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Revisiting Poverty in Rural America

Where are we 50 years after the war on poverty began?

In the 2014 special edition of Rural Voices magazine, HAC revisits the issue of rural poverty with frank questions, informed viewpoints, and honest assessments. Experts and contributors from across the nation help provide a better understanding of this complex issue and its intersection with housing in rural communities.

rv-se-2014-cover

Where are we 50 years after the war on poverty began?

In the 2014 special edition of Rural Voices magazine, HAC revisits the issue of rural poverty with frank questions, informed viewpoints, and honest assessments. Experts and contributors from across the nation help provide a better understanding of this complex issue and its intersection with housing in rural communities.

FEATURES

Rural Poverty, Before & After the War
by James P. Ziliak, Center for Poverty Research and Department of Economics, University of Kentucky

The 50th anniversary of the War on Poverty has generated scores of articles, books, and radio and television reports. Lost in much of this coverage is the acute hardship facing rural America at the dawn of the 1960s, and the role this played in shaping the nation’s response to poverty.

A Frank Discussion on Persistent Poverty in Rural America

Forgotten or hidden from mainstream America, several rural areas and populations are isolated geographically, lack resources and economic opportunities, and have suffered through decades of disinvestment and double-digit poverty rates. Persistent poverty is most evident within several rural regions and populations, including the Lower Mississippi Delta, the rural Southeast, Central Appalachia, Native American lands, the colonias along the U.S. Mexico border, and migrant and seasonal farmworkers.

Among the most economically depressed areas in the country, addressing social, economic, and housing problems has proved challenging. To help better understand this issue, Rural Voices spoke with five housing experts, each with decades of experice providing housing and working with low-income familes in persistent poverty areas. Their firsthand knowledge presents an unparalleled view into the harsh reality of families and communities grappling with long-term poverty. These experts offer their insights, passion, and commitment to help solve what is often considered an intractable problem.

  • Bill Bynum is the CEO of Hope Enterprise Corporation/Hope Credit Union (HOPE). Bill has worked with HOPE for over 20 years providing banking opportunities to low-income individuals and families in the Mid South.
  • Tom Carew is the Executive Vice President of Membership and Advocacy at the Federation of Appalachian Housing Enterprises (FAHE). Tom has more than 34 years of experience providing affordable housing in Central Appalachia.
  • Ann Cass is the Executive Director of Proyecto Azetca and has over three decades of experience working in the Texas border colonias.
  • Emma “Pinky” Clifford is the Executive Director for the Oglala Sioux Tribe Partnership for Housing (OSTPH). As a tribal member of the Oglala Sioux, Pinky has worked to improve access to safe, affordable housing with OSTPH for the past two decades.
  • Selvin McGahee is the Executive Director of Florida Non-Profit Housing, Inc. and has spent his career working to provide affordable housing in the rural Southeast and farmworker housing.

Decline in Senior Poverty: A Success Story…
by the Housing Assistance Council

One of the biggest successes in reducing poverty has been among older Americans.

…With a Cautionary Outlook
by Kim Datwyler, Executive Director, Neighborhood Nonprofit Housing Corporation (NNHC)

Staying Housed on a Fixed Income: The Importance of Available Affordable Housing for Seniors

From a Spare Bedroom to a Home of Her Own
by Stacey Howard, Dream$avers IDA Program Director, NeighborWorks Umpqua

A Single Mother’s Struggle Out of Poverty to Provide a Better Life for Her Son

Innovative Approaches to Reducing Poverty Locally

The problem of poverty is often viewed from a national or regional perspective. But success in moving people out of poverty can emanate from community-specific innovation and solutions.

  • Job Skills through Housing Development – Motivation, Education, Training, Inc. (Texas)
  • Combating Poverty in Puerto Rico with Job Training & Economic Development – Pathstone (Puerto Rico)
  • IDAs Help Low-Income Families Save for Increased Opportunities in Rural Oregon – NeighborWorks Umpqua (Oregon)

A VIEW FROM WASHINGTON

“The People Left Behind” Are Today the People Still Behind
by Joe Belden and Lance George

Additional Content

rv-se-infographic-piraPoverty in Rural America

Approximately 45 million Americans, or 15 percent of the population, had incomes below the official poverty rate in 2012. In rural America, the poverty rate is above 17 percent with more than 10 million people living in poverty.

Rural Voices would like to hear what you have to say about one, or all, of these issues. Please feel free to comment on this story by sending a tweet to #RuralVoicesMag, discuss on the Rural Affordable Housing Group on LinkedIn, or on our Facebook page.

Self-Help, Sweat Equity, and Success

“I’m looking forward to spending whatever days I have, God bless me, in that house.”
– Kay Panteah, Zuni Tribal Member & Homebuyer

by BC Echohawk, National American Indian Housing Council (NAIHC)

Rural Voices - Fall 2014This story appears in the Fall 2014 issue of Rural VoicesThe Zuni Pueblo sits in the far western edge of New Mexico, forty miles away from Interstate 40, the major East-West corridor through the state. Kay Panteah is a tribal member and has lived in the area her whole life. The remote location has never factored into the 54-year old’s decision to remain in the community. Her parents were born and raised there, and she continued to live and care for her aging mother in the family home along with several siblings until their growing families created a need to find a place of her own. When the Pueblo of Zuni Housing Authority advised the single-mother of four that she had qualified for a rental home through their program, she never dreamed that that move would lead to owning her own home.

Kay Panteah speaks excitedly from the offices of the Pueblo of Zuni Housing Authority (ZHA) as she joins their Mortgage Coordinator Lorelei Sanchez to discuss her journey from renter to homebuyer. Given this opportunity to share the success of programs aimed specifically at Indians in rural communities, she’s eager to tell her story. Lorelei stands by, ready to fill in program information or nudge her memory as it becomes clear that these two women have created a strong bond in what has been a 14-year quest for stability and self-sufficiency.

“I LIVE FOR MY KIDS”

Kay describes her family: Oldest son Kardie Panteah is 36, and with his wife, has four children of his own, two adopted. He lives and works in the Pueblo of Zuni as a firefighter and EMT. Having mentioned an older daughter, Kay clarifies, without hesitation or judgment, that 26-year old Danii Panteah is transgender and her “special child.” Danii pursued post-secondary education in psychology and is currently working as a retail salesclerk. Twenty-three year old daughter Kimberly Kallestewa received a certification in Business Administration through Job Corps after finishing high school. She is looking for a job and expecting a child this fall. Kay’s youngest son, Jordan, 17, is finishing his senior year at Ramah High School near the Zuni Pueblo. They have all been high achievers academically, and were all chosen to participate in the local Boys’ State, a national program (with a girls affiliate program) of the American Legion that teaches high school students about how local, state and national government works. “I live for my kids,” says Kay. “So, what I do is practically just for them.”

