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Posts Tagged ‘Northeast Housing Initiative’
Northeast Housing Initiative Interview
November 12th, 2008
One of the reasons we created the blog was to help people network and learn from each other. That’s exactly what I did back in 2003. After hearing about the innovative housing work being done by Northeast Housing Initiative (NEHI) of Nebraska, I gave Linda Kastning, NEHI’s director, a call. In a nutshell, NEHI had created a “purchase, rehab, resell” housing program, and I’d heard it had helped a lot of families get into homes. Linda was extremely gratious with her time and knowledge, and we’ve stayed in periodic contact ever since.
When some questions about rehab housing in rural communities recently emerged, I instantly decided that the best way to answer those questions was to try to connect Linda to a broader audience. What you find below is a short interview with her. I’m sure she’d be willing to answer any questions you have, either on the blog or via the contact information provided below. I’d also encourage people to share other succussful programs that they are aware of.
Please describe what you do at NEHI
NEHI helps people buy their first home through our purchase/rehab/resell program. The buyers find their lender and their house. NEHI purchases the house, assists the buyer in getting the rehab work done, and then sells the house to the buyer for the cost of the house plus the rehab. At closing, NEHI comes in with up to 20% of the selling price as down-payment assistance, which means the lender only has to loan 80%. NEHI’s loan is 0% interest and is due in full 30 days after the buyer 1) pays off the house, 2) sells the house or 3) defaults. If the buyers live in the house until it is paid off, they have equity in the house to borrow the amount of the loan.
The beauty of this program is that it keeps the buyers’ payments affordable for 30 years so their life can go through the normal ups and downs, and the house’s major systems are in good working order when the buyer moves in. Our hope is that they will have no major expense for 5-10 years.
Why did you develop the program?
The main reason Northeast Housing Initiative (NEHI) started was Northeast Nebraska had no ongoing housing programs. Until about 1993, the only housing programs available were through CDBG grants, which were awarded to city and county governments who can prove that at least 51% of their population is below certain income guidelines, and which must be spent within a year or two. Once HUD HOME funds and Nebraska Affordable Housing Trust Funds became available, we could have more continuity to our programs.
The person who started our organization and program saw that in order for a village to keep its school, they needed to attract young families. In order to attract young families, they needed to make buying a home easy. So they started out with a down payment program in the village. But then he saw that in order to run a program efficiently, we needed a population base of at least 20,000 and in order to do that, we needed to be regional. So we started out with three counties and have now expanded to six. We try to take all the legal requirements and simplify them, leading our customers through the maze of buying that first house.
How do you finance your program?
- Mainly with HUD HOME funds and Nebraska Affordable Housing Trust Funds which are administered by the Nebraska Dept of Economic Development, Community & Rural Development Division, Housing Department and are awarded through a competitive grant writing process for 24 months (existing homes) or 36 months (new construction).
- The Nebraska Investment Finance Authority has partnered with us on some targeted operating funding in the past and annually matches funds that we raise for Homebuyer Education.
- Federal Home Loan Bank of Topeka offers forgivable loans for rehabilitation and closing costs, which we access for our buyers.
- We have recently received a grant from Wells Fargo which will be used for closing costs for those buyers who do not qualify for the FHLB forgivable loans.
- We have been providing Homebuyer Education Workshops for eight years and several types of counseling for the last two years (pre-purchase, post-purchase, money and/or debt management, rental) and will be writing a grant for HUD Housing Counseling funds in 2009, which could become an ongoing annual grant.
- In 2008 we began an annual request letter to all of our vendors and past customers to fund an Operating Reserve account.
Key elements to our program’s success are:
- Our good working relationship with the staff at the Nebraska Dept of Economic Development Housing Department.
- Homebuyer Education Workshop, Counseling and Advocacy. They more the buyers knows and understands about the process, the more in control of the situation they are, the happier they will be with the outcome.
- A Board that is truly committed to the purpose of our organization.
- Nebraska Housing Developers Association is a statewide organization of housing developers of all types who support each other in all aspects of our work.
Tags: down-payment assistance, Nebraska, Northeast Housing Initiative, Purchase Rehab Resell, Rehab Housing, rural housing
Posted in Community Development, Housing, Rural | Comments (1)
Northeast Housing Initiative – A success story
November 7th, 2008
I’ve been working on an interview with Linda Kastning of Northeast Housing Initiative (NEHI) of Allen, NE. Until that’s ready, Linda gave me permission to reprint a story from NEHI’s upcoming annual report.
Since 2000, NEHI, Inc. – Northeast Housing Initiative has been strengthening our communities through the development of affordable housing in our six-county region. NEHI buys houses that need improvements, makes the necessary repairs, and then resells the properties. Prospective first-time homebuyers in the area learn about the responsibilities of homeownership through NEHI affiliated homebuyer education classes and access HUD HOME and Nebraska Affordable Housing Trust funds for down-payment and closing costs for their purchase through NEHI’s programs and the Nebraska Department of Economic Development.
Local communities and families benefit from NEHI’s work. One example can be found in Wakefield, where Jesse and Jena Kaufman purchased their home. They moved in with their son, Timothy, in December 2007 after a major repair funded by NEHI. In the older, two story home, Jesse completely resided the exterior with vinyl instead of painting and saved enough money to replace the enclosed back porch with a deck, replace the water heater and install a dishwasher. Windows and doors were replaced and code standards were met. “It was a lot of work, but it was worth it,” Jesse said.
Besides funding the home improvements, NEHI also provided down-payment assistance to help the young family. “We couldn’t have bought a house without NEHI’s help. We didn’t have any experience working with lenders and realtors,” Jena said. “We needed someone to talk to when there were unexpected expenses and decisions to make about the house and the closing. NEHI was there to help us make those decisions.”
You’ll learn more about Northeast Housing Initiative’s work in my future interview with Linda, but I want to lift out two important points from the above story. First, because NEHI established a code of standards, we know that this family is living in a quality home. Second, NEHI provided valuable assistance to the homebuyers in the lending process. My guess is that if we had more organizations like Linda’s, we wouldn’t have this mortgage foreclosure crisis. Keep up the good work, Linda.
Tags: down-payment assistance, Nebraska, Northeast Housing Initiative, Purchase Rehab Resell, Rehab Housing, rural housing
Posted in Community Development, Housing, Rural Life | Comments (1)