FRONT LINES: The HOPE Awards

BY ROBERT FREEDMAN

Hope for today and tomorrow

Like many young immigrant couples with dreams of homeownership, the Sosas were in some ways their own worst enemy. The Dallas couple was financially ready to trade renting for buying. But the buying process intimidated them and they found little help among their friends, who warned them not to let lenders take advantage of their inexperience. The result was paralysis.

But the Sosas’ story has a happy ending. They attended a free buying seminar hosted by Antonio Matarranz, broker-owner of Avangard Real Estate Services Inc. in Dallas, who helped them set aside their fear. They’ve since seen their house escalate in value.

For his successful outreach to minorities, Matarranz is one of two individuals and four organizations named winners of the 2005 HOPE Awards (www.hopeawards.org). The awards were created in 2001 by the NATIONAL ASSOCIATION OF REALTORS® and six partners—the Asian Real Estate Association of America, California Association of Real Estate Brokers, Chinese American Real Estate Professionals Association, Chinese Real Estate Association of America, National Association of Hispanic Real Estate Professionals, and National Association of Real Estate Brokers—to recognize people and organizations that are helping to lower barriers to homeownership among minorities. Each winner receives a $10,000 honorarium.

Thanks to the winners’ efforts, “thousands of minority families who’ve never had an opportunity to own a home will be able to stake their claim to the American dream,” says NAR President Al Mansell.

Eliminating fear

Leadership: Antonio Matarranz, Avangard Real Estate Services Inc., Dallas

Fear busting is Matarranz’s specialty. Some 10,000 people have at tended his homebuying seminars since he launched them in 1986, and hundreds of attendees have gone on to buy.

Matarranz conducts small-group seminars in his office once a month and hosts area-wide forums attracting hundreds of homebuyers three times a year.

He backs up his seminars with assistance his customers don’t forget, says Beth Gunderson, who does bookkeeping and marketing for Avangard. “He helps re move errors from prospective buyers’ credit reports, intercedes for them with lenders hesitant to loan on homes in under- invested neighborhoods, and counsels them through difficult periods.”

Spreading knowledge

Brokerage: Allen Chiang, Presidential Real Estate Inc., Rowland Heights, Calif.

When Chiang, CCIM, CRB, bought his first house in 1987, the Chinese immigrant and then-telecom manager saw the importance of working with practitioners who have a deep understanding of real estate. “I didn’t feel protected,” says Chiang, who came to the United States in 1979.

Chiang decided he wouldn’t feel unprotected the next time he entered the real estate market. He earned his sales license in 1987; in 1991 he launched his own company, Presidential Real Estate Inc. Thanks in part to a focus on training that includes free seminars on legal and other issues to licensees outside his own company, he’s grown his brokerage to 300 associates. “I don’t want to just build my own associates’ knowledge,” he says. “I want to help build all associates’ know ledge. That helps everyone because when we work together on transactions, we all have the same level of education.”

More than a quarter of his sales associates have earned multiple designations. Some 15 languages are spoken in his offices, including various dialects of Chinese. That means customers of diverse ethnicities can find an associate who not only speaks their language but also speaks the intricate language of real estate fluently.

Lifting all boats

Education: Little Haiti Housing Association Inc., Miami

For many households, the tax refund check they receive is a chance to buy a new couch or take a vacation. But Jacques St. Louis knows it might be the only way hundreds of low-income households in his part of Miami, known as Little Haiti, will ever achieve homeownership. That’s why he and the other counselors at Little Haiti Housing Association Inc. tell people attending the group’s free homeownership counseling sessions, “If you can save your tax refunds for two or three years, you have enough to buy a home.”

That kind of commonsense advice has helped put 149 households, most of them immigrants from chaos-plagued Haiti, into homes since 1992—and without a single mortgage default. The group counsels some 1,000 households each year and graduates about 60 households annually. About 75 graduate households are on a waiting list for buying assistance from Little Haiti Housing and other programs.

Common sense informs everything the group does. It eschews running ads in newspapers or on TV because those aren’t media Haitians look to for information; radio is, so the group concentrates its re sources on that medium and conducts its classes in Haitian Creole since many house holds aren’t fluent enough in English to absorb lessons on financing topics.

Some households helped by Little Haiti Housing are now getting their first taste of what it means to tap the American dream. One family bought a home for $50,000 in 1997. The house has been appraised at $300,000. “We can’t help them anymore,” says St. Louis, the association’s housing director since 1993, “and that makes me happy.”