USDA Rural Housing Service Administrator Tony Hernandez visits with the Panteahs USDA Rural Housing Service Administrator Tony Hernandez visits with the Panteahs

It was this desire to provide a better home for her children that introduced her to affordable housing. A self-employed silversmith and retail salesclerk, Kay’s father died when she was only twelve. Her mother raised her and her siblings alone, and Kay never felt a need to leave the familiar community. She participates in the local traditional tribal and religious activities, and loves helping other families who also take part. However, she admits that times have changed, and safety has become a concern. Doors that once remained opened are now routinely locked. Young people with too much time on their hands and not enough to do roam the community well into the night. Security has stepped up and curfews have been enforced in the past few years. While these measures have helped, the community continues to change as outside media and values become more accessible and common.

In a situation not uncommon in Indian communities, Kay was living with her mother and some of her six siblings in the four-bedroom family home. She had been her mother’s primary caregiver, but as her older brother and sister’s families grew, she knew she would have to make a change. She applied to ZHA for a rental home, and in 2000 learned that she qualified for low-rental housing through them. “[T]he saddest thing was that I had to leave my mom.” says Kay. The rental home was eight miles away from her mother’s home, and she had never lived that far away. However, Kay’s children were all still living with her at this time, and knowing that the move would offer them more room made the change easier.

“I WISH I COULD…BUY A HOME”

In 2000, Kay moved with her four children into a four-bedroom home provided by ZHA. In addition to houses, ZHA also has apartment communities available to qualified low and moderate income renters. Kay was in this first house until 2010 when she moved to an adjacent home to allow for renovations to the housing authority’s inventory. During her time in the rental unit, due to some delinquency issues, it was recommended that Kay attend a financial literacy program that ZHA sponsored. This is where she met Lorelei Sanchez, ZHA’s Mortgage Coordinator and the instructor for their financial literacy classes. The women’s admiration for each other is evident as Lorelei explains that program, their meeting, and how Kay made such an impression on her, that retelling Kay’s story would lead to the Zuni program receiving the first American Indian-focused Self-Help program through the U.S. Department of Agriculture’s (USDA) Rural Development agency.

In explaining the financial literacy program, Lorelei notes the diverse people who attend those sessions, including renters, first-time homebuyers and members of the Zuni community whose goal is to create sound financial habits for their families. Spending and budgeting is discussed keeping in mind the reality of commitments to the traditional calendar that tribal members follow. Their year begins with the winter solstice and related celebrations. This, merged with the western calendar of holidays, can strain budgets, and attendees are taught how to prioritize and set goals and limits for their families. It was while discussing such goals, that Kay made clear her wish to own a home. The sincerity of this wish was not lost on Lorelei.

Given this opportunity to share the success of programs aimed specifically at Indians in rural communities, [Kay Panteah] is eager to tell her story

In 2011, the New Mexico Mortgage Finance Authority (NMMFA) was approached by USDA’s Rural Development program. They wanted a recommendation of a native community that might be in a position to utilize their Self-Help program. Eric Schmieder with NMMFA knew that Zuni was preparing to start a construction project and that they also had the capacity and resources needed to successfully qualify for the Self-Help funding. After Rural Development contacted the Zuni, and it was decided the housing authority would administer the program, ZHA director Michael Chavez tapped Lorelei to write the proposal. She still remembers her hesitation, as this was her first attempt at preparing a proposal. The Little Dixie Community Action Agency provided her technical assistance, however, and they recommended that Lorelei think of a client whose story she could tell. “[Kay] came to my mind just like that.” says Lorelei. Sharing Kay’s story became an important part of ZHA receiving their funding, and Lorelei admits she was amazed that they received the grant. In retelling the story she asks rhetorically, “And guess where I go knocking?” “My door,” Kay answers, and quietly repeats “My door. That was the happiest day of my life.”

“THE HOME I BUILT”

The agreement between Rural Development and the Pueblo of Zuni Housing Authority was signed in January, 2012. Lorelei helped Kay through the pre-qualification process for her new home, and the results came back positive with just a few outstanding debts. As luck would have it, the timing was in Kay’s favor, as it was tax season. Normally, she would have used her tax return for a belated Christmas for her children. This year, though, Lorelei spoke with Kay’s children and suggested they let their mother know that having a new home would be a better Christmas present. They did, and Kay agreed. Kay used that year’s refund to clear those debts, thereby allowing her to move forward with construction.

Kay Panteah and family working on homeKay Panteah and family working on home

The groundbreaking was in May 2012, what was intended to be an eight-month process took over a year to see completion. Three houses were planned in the first round of construction, with each of them to be occupied by single mothers with families who were all former renters turned homeowners. Lorelei explains that as this was a new project for ZHA, there was a learning curve they worked through that caused some delays. Additionally, as can happen when working with construction in any federally-recognized Indian community, there were leasing issues related to building on tribal land that created obstacles. This issue caused a several-month delay in building. As soon as she was allowed, however, Kay was at the work site with her family, putting in the 600 hour sweat-equity requirement on her home. While technical work such as plumbing and electricity was contracted, the remaining tasks of framing, pouring concrete, digging trenches and putting up drywall are left to the homeowner. A construction supervisor was always at one of the three construction sites, providing training and direction to the families.

The process has empowered her, and she knows the other two participants feel the same

Kay had already gotten the commitment of her children and older grandchildren that they would help with the construction, but it was still an arduous process. They worked most days, despite the weather, and despite the fact that they lived ten miles away from their new home and sometimes didn’t have gas to make it to the site. On these days, they informed the construction supervisor so that he could go to another site and assist there. Following days that they missed, they would come to the site and work longer hours to make up for lost time. The other two families who were also working on homes helped her when they could, as she helped them when needed. Once the frame was up, however, Kay knew she would finish. It was then that she could “see” her completed home.

A low-point came when Kay was laid off from her retail job. In fact, all three of the women who were participating in the program were laid off in a short time span. Fearing this would affect her participation in the program, Kay went immediately to Lorelei to let her know. While this was discouraging news for all three women, Lorelei knew they had to move forward and encouraged Kay to begin the unemployment process immediately. She did, and in doing so was motivated to press on. Fortunately for Kay, she had the traditional skill of silversmithing to fall back on. She acknowledges that having completed the physical aspect of the project and overcoming all the obstacles that delayed construction, she has gained experience in how to properly finish a project of any kind; how planning and flexibility allow one to move forward. The process has empowered her, and she knows the other two participants feel the same way. Their work together has bonded them and created lasting friendships.

“MY NEW HOME”

In her position with the housing authority, Lorelei is able to see the bigger picture: success with the Self-Help program at Zuni will show the USDA that tribal communities can also manage the program and it will allow for more housing resources in Indian Country. For her first three participants, however, the benefits will be immediate and personal. The project came in under budget, so Kay’s mortgage payment will be lower than anticipated. Renters will be home owners, rent payments are now mortgage payments and reliance becomes self-sufficiency. Lorelei knows that Kay’s journey to home ownership began with the Financial Literacy class. Her rent payment had never been her priority, but after completing the class, Kay knew what she needed to do to realize the wish of owning her own home. The class gave her perspective and hope. It laid the foundation that allowed her to see what she could achieve.

