October 16, 2019 Meeting with Sofia Crisp, Housing Consultants Group
• Thoughts on declining homeownership: o Part of the issue may be student loan debt in newer homebuyers o Despite all the colleges, there’s not enough activity here for young people —it’s not a Charlotte or a Raleigh — not enough retention of college graduates • A&T is putting together an economic development program in East Greensboro o Engaging school’s marketing majors in the local neighborhoods o This could help with thinking about student retention • What are the other barriers to homeownership for low and moderate-income households? o Credit scores are a huge challenge in the market: factoring in student loan debts and difficult credit histories/financial literacy o Less stable employment/breaks in employment, which leads to medical collection histories on people’s credit reports o Also looking at the student loan debt amongst people who didn’t graduate — this leads to an income difference and similar debt burden, but limited ability to pay if off ▪ EX: CNAs with $20-30k in student debt • Foreclosure crisis hit, and it created a dearth in the affordable housing space that never recovered o Subsidy makes the process take longer o Builders at lower price points left for less risky recession work, and never returned, which leads to a dearth in product • Discussion of City DPA program and NCHFA program: o State money requires use of their first mortgage product. o State DPA provides $8,000, which is forgivable after years 11-15, so longer term commitment. o Then there is 20% down through a state community loan program, which is due when you sell your home (this is a lien) o City DPA provides $10,000 forgivable after 5 years. o Potential for total subsidy of close to $30,000, when you layer in these programs o So, yes there’s a worry about over-subsidy, but we don’ have a ton of inventory, and people want a house now. HCG’s role is to educate and help people make plans about repayment. • Shifting to underwriting process, are the requirements reasonable? o 640 credit score is the magic number — you can have slightly lower and get city’s DPA o They tried to limit the regulations for DPA because it’s just $10k —don’t want to shut down someone who’s already been lent for $150K • Main challenges with lenders are on home inspections and the City’s clear rations o Home inspection: because the inventory is so low, buyers will accept things they wouldn’t accept in a less tight market o Housing-to-Income Ratios: 33 front-end, and 43 back-end o BUT: lender will qualify you on a gross income without transportation/childcare costs, which is unfair. We want people to think about what they can really afford.