNW believes that once a family buys a home that they should have access to ongoing support and services. One example is having the tools to understand the basics of home maintenance to preserve and maximize their investment. HCNW works with multiple partner organizations to offer regular classes on a basis on a wide range of topics including basic home repairs, plumbing and water, furnace filters and cleaning, caulking and waterproofing, and gutters and siding. Classes and workshops are now held virtually. Current Initiatives As noted above, HCNW has multiple initiatives that will increase its capacity and make a larger impact in South Puget Sound. These initiatives specifically address the barriers to developing affordable housing and equip HCNW with much needed strategic capacity to access funding, secure land, and provide the financial education and affordable homeownership needs of more low- and moderate-income families. Multifamily Affordable Housing Development HCNW has diversified strategies in response to the growing need for affordable housing in Puget Sound. HCNW is forging new relationships with financial institutions and is strengthening existing partnerships with nonprofits, public entities, philanthropic institutions, and investors to increase the availability of affordable multi-family housing throughout Pierce, Thurston, Yakima Counties. In 2019, HCNW prioritized this shift by launching a multi-year capacity building effort that includes working with the City of Tacoma and other regional public entities to develop multifamily housing developments that prioritize homeownership. In addition to this key step, HCNW has also received two new designations that will allow HCNW to raise and leverage additional funding to finance these multifamily developments. These designations are a Community House Development Organization (CHDO) and a Community Based Development Organization (CBDO), both of which enhance HCNW’s ability to play a key role in raising capital for other affordable housing projects in the sound sound, and are described below. Community Housing Development Organization (CHDO) Many affordable housing projects involve complex sets of public, private, and nonprofit partners working together to acquire property, develop and build housing, and then sell and manage properties. While this process has produced an increase of affordable housing in our region, the vast majority of these efforts have focused on low-income rental housing which is time restricted, meaning that the units will eventually revert back to full market rate. HCNW believes there are other opportunities to address the high need for affordable housing, while at the same time assisting LMI families in building assets. This recognition led HCNW to become the only Community Housing Development Organization (CHDO) in the south sound, which differentiates HCNW and strategically positions it to access and leverage federal set aside funding as part of HUD’s HOME Program. The HOME program is one of the nation’s largest affordable housing funding pools. A CHDO designation specifically grants access to a minimum of 15% of a city’s or county’s HOME funding allocation to develop affordable housing projects. CHDOs can also access capacity building dollars from local jurisdictions. As a CHDO, HCNW is positioned to also be an advocate for more local dollars to be spent on LMI housing projects that prioritize and include homeownership options for LMI families. Community Based Development Organization (CBDO) In addition to being a CHDO, HCNW is designated as Tacoma/Pierce counties only Community Based Development Organization (CBDO). CBDO is a comprehensive designation that focuses on enhancing physical, social, and economic environments in low-income areas. Through this designation, HCNW will be able to access other federal and state funding streams to improve overall neighborhood health, including the development of affordable housing.