As for Kay, on July 24 she received the keys to her new home. She admits it was an emotional process with ups and downs, but she also acknowledges that there were always people there who were willing to help and who did help. She remains grateful for the opportunity to participate in the project, and having built a home, she now looks forward to starting a small business in her community. “Never give up,” says Kay. “There’s always hope on the other side.”

The National American Indian Housing Council (NAIHC): The only national, 501(c)(3) corporation representing housing interests of Native people who reside in Indian communities, Alaska Native Villages, and on native Hawaiian Home Lands. NAIHC advocates for housing opportunities and increased funding for Native Americans; provides training and technical assistance to managers and professionals from Native housing programs; and conducts research related to Native housing issues and counseling programs, as well as loan products.

The Power of Working Together

Three families share their experiences with USDA’s Mutual Self-Help Housing Program

Rural Voices - Fall 2014This story appears in the Fall 2014 issue of Rural Voices

Mutual Self-Help is a USDA Rural Development program administered by community-based nonprofit housing organizations that makes housing affordable through “sweat equity”. Families work together as a group to build approximately 65 percent of their homes. This labor not only acts as the down payment, but can substantially reduce the price of the home. However, it is hard work and it does require commitment. Households work together, with each family contributing a minimum of 35 hours of labor per week for approximately 8 to 12 months. The homes are built simultaneously; no one moves in until all the homes are completed.

Dillan and Lacie; Rebecca; and Anita and Robbie all participated in the Neighborhood Nonprofit Housing Corporation (NNHC) mutual self-help program. Below each family recounts their challenges, successes, and experiences building their own home and helping other families build theirs.

How did you first hear about self-help housing?

Dillan: When attending school, Lacie and I had no thoughts of buying, let alone, building a brand new house. Because I am a student, the idea of securing a home loan was near impossible, until we heard about Neighborhood Nonprofit’s housing program. A family member mentioned to me an advertisement they had seen in the newspaper one day and I just stopped in the office to see what it was about. Ten months later here we are in the final stages of building our beautiful new home. The process was very simple to qualify for the program and the Neighborhood Nonprofit staff was very helpful.

Dillan and Lacie are both originally from Cache Valley, UT and wanted to raise their children there. Lacie is a stay at home mom. Dillan is a returning student at Utah State University and plans to be a teacher.Dillan and Lacie are both originally from Cache Valley, UT and wanted to raise their children there. Lacie is a stay at home mom. Dillan is a returning student at Utah State University and plans to be a teacher.

Rebecca: I had previously heard about Self-Help housing a couple of years before applying, but I did not want to make such a major decision so soon after my husband’s death. I also didn’t see how I would be able to put in the time needed to build as a single mother. It wasn’t until after I tried unsuccessfully to find affordable housing for my family that I decided to throw in my application and see what happened.

Anita: We heard about the Self-Help program from one of my husband’s coworkers. They had built in the nearby town of Nibley, UT. We decided to look into the program after looking for houses to buy became discouraging. We knew that my staying at home with our children would make it difficult to afford one. We were also excited about the opportunity to learn the skills involved with building a house. We are grateful we learned these skills because we feel more prepared to maintain our home.

What was the construction process like?

Anita: During the time we built, life was so busy! I was pregnant when we started, so my husband did most of the work for the first several months. Life was hard but we were excited for the end result. It took our group ten months to finish all our homes. We worked with really great people. Everyone had the same attitude to work on each other’s home like it was their own. This created a positive working environment. I would say the hardest challenge we faced was everyone getting burned out and not working as fast as we had hoped. I was glad to be able to go out and work too. Working together on our home taught us a lot and was a great benefit to us recently when we finished our basement.

Dillan: While the qualification process was simple, the building process has not been quite as simple. Building each home together has been challenging and rewarding at the same time. The families in our group have worked so hard together and have accomplished so much. The program has not been easy, but it has been worth it. I believe that each family will leave the program with a greater sense of community and friendship because of the hard work that everyone has endured.

Rebecca: My youngest was only three when I started building! Since my oldest was just 12, I was the only one in our family that was able to work on the homes. To be honest, it was a difficult process for me to build; besides having five children and no spouse, I am a student at Utah State University. A typical day would start at 4:30 a.m. I had to get up that early to get everything ready for the day, including dropping off my children at school and getting myself to class. After school was out, I would have to rush to pick up my children and take them to a baby sitter (none of them were old enough to be on the site) and then get myself to the work site. I usually wouldn’t get home until after 10:00pm. I still had to put kids to bed, take a shower (get all the sawdust and grime off that I’m allergic to), and do regular household chores.

Rebecca is a widow with five children ages 16, 15, 12, 10, and 7, and is currently a student at Utah State University pursuing a degree in Social Work.Rebecca is a widow with five children ages 16, 15, 12, 10, and 7, and is currently a student at Utah State University pursuing a degree in Social Work.

What were your living conditions before and after your participation in the self-help program?

Rebecca: Before [the Self-Help program] we had been living in a three-bedroom apartment for about two years. It was definitely cramped; my two daughters shared one bedroom, and my three sons shared another bedroom. We all needed some personal space. In addition, the apartment would flood occasionally, so it had mold and mildew issues and smelled terrible. It was also where we were living when I lost my husband and the children lost their dad. That apartment created some difficult memories for us. It was really healthy, both physically and emotionally, for us to get out of that environment. Every day, I count my blessings – I have a house, a yard, and good neighbors. I love the neighborhood! One especially nice benefit to having our home is having a back-yard big enough to grow a garden. I could never afford to buy fresh produce for my family. Now, we eat fresh food that we’ve grown ourselves!

Anita: Before we built our house, we lived in a townhouse. The community was nice but the main thing that was missing was a private backyard. One of my favorite features of the program was being able to move in having our landscape and fences included in the building process. I love being able to send my own kids out to have fun in our large fenced-in area. One other major unexpected benefit to having a fenced-in backyard was that it helped my preschool business. My city requires all new preschools to have a fenced-in backyard. This could have been an expensive hurdle but thanks to the Self-Help specifications, this was included.

Gerber-family-cropped-webAnita and her husband Robbie have three children all under the age of six. Anita is a stay at home mom who started her own preschool business. Robbie is a conference coordinator for Utah State University.

Dillan: Before the Self-Help program and as students with a large family, our housing conditions have been, at times, hard to deal with. Now that we are able to have a home to call our own it has given our family and especially our children a place to feel comfortable and more importantly a place to stay for a long time. We now have a “Room with a View,” a place to grow together and create lasting memories.

What specific successes or challenges did you experience?

Dillan: A challenge we faced in our group was learning to work together on a home that wasn’t your own. The workmanship as well as the attitude of all the families involved improved once everyone truly figured out that no one could move in to their own homes before the other houses were completed. No work was completed without the thought of “If it was my home, would I do it like that?” When this concept was grasped, the work excelled in speed and accuracy. Although this and other things were challenges, the successes far exceeded them. A friendship has been made between the families as we worked hard together.