Landing on firm ground

Finance: Partnership for Home Ownership Foundation, Springfield, Ill.

After years of living paycheck to paycheck, making payments on a dozen credit cards, and scrimping to pay her rent each month, Minnie Johnson (left, with Beth Llewellyn, Partner ship for HomeOwner ship Foundation CEO) is breathing a sigh of relief. Three years ago her church helped her link up with a housing initiative in her hometown of Quincy, Ill. Since then she’s pared back her nonessential spending and consolidated her debt. Last fall, she bought her first home.

Johnson was one of 34 buyers tapping assistance last year through the initiative in Quincy, developed by the foundation, an affiliate of the Illinois Association of Realtors® and funded by state and federal agencies, including the Illinois Housing Development Authority.

The program pairs intensive counseling and credit consolidation with innovative financing. Buyers who earn up to 60 percent of the area median in come receive fixed-rate mort gage financing at a 3.25 percent interest rate and up to $5,000 in closing cost assistance; buyers who earn more than 60 per cent of median receive financing at 5.15 percent interest and up to $3,000 in assistance.

To help buyers overcome traditional credit hurdles, participating lenders evaluate credit risk using face-to-face interviews and dispense with FICO scores. The program also helps buyers avoid trouble down the road: Borrower debt is restricted to 20 percent of gross monthly income, and total back-end debt ratio (all debt including mortgage debt) is kept at 36 percent. That leaves 5 percent more in monthly in come in borrowers’ hands than in typical public no- and low-downpayment programs. Since its launch in the mid-1990s, the foundation has helped some 1,400 households achieve home ownership and thousands more become home ownership-ready through financial counseling.

By the sweat of their brow

Project: Coachella Valley Housing Coalition, Indio, Calif.

Each night after they’d put in a full day’s work, José and Maria Garcia donned work gloves and, joining other families, helped build a dozen homes for themselves and their neighbors in Mecca, Calif. It took about 10 months to complete all of the houses.

“For many of the low-income families here, achieving homeownership isn’t about selling later and moving on; it’s about having a place of their own—for life,” says John Mealey, executive director of the Coachella Valley Housing Coalition, which bought the land for the houses and helped the families secure below-market mortgage financing and in some cases grant assistance.
The nonprofit housing group, which launched in the early 1980s, has provided almost 1,600 units of affordable rental housing and, on the home ownership side, given almost 1,000 families, many of them earning less than $20,000 a year, the chance to use their sweat equity rather than their few saved dollars to buy.

Buyers tap fully amortizing, fixed-rate financing with rates as low as 1 percent through some federal below-market rate mortgage loan programs. In some cases the buyers will add a second loan from the locality or a nonprofit group to make the financing pencil out.

For the Garcias, the house gave their son, José Manual Jr., a room of his own to study in, something he never thought he’d have.

ABCs in homeownership

Media: Los Angeles Times in Education, Chatsworth, Calif.

Once or more a month, the students in some California public schools open to the real estate section of their newspaper and apply the math and other skills they’re acquiring in the classroom to a real-world topic: homeownership.

“Imagine what a wonderful opportunity it is for teachers to talk about real estate, including the importance of establishing good credit, before their students make financial decisions that could impact their credit later,” says Andrea Reinken, regional manager of Los Angeles Times in Education and administrator of the HomeWords program.

Los Angeles Times in Education launched Home Words four years ago as a pilot program with help from the South land Regional (Calif.) Association of REALTORS® Inc. The CALIFORNIA ASSOCIATION OF REALTORS® stepped in two years later to expand it to five other newspaper markets in the state; it pays for the newspaper subscriptions. Some 4,110 teachers now participate in the voluntary program, reaching some 216,000 students.

Using program study guides and worksheets, teachers might assign students salaries and budgets and ask them to calculate which homes advertised for sale in the newspaper they can buy, factoring in the purchase price and the amount of mortgage they can qualify for.

For teachers, HomeWords is a way to get students interested in the newspaper—and, by extension, reading, writing, and using reasoning skills, says Reinken. The program is also laying the foundation for wise decision-making by future homeowners.

2005 HOPE Awards judges
Henry Cisneros, former secretary of the U.S. Department of Housing and Urban Development; Rep. Michael Honda, D-Calif.; Earl Lee, president of Prudential Real Estate Affiliates Inc.; Rep. John L. Lewis, D-Ga.; Nicolas P. Retsinas, director of the Joint Center for Housing Studies of Harvard University; and Andrew Schoenholtz, deputy director of the Institute for the Study of International Migration for Georgetown University.