OFFER ENHANCED SERVICES WITH MORTGAGES | Recommendation
By offering enhanced servicing to DPA recipients who fall behind on payments, the City can provide counseling services to help low-income homeowners remain in their properties.
Enhanced servicing is written in as a condition of the DPA loan.
The housing partner reaches out to the DPA recipient and provides foreclosure prevention services.
NDD responds by notifying its current non- profit housing partner.
In the case of a missing or late payment, the mortgage lender alerts NDD.
DPA recipients give permission for their lender to contact NDD.
Financial literacy and counseling services end after homebuyers receive their mortgages. Counseling is particularly limited for “credit -ready clients” who are only required to take HUD’s eight-hour workshop and do not receive personalized, continuous services through the IDA program. This poses a challenge for many first-time homebuyers, who may not be aware of the heightened maintenance obligations they have as homeowners, as opposed to renters. These new homeowners would likely benefit from long-term help as their properties age and the hidden costs of homeownership become challenging. NDD should work to offer enhanced servicing for its DPA program, so if a buyer falls behind on their payments, their mortgage lender would be allowed to notify NDD. NDD would then notify the vendor administering DPA, so the vendor could contact the homeowner to identify issues, provide homeowner support services, and help to prevent foreclosure. Throughout the country, similar programs have been utilized to help new homeowners navigate the full cycle of the lending process. Successful strategies include first year follow-up requirements that provide a designated time for households to meet with housing counselors to proactively discuss any challenges they’ve encountered. This follow-up session is a chance for counselors to advise residents on alternatives to high-risk forms of credit that are newly available to them as homeowners. Given the successful branding of Greensboro’s #100Homes Campaign, the City and its non-profit partners could explore the creation of a Homebuyers Club, which would allow peer DPA recipients to discuss their newfound housing challenges and collaboratively brainstorm solutions in a supportive, cohort-based atmosphere.