Rebecca: It took a lot of determination to get my weekly hours in and keep up with my other responsibilities. Because it is easier to meet the time requirements if the family is a two parent household (it’s estimated that both husband and wife can come in together one day a week), I had to go in outside of the group’s regular work hours in order to work my full 35 hours per week. During the building process, I had to have two surgeries on my broken leg. While on crutches, and not allowed on site, I had good people that helped donate hours so I could keep up.

I love the neighborhood. I got to know my neighbors really well while we built – both the good and the bad! We learned to work with everyone’s personalities, and I think we learned the importance of not saying things we would regret later. Now, we have a real sense of taking care of each other. It is like having a built-in Neighborhood Watch Program! I have developed some very good friendships from the time we spent building together.

Anita: We are very grateful to have been able to build our home through the Mutual Self Help process. We learned a lot from our construction supervisor and have a lot of respect for him. He made sure things were done the right way. The process was hard; but worth it because we not only got a beautiful home but gained knowledge and friendships.

My father passed away a couple months into the building process. It was very unexpected and very difficult. Because we had to travel to the funeral, the people in our group told us they would donate any hours we needed to cover our weekly hours. Our group was very generous and kind. We truly appreciated them. We know these families care about us. On the anniversary of our open house, we always have a get-together to celebrate. We love the families we built with!

Neighborhood Nonprofit Housing Corporation (NNHC): A Utah-based nonprofit committed to creating quality affordable housing opportunities in their communities and giving households skills necessary to become self-sufficient. NNHC offers programs such as mutual self-help housing, and housing and foreclosure counseling, and as well as loan products.

Second round of Promise Zone Competition announced

The Obama Administration invites a new round of eligible applicants to apply for a Promise Zone designation. HUD will designate six urban communities and USDA at least one rural and one tribal community as Promise Zones. This initiative targets high-poverty communities for job creation, economic development, and additional special assistance in an effort to drastically improve conditions for communities suffering persistent poverty. Applications are due November 21, 2014 by 5:00 PM EST.

Audience Focused Webcasts

To assist communities with the application process, HUD and USDA are hosting three Promise Zone Initiative Webcasts:

Tribal Webcast
September 29, 2014, Monday
1:00-2:00p.m. EST (please adjust for your local time)

Rural Webcast
September 29, 2014, Monday
3:00-4:00 p.m. EST (please adjust for your local time)

Urban Webcast
October 1, 2014, Wednesday
3:00-4:00 p.m. EST (please adjust for your local time)

More information

Is the Housing Crisis Over? And how did it impact rural America? – Shelia Crowley Responds

For more on this topic, read the July 2014 issue of

Sheila-Crowley-webSheila Crowley, Executive Director, National Low Income Housing Coalition What caused the home foreclosure crisis that came to a head in the fall of 2008 and precipitated the “Great Recession” is hotly debated. Explanations fall along predictably partisan lines. One side cites too much government interference in the marketplace, while the other side sees an unfettered marketplace allowed to run amok.

For more on this topic, read the July 2014 issue of

In 2008 the U.S. economy fell off a cliff. Depending on your perspective it either slipped or was pushed from that precipice by the housing markets. But after six years where are we? How were rural Americans impacted, and are there lingering effects from the crisis? Rural Voices assembled four of the most knowledgeable experts in the affordable housing world to help answer these complex questions and provide insights on how to improve rural housing conditions in the wake of the housing crisis.

Sheila-Crowley-webSheila Crowley, Executive Director, National Low Income Housing Coalition What caused the home foreclosure crisis that came to a head in the fall of 2008 and precipitated the “Great Recession” is hotly debated. Explanations fall along predictably partisan lines. One side cites too much government interference in the marketplace, while the other side sees an unfettered marketplace allowed to run amok.

The undisputed result was that too many people took out home mortgages that they could not afford and too many lenders made loans that they knew the borrowers could not afford. It did not matter to lenders, because they could sell off the loans to the secondary market, take the cash, and move on to the next borrower who confused home buying with a get-rich-quick scheme.

In the name of “wealth-building,” the home buying push that led to the Great Recession will be remembered as a massive transfer of wealth out of low and moderate income African-American and Hispanic communities into the hands of major financial institutions and their investors. Not only has no one in a position of responsibility at these institutions been punished for the devastation of individual lives and whole neighborhoods, but the federal taxpayers bailed out most of these institutions, while providing too little, too late to the people who lost their homes and their assets.

Today, there is much consternation about the “softness” of the home-buying market and constraints on access to credit for potential home-buyers. We should ask ourselves why a low income renter whose neighborhood was blighted, who has not had a raise in years, who has friends and relatives who are still out of work or are underemployed, would believe that buying a house is a good thing to do. Low income people have every reason not to trust anyone who tells them buying a house is good investment. What happened to their homes is fueling mistrust that will stay with foreclosed families for at least a generation.

The conflation of “house” with “asset” in the policy and political narrative of the 1990s and 2000s led us lose sight of the meaning of “home.” Home came be idealized as a single family residential structure that the occupants “owned” by virtue of having borrowed money from a bank that is to paid off with interest in 30 years. Home as sanctuary and the center for family life became a secondary meaning and renting was relegated to a second class form of tenure. The federal government subsidizes home-owners through its support of the mortgage market, through the tax code, and through direct expenditures by HUD and USDA in amounts that dwarf support for renters.

Meanwhile, through the housing boom and bust and tepid recovery, the rental housing crisis only has gotten worse. The Joint Center on Housing Studies at Harvard University issues its “State of the Nation’s Housingreport each year. The 2000 report cited 5.4 million very low income1 renter households who received no housing assistance paying over half of their income for housing and/or living in substandard housing.2 The 2014 report shows that two-thirds of renter households with incomes less than $15,000 a year spend more than half of their income for housing, as do 34% of renters with household income between $15,000 and $29,999.3

Analysis of 2012 American Housing Survey data by the National Low Income Housing Coalition (NLIHC) shows there are 10.16 million extremely low income

Redland - Tom Caswell - Creative Commons

The rental housing shortage has been exacerbated by the foreclosure crisis, as former homeowners moved into the rental market and potential homebuyers stayed in the rental market. An already inadequate affordable rental housing market has had to absorb the growing renter demand. In 2013, rental vacancy rates declined again to their lowest level since 2000 and rent increases continued to rise well above inflation.7

A major contributor to the rental housing crisis for very low and extremely low income households is the reduction of federal government support with cuts to HUD and USDA programs. A fiercely divided Congress and a worrisome federal deficit have resulted in severe cuts to all direct spending on low income housing. Both parties refuse to raise revenue to reduce the deficit, much less invest in affordable housing, schools, transportation, infrastructure, or a host of other neglected core social needs.

In the name of “wealth-building,” the home buying push that led to the Great Recession will be remembered as a massive transfer of wealth out of low and moderate income African-American and Hispanic communities into the hands of major financial institutions and their investors.

Why is rental housing a good investment? First, over one third of all American households are renters and virtually everyone is a renter at some point in his or her life. Second, renting makes the most sense for people who expect to live somewhere for less than a few years, because the transaction costs of buying and selling will likely exceed any equity they might accrue. Renting also makes more sense than buying for people whose employment has any uncertainty to it, like variable hours or the potential of lay-offs. Responding to reduced economic circumstances is much easier with a lease than a mortgage. Third, people at different stages of the life cycle may be better off renting than owning, especially if they are not in a position to maintain a house. People whose jobs require a lot of travel or older people may be happy without the bother of yard work or roof repairs. Certainly many people prefer the freedom and flexibility that renting offers.

Most importantly, extremely low income and many very low income families would be better served by strong rental housing market that offer them choices of where to live than they are by an array of inadequate, under-resourced, and outdated programs or being prematurely thrust into the mortgage market.

The most fundamental goal of housing policy should be housing security, which is what the 1949 U.S. Housing Act prescribed: a decent home and a suitable living environment for every American family. Housing security means paying what you can afford to live in a home that is adequate for your needs and from which you move only by your own choice. Housing security means not living in fear of eviction or exploitation or violence or hazards to your health. Housing security means also being able to afford healthy food, appropriate medical care, transportation to get where you need to go, and other necessities, with enough left over to be able to save for emergencies, education, retirement, and maybe even a down payment on a house. Housing security as a renter is a necessary precursor to borrowing to buy a house.

Recovery from the foreclosure crisis will take a long time; people need to heal from the trauma and reestablish trust with the institutions that failed them. Public policy should focus on getting back to basics. Does every community have enough housing that all the people who live there can afford? Or enough housing so that no child in its schools is homeless or churning from one home to another and one school to another? Or enough housing to assure that its elders live out their years with dignity? Or enough housing that its citizens with disabilities can lead productive lives?

The problem is not a lack of resources. The federal government will subsidize home-ownership through the tax code to the tune of $241 billion in 2015. These tax “expenditures” are the mortgage interest deduction, the property tax deduction, the capital gains exclusion, and the net imputed rent exclusion.8 NLIHC has proposed modest changes to the mortgage interest deduction9 that would not only raise enough revenue to solve the rental housing shortage, but will give a tax break to many more low income homeowners than claim the mortgage interest deduction now. NLIHC’s proposal will not cost the federal government any more than it already spends on housing and it will make the tax code fairer and simpler.

The solution to the rental housing crisis is in plain view. Modest adjustments to the mortgage interest deduction will raise enough revenue to fund rental housing programs for ELI households. All it takes is bipartisan political will, which unfortunately is in short supply.


1 Very low income is 50% of the area median or less.

2 Joint Center for Housing Studies. (2000). The State of the Nation’s Housing. Cambridge, MA: Harvard University.

4 Extremely low income is 30% of area median or less.

5 The general accepted standard of housing affordability is no more than 30% of household income.

9 Learn more about NLIHC’s proposal at https://nlihc.org/unitedforhomes

Is the Housing Crisis Over? And how did it impact rural America? – Eric Belsky Responds

For more on this topic, read the July 2014 issue of

Eric Belsky, Director, The Joint Center for Housing Studies at Harvard UniversityEric Belsky, Managing Director, The Joint Center for Housing Studies at Harvard University

Do you believe that the housing crisis is over?

I think we have turned a corner in many places. Housing prices have started to move up again. Housing starts for both single family and multi-family are picking up. Home sales are also increasing. From a broad perspective, many markets are starting to head higher.

For more on this topic, read the July 2014 issue of .

In 2008 the U.S. economy fell off a cliff. Depending on your perspective it either slipped or was pushed from that precipice by the housing markets. But after six years where are we? How were rural Americans impacted, and are there lingering effects from the crisis? Rural Voices assembled four of the most knowledgeable experts in the affordable housing world to help answer these complex questions and provide insights on how to improve rural housing conditions in the wake of the housing crisis.

Eric Belsky, Director, The Joint Center for Housing Studies at Harvard UniversityEric Belsky, Managing Director, The Joint Center for Housing Studies at Harvard University

Do you believe that the housing crisis is over?

I think we have turned a corner in many places. Housing prices have started to move up again. Housing starts for both single family and multi-family are picking up. Home sales are also increasing. From a broad perspective, many markets are starting to head higher.

Some places continue to struggle to recover from such a significant downturn. Employment levels in these areas have not returned to the previous peak. There are still places with abandoned and vacant units as a result of foreclosure problems. For these areas, it is harder to get capital flowing again.

What factors defined the “housing crisis?”

Housing markets had enormous amounts of stress placed on them. This is partly due to the lending craze that resulted in many people buying homes that they could not afford. The bigger issue was the larger financial crisis and how that affected the broader economy. Many people became unemployed because of job losses that occurred in 2007 and 2008. They could not pay their mortgages or rents. Not everyone lost their job, many people found their hours curtailed. Some people replaced lost full time work with a part-time job. So, you had reductions in people’s incomes. All of those things created enormous stress on the housing market after a period of time where low interest rates and the availability of credit were driving up property values.

How, was the housing crisis different for rural areas than the nation as a whole?

Rural home prices did not rise as much as they did in the suburbs or in urban areas. The drop in rural home prices was also less severe but it was still significant. Even so, rural areas did experience a strong house price cycle and prices remain well below the previous peak.

Parts of rural America have been struggling with chronic employment issues for a really long time. Add on to that a fall-off in construction, which is a very local activity, and the result is more damage in places that are already struggling.

The hole created by all of this fall-out tends to be cumulative. Consumer spending fell. Savings rates went up. People were feeling that they had better spend less and borrow less. Those things translated into job losses across the country.

New construction jobs are starting to appear in some rural areas located on the edges of metropolitan areas. Although these jobs are not actually in rural areas, they are close enough for commuting. Resource extraction, for example fracking, makes a place look very different. The classic case was North Dakota. If the whole country experienced the job growth over the last six years, as did North Dakota, which is mostly a rural state, we would have had a strongly growing national economy.

Houses - Matthew - jargon777 - Creative CommonsHouses – Matthew – jargon777 – Creative Commons

What are some of the indirect or secondary impacts of the housing crisis?

Well established literature shows that people’s spending behaviors are influenced by their perceived wealth. When people think the values in their homes are higher, they are more likely to spend more freely than if the value of their home has gone down. When they do not have the cash to spend, they will borrow in order to do it. Many people refinanced their mortgages during the 2004-2006 period and they took cash out of their home equity in record amounts.

Today, it is very hard to get a loan against the equity in your home and a lot of people do not have equity in their home. This is starting to improve but it certainly is not completely in the rear view mirror. Job losses and employment continue to be a drag on many local economies.

There are both direct and indirect effects of the falloff in construction activity. Construction workers spend their wages in the local economies; they support the local stores and their local movie theater.

Were the various federal responses to the housing crisis effective? If so, how?

Certainly one of the most important aspects of the federal response is the very strenuous effort by the Federal Reserve to drive down long term interest rates.

When you look at some of the more specific tailored programs intended to address the housing crisis, I would say that both HARP and HAMP helped. Millions of borrowers were reached by these programs.

Some people, who otherwise might not have been able to, were able to reduce their mortgage payments because of HARP. The HAMP program has not affected as many homeowners, The Neighborhood Stabilization Program (NSP) was undersized relative to the extent of the need.

Certainly one of the most important aspects of the Federal response is the very strenuous effort by the Federal Reserve to drive down long-term interest rates.

What are the long term ramifications for affordable housing?

If the economy continues to improve, which it does look like it will, house prices will also recover. This will restore people’s home equity, their ability to borrow, and their ability to spend. Some of the drag from government cuts is starting to abate and the economy seems to have forward momentum.

The housing market is very closely related to the broader economy. If the broader economy is doing better I would expect housing to get back on the road to recovery.

Higher interest rates have the potential contain the recovery on the homeownership side. In addition, credit standards still quite tight but they are getting a little less so.

Rental markets have been strong. Because of rental construction coming back and because many of the single family homes previously lost to foreclosures are coming back on the market for rent, you should see some moderation of rent increases.

The hardest thing to project is on the “for sale” side. What we are seeing is very unusual. There is a very low level of inventory of homes on the market. for sale Even though you see softness in sales, house prices are going up. The number of homes for sale is starting to creep back up which suggests moderation in house prices. This could help maintain the recovery but higher prices and rising interest rates will diminish affordability.

Is the Housing Crisis Over? And how did it impact rural America? – Gail Burks Responds

For more on this topic, read the July 2014 issue of

gail-burks-webGail Burks, President & CEO, The Nevada Fair Housing Center, Inc.

Do you believe that the housing crisis is over?

As I contemplated this question, my mind wandered to a quote given to Supreme Court Justice Potter Stewart by his law clerk in an effort to define obscenity – “you’ll know it when you see it”. In rural America, no other quote could so aptly describe the housing scene. From an evidence based perspective, three continuing themes support the premise that we have not seen a recovery. First, to date, proposed solutions have not been tied to real time field data from rural areas of the country. Rent a vehicle and drive in any direction and you will know rural America when you see it, along with the attendant housing problems…

For more on this topic, read the July 2014 issue of .

In 2008 the U.S. economy fell off a cliff. Depending on your perspective it either slipped or was pushed from that precipice by the housing markets. But after six years where are we? How were rural Americans impacted, and are there lingering effects from the crisis? Rural Voices assembled four of the most knowledgeable experts in the affordable housing world to help answer these complex questions and provide insights on how to improve rural housing conditions in the wake of the housing crisis.

gail-burks-webGail Burks, President & CEO, The Nevada Fair Housing Center, Inc.

Do you believe that the housing crisis is over?

As I contemplated this question, my mind wandered to a quote given to Supreme Court Justice Potter Stewart by his law clerk in an effort to define obscenity – “you’ll know it when you see it”. In rural America, no other quote could so aptly describe the housing scene. From an evidence based perspective, three continuing themes support the premise that we have not seen a recovery. First, to date, proposed solutions have not been tied to real time field data from rural areas of the country. Rent a vehicle and drive in any direction and you will know rural America when you see it, along with the attendant housing problems. Second, the design of programs such as the Neighborhood Stabilization Program (NSP) did not contemplate rural development issues such as the additional due diligence required on wells, open range, etc. Third, the foreclosure numbers are a consistent moving target. Depending on the state, defaults are not necessarily finalized within a set timeframe. The rule of law within the local community may extend, sometimes for years, the actual trustees’ sale. When obtaining data on foreclosure, it’s important to define the parameters. Until we can clearly identify the problem based on reality, solutions will continue to be illusive at best.

What factors defined the “housing crisis?”

Depending on which day and commentator you listen to it is the fault of the homeowner, bank or society in general. They all got it wrong. Nothing in society rises or falls based on one thing. In our sworn testimony for the Congressional body known as the Federal Financial Crisis Inquiry Commission, we highlighted how various factors converged simultaneously to create the current market in our state or on a broader scale.

It is also important to note that the housing crisis must be viewed within the context of the greater economy in both the U.S and abroad.

Nevada consumers initially complained about predatory lending practices in 1999. By 2001, the Nevada Fair Housing Center, Inc. began to see an average of over four hundred clients per month with predatory lending issues. Clients presented cases that included such loan practices as appraisal fraud, flipping, high interest rate loan products, excessive prepayment penalties and violations of Federal law in the servicing of these loans.

No one can debate the need for legitimate non-prime (subprime) lending products. The subprime market served individuals with little or no credit, along with those recovering from a financial setback.

Until we can clearly identify the problem based on reality, solutions will continue to be illusive at best.

Traditional equity enhancements allowed a non-prime borrower to obtain credit. These often included verification of non-traditional credit (i.e. rental payments, utility bills, etc.), proof of one month’s reserve, establishment of an impound account and private mortgage insurance (PMI.) While the non-prime borrower might pay more for the cost of credit, that cost was directly related to lender risk.

However from approximately 2004 – 2007, the purpose and role of non-prime became lost in the zest to create profit driven securitized products. Non-prime mortgages mutated into fantasy financing. Out of this mutation grew a new breed of mortgage product, fueled by:

  • No underwriting
  • Lender failure to determine the ability to repay the loan
  • Failure to fully amortize the payment
  • Failure to establish impounds for insurance and property taxes

Many consumers received loan products that were not suitable based on their credit and income. When payments on “option” adjustable rate mortgages (ARMs) and pick-a-payment mortgages began to adjust, many consumers experienced payment shock.

No document loans also fueled the crisis. Traditionally, this standard product was only offered to self employed individuals with twenty percent down. However, brokers began offering the product to consumers on fixed incomes such as seniors and working families.

This crisis was further fueled by the joining of strange bed fellows. Providers of services- brokers, correspondent lenders, title companies, appraisers, real estate agents- formed alliances to make money. Sadly, some consumers sought to grab the brass ring and become ‘investors’ and share in the new get rich craze.

How, was the housing crisis different for rural areas than the nation as a whole?

Rural America experienced a crisis. In part, the financial meltdown contributed to a decrease in the ability to develop and leverage housing. Not only did consumers in rural America experience foreclosures but the development side was also impacted.

Mississippi County Home - Jimmy Smith - Creative CommonsMississippi County Home – Jimmy Smith – Creative Commons

What are the long term ramifications for affordable housing?

No. As previously stated, the design of programs such as NSP did not contemplate the additional due diligence required for rural properties. In addition, foreclosure numbers are a consistent moving target. Until we can clearly identify the problem based on reality, solutions will continue to be illusive at best.

The guidelines for HARP failed to take into account the local real estate markets (all real estate is local) and the refinance rules that were in place with Fannie and Freddie due to receivership. In other words, if some markets were so upside down from an equity standpoint, refinancing was obviously not an option. Public trust is very important. Press announcements about programs that were not practical for the market caused many consumers to lose hope.

The goal of the HAMP program was admirable. However, execution was inconsistent. Consumers received various degrees of assistance. The common denominator with all the programs, lender participation, was voluntary. The consistent loss of paperwork by lenders, inability to reach lender staff, lack of coordination between lender departments, made the program difficult. Lenders do not do “one offs”; therefore, their goal was to incorporate the program into the lender’s automated systems. This took years. Moreover, from a legal standpoint, many lenders could not make the final decision absent investor sign off. Marketing indicated that all lenders utilized the same process. In reality, this was not the case. Later in the program, an effort at centralization to send consumers through one computer system hurt past efforts. Due to various lender pools, investors, and legal pooling service agreements for mortgage backed securities, the marketing of assistance did not match the reality. Despite the good field work again, consumers lost faith in the system.

As consumers lost faith in various announced programs, the rise in strategic defaults increased. The attitude of “why pay for something that is worth less” seemed to overshadow the idea of contract obligations.

In Nevada, the passage of legislation to create a mediation program actually encouraged lenders to work with consumers more than all the federal programs. Similarly, litigation in some areas provided relief.

What are the long term ramifications for affordable housing?

Sometimes old methods work best. As a product of rural America, many programs have disadvantaged communities in providing a false sense of security. The long term ramifications are a stunted growth in outlying areas

Today, the housing crisis is defined by different factors

For more on this topic, read the July 2014 issue of

chuck-wehrwein-webChuck Wehrwein, Acting President & CEO, NeighborWorks America

Do you believe that the housing crisis is over?

While it is true that there are a lot of signs of recovery for the nation as a whole, the housing crisis is not over in many communities around the country. Many of the communities that we work in are still dealing with a backlog of vacant and abandoned properties.

For more on this topic, read the July 2014 issue of .

In 2008 the U.S. economy fell off a cliff. Depending on your perspective it either slipped or was pushed from that precipice by the housing markets. But after six years where are we? How were rural Americans impacted, and are there lingering effects from the crisis? Rural Voices assembled four of the most knowledgeable experts in the affordable housing world to help answer these complex questions and provide insights on how to improve rural housing conditions in the wake of the housing crisis.

chuck-wehrwein-webChuck Wehrwein, Acting President & CEO, NeighborWorks America

Do you believe that the housing crisis is over?

While it is true that there are a lot of signs of recovery for the nation as a whole, the housing crisis is not over in many communities around the country. Many of the communities that we work in are still dealing with a backlog of vacant and abandoned properties.

Particularly feeling the brunt are families who are still under water on their mortgages and younger people who are unable to buy their first home because that can’t qualify for a loan or can’t find an affordable house – often due to crushing student debt.

To put it in perspective, in April there were 46,000 completed foreclosures, according to CoreLogic. That represents a significant decline year over year, and foreclosures have been falling for two and a half years. But, it is also important to note that the monthly number of completed foreclosures is still almost double what it was in the average pre-crisis month between 2000 and 2006. The Urban Institute estimates that, mostly because of tight credit, as many as 1.2 million loans that would have been made in 2001 are “missing” from today’s market.

And let’s not forget the families who can’t even afford to think about buying, yet are paying more than 50 percent of their incomes on rent or are homeless.

All of that points to a housing crisis that is not over yet.

What factors defined the “housing crisis?”

Five or six years ago, the “housing crisis” that was in the news every day was defined by foreclosures. People were losing their homes to foreclosure at a truly alarming pace.

Today, the housing crisis is defined by different factors. One is the lack of affordable rental housing, another is housing affordability, a third is tight lending standards, and a fourth is home values that is still leaving many borrowers underwater.

Of course, there other severe housing challenges that are much more long-standing, particularly in rural areas. These include a general lack of affordable housing and, historically, widespread poor housing conditions.

How, was the housing crisis different for rural areas than the nation as a whole?

Most rural areas didn’t see the wild price fluctuations that we saw in urban and suburban areas during the boom and bust years. So, while families lost value in their homes, they probably didn’t lose as much equity as urban and suburban residents.

But that is not to say that the housing crisis—and the foreclosure crisis—didn’t impact rural areas. There certainly was—and is—a housing crisis in rural areas – although it hasn’t been as well covered by the media. NeighborWorks has seen firsthand through our administration of the Foreclosure Mitigation Counseling (NFMC) program the impact of foreclosures in rural areas and the need for education and counseling. Through July 2013, almost 180,000 families in rural areas had received foreclosure counseling through NFMC.

Five or six years ago, the “housing crisis” that was in the news every day was defined by foreclosures. People were losing their homes to foreclosure at a truly alarming pace. Today, the housing crisis is defined by different factors.

What are some of the indirect or secondary impacts of the housing crisis?

At NeighborWorks America, we definitely see some of the impacts of the housing crisis on NeighborWorks organizations and the residents they serve, including those in rural areas. The decrease in government funding for housing—both from UDSA and HUD—has meant they are able to develop fewer new rental housing units, and that they are concerned about finding the resources to preserve existing units.
Homeownership has also been impacted. NeighborWorks organizations tell us anecdotally that it is harder for their customers to get mortgage loans due to tightened lending standards.
The Center on American Progress reported recently that nearly half of all mortgages made today go to borrowers with credit scores of more than 750, compared to 2001, when more than two-thirds of mortgages went to borrowers with scores lower than 750. That means more customers are looking to FHA and USDA loans for help. In addition, some of our organizations say the consolidation of USDA offices are leading to longer processing times for mortgage loans issued by the agency – a mainstay in rural communities. NeighborWorks organizations who have CDFIs are working hard to fill in the gaps in the mortgage market.

Empty - Ruin RaiderPhoto: Empty – Ruin Raider – Creative Commons

What are the long term ramifications for affordable housing?

Let me start by saying that it is our experience at NeighborWorks that nonprofit community development organizations serving rural areas are some of the most creative groups out there. I am very confident they will continue to go a long way toward serving the housing needs of their rural communities.

However, there still are many people in rural areas who are in need decent, affordable housing. Additional resources are needed to expand opportunities on a broader scale, and given the current funding environment, that will be very challenging.

But there is always a silver lining. The quality and energy efficiency of new manufactured housing have improved greatly and this type of construction could help serve some of the unmet needs if ramped up. Some states and organizations are working to improve the energy efficiency by doing replacements of older manufactured homes as well. And we have seen in the NeighborWorks network and through ROC USA, the value that resident-owned manufactured housing communities bring to residents and to communities. It is my hope that the challenging funding environment will lead local policy makers to, for example, reconsider their ownership laws for manufactured housing, and lenders to find new ways to finance them.

Is the Housing Crisis Over? And how did it impact rural America?

Download a pdf version of Rural Voices
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The July 2014 issue of Rural Voices takes another look at the housing crisis and asks some important questions. Knowledgeable experts in the affordable housing field share their expertise, insights, and strategies to improve housing conditions in light of the Great Recession.

VIEW FROM WASHINGTON

Discussing Community Reinvestment in Rural America
by Thomas J. Curry, Comptroller of the Currency

How banks and federal savings associations can more effectively serve the credit needs of rural communities

SPECIAL FEATURE

Is the Housing Crisis Over? And how did it impact rural America?
An interview with:

Eric Belsky, Director, Joint Center for Housing Studies at Harvard University
Sheila Crowley, Executive Director, National Low Income Housing Coalition
Gail Burks, President & CEO, Nevada Fair Housing, Center, Inc.
Chuck Wehrwein, Acting President & CEO, NeighborWorks America

Four national leaders discuss the housing crisis and its impact on rural America

FEATURES

Repurposing Foreclosed Properties in Rural America
by Noel Poyo, Executive Director, and Christopher W. Sanchez, Program Director, National Association for Latino Community Asset Builders (NALCAB)

A consortium of nonprofits works at the local level to reverse the devastating effects of the foreclosure crisis

Housing Counseling Services Offer More Than Just Counseling
by Keith L. Morris, President, Elder Law of Michigan

While housing counselors are instrumental in helping people avoid foreclosure, they also provide invaluable resources to help families improve their lives

Making a Difference in Rural America
by Tony Hernandez, Administrator, USDA Rural Housing Service

Newly appointed Rural Housing Service administrator shares his thoughts and priorities for USDA’s housing initiatives

MAPS

the housing crisis and its wake in RURAL AmericaThe housing crisis and its wake in rural America– (Interactive Prezi)

Add your Response

Rural Voices would like to hear what you have to say about one, or all, of these issues. Please feel free to comment on this story by sending a tweet to #RuralVoicesMag, discuss on the Rural Affordable Housing Group on LinkedIn, or on our Facebook page.

Housing Counseling Services Offer More than Just Counseling

While housing counselors are instrumental in helping people avoid foreclosure, they also provide invaluable resources to help families improve their lives

When someone is facing foreclosure, there is usually a credit card collector calling constantly, a family member struggling with an illness, or a heavy stress over where the next meal might be coming from. The problem that the client comes to us about is often caused by another bigger issue that they may be dealing with. This is why a housing counselor does so much more than just housing counseling.

While we have always provided assistance with housing issues through our Legal Hotline for Michigan Seniors, Elder Law of Michigan has been a HUD-approved housing counseling agency since 2011. We decided to expand our programs to become a housing counseling agency so that we could do a better job of helping clients deal with the issues that may be preventing them from owning or renting a home or apartment.

The goal of the housing counseling program is to help clients achieve their goals. In regards to helping with homeownership, these goals could be to downsize to a smaller, more accessible home; own a home for the first time; or become a home owner again after going through challenges that resulted in a foreclosure of a previous home.

A housing counselor works with the client to figure out the alternatives and then allows the client to make an educated decision on how to proceed. This process is customized to each client but includes budget discussions, information on what resources are available, credit repair counseling, education on fair housing rights, and assistance with finding other housing if that is necessary. Housing counselors provide these services in an understanding, non-judgmental way.

We recognize that there are additional challenges faced by our rural clients: limited access to services and fewer housing alternatives.

These services are invaluable to someone struggling with the constant phone calls from the creditor, the overwhelming amount of incorrect information on the internet, and the fear of what to do if the family loses their home.

As a nonprofit that serves clients in suburban cities and rural counties, we recognize that there are additional challenges faced by our rural clients: limited access to services and fewer housing alternatives.

Many rural residents are perfectly fine with the fact that there aren’t many businesses nearby. In fact, that may be one of the reasons why they choose to live in the rural area. With the tight economy, nonprofits have to strategically locate where they can serve the most clients in a cost-effective manner. A large, mostly rural county in our service area has only one housing counseling agency actually located in the county. For residents on the other side of the county, that means almost an hour of travel each way to get assistance with their housing problems.

Another barrier is access to high-speed internet. Out of efficiency, many of the programs that help with foreclosure issues use a website or an online portal. While this works for those who are computer savvy and have a reliable computer with a good internet connection, several of our clients could only access these services with our help.

Making our services available by telephone means that we can try to provide as much assistance as possible without having the client drive a long distance to meet with us. There are still some issues using this method because there is not a nearby place to make copies or fax documents.

For those clients who commute into the larger cities for work, these issues can be addressed with the services available there. However, for our older, retired clients, that is not always so easy. We also discovered that some clients were not able to contact us because our office hours were the same hours that they worked. We had to make evening appointments available.
There are fewer housing options for some rural clients. In an ideal situation, our housing counselors would be able to work with the client and resolve the mortgage issue, allowing the client and their family to remain in the home. However, that is not always the case. In some cases, we have to work with the client to find alternate, affordable housing. Purchasing another home to live in is not an option at that moment due to credit issues. For many clients in this situation, we help them find an apartment that they can afford. For rural clients, rentals are not very plentiful, so relocating to another community is a reality that they must face on top of dealing with the foreclosure.

Because it is hard enough dealing with the housing issue, rural clients should definitely seek out a housing counseling agency to help. Recently, we had a client from a rural county who lost his job and was faced with foreclosure. Our housing counselor worked with him to go over his budget and determined that if he could get caught up, he would be able to afford to make future payments. They worked together by phone and through the mail to get all of his paperwork together. The client came to our office and worked with the counselor to complete an application for assistance through the Hardest Hit Fund program. After waiting several weeks, the client received notice that he was going to receive assistance and could save his home. Now, several months later, he just emailed us to say how thankful he is for the help.

Unfortunately, this is not always the outcome for our clients. Another client, a widow from a very small town in another rural county, contacted one of our other programs because she needed help buying food. After speaking with her, our benefits counselor realized that the client was also facing foreclosure. She gladly agreed to be helped by our housing counseling program. She was the victim of a fraudulent refinance scheme that took her money but never worked with her mortgage lender. Because she was not going to be able to afford the home any longer, our housing counselor worked with the client to find another place to live. After five months, the client was able to move into a subsidized housing complex in a nearby city and even recovered some of her money thanks to the legal help she received from the legal hotline.

After five months, the client was able to move into a subsidized housing complex in a nearby city and even recovered some of her money thanks to the legal help she received from the legal hotline.

Even for clients who are not able to stay in their home, the dream of homeownership is still possible. Housing counseling programs will work with the client who wants to own a home again in the future. Participating in a structured program to help with saving money and possibly rebuild credit is a good way to return to homeownership faster.

Housing counseling programs also can provide information on fair housing laws and discrimination. Whether you are looking to buy a home, take out a mortgage, or rent an apartment, you should know your rights.

Our housing counseling program, along with our other programs, does so much more than just answer questions and give referrals. Like many other housing counseling agencies, we seek to address the problems that led to the housing issue. It is this assistance that our clients find the most helpful. To find a housing counseling agency in your area, visit www.hud.gov or call 800-569-4287.

Keith L. Morris, J.D., M.P.A. is the President of Elder Law of Michigan, a private nonprofit that assists clients with legal counseling, pension counseling, benefits counseling, and housing counseling. Its new Housing Rights Center of Michigan assists clients of all ages and incomes in counties surrounding Lansing, Michigan.