The U.S. Department of Housing and Urban Development Section 8 program, which provides monthly rental assistance to low-income working families, the elderly and the disabled, was enhanced in September 2000 when HUD established new rules enabling qualified Section 8 recipients to use their rental assistance vouchers toward home mortgage payments.
The Grand Rapids Housing Commission, which works to eliminate adverse housing conditions, wanted to find a way to incorporate the Section 8 homeownership program into its local housing plan and expand homeownership opportunities.
It’s now the first housing commission in West Michigan and one of fewer than 50 such commissions nationally to do so.
Compliance with Section 8 HUD rules was the easier part for the commission to put together, recalled Carlos Sanchez, executive director.
The harder part was getting together the partners that would provide the loans and the partners that would provide the training, as homeownership education is mandatory under the program.
The ICCF was willing and able to handle the training component and the homeownership and credit counseling.
ICCF is a local housing ministry that serves more than 750 Grand Rapids families a year by providing emergency shelter, rental properties and home ownership opportunities to those living in substandard conditions.
“Then Fifth Third came along and looked at the rules and regulations … and, together with this group, managed to come up with a product.”
In conjunction with the housing commission and the ICCF, Fifth Third designed a loan program specifically for the purpose of making and servicing loans to Section 8 homeownership program participants.
Patrick Lonergan, Fifth Third vice president of community affairs, said Fifth Third’s goal in the partnership has been to help bring the pieces together “so the end product here is a homeowner.”
Fifth Third spokesperson Peggy Janei said the bank had been working on the program for months and that it represents another way Fifth Third is trying to help promote homeownership among low- to moderate-income residents.
“It’s the first formalized program of its type in Michigan,” she noted. “There was one in Ann Arbor but it was not a formal program.”
The Grand Rapids Housing Commission determines eligibility for Section 8 homeownership and refers qualified applicants to ICCF’s 15-week Home Ownership Preparation and Education (HOPE) program.
Applicants completing the training then become eligible to purchase a home under Section 8 guidelines.
Four of the seven local residents in the first “graduating class” were recognized Monday at the ICCF Housing Opportunity Center.
Grand Rapids resident Rita Buggs perhaps summed it up for all the graduates when she said “Hallelujah” upon receiving her certificate.
Jonathan Bradford, ICCF executive director, said that for 28 years, through the generosity of many individuals, businesses, churches and foundations here, the ICCF has been able to work with and for Grand Rapids families toward achieving their housing goals.
With the community support ICCF has raised, the organization has been able to enhance its homeownership services and add an emergency shelter and permanent residence house, he noted.
“It’s through the realization of housing goals that many other successes in life can take place,” he said.
Bradford said the Section 8 program is an important federal housing policy that helps address major gaps in the rental market.
He stressed that a lot of families who are benefiting from Section 8 can just as well use those benefits in the pursuit of homeownership.
“We think it makes great sense, so it’s an honor to take our many years of experience and leverage it with the new openness and willingness of the federal government, and the generosity and flexibility of a local lender, to enable homeownership to happen.”
As Sue Ortiz, ICCF Home Ownership Program manager, put it:
“Using Section 8 assistance for homeownership gives renters the option to build equity, which is the foundation for personal wealth, and also creates greater family stability in our community.”
Sanchez said the housing commission talked with Fifth Third early on when it decided to pursue a program here because the bank had worked with the commission before.
“Before we actually put the program together we had to start asking some banks if they would be interested in providing the mortgages because it wouldn’t do any good if we had the program and no banks would provide the loans,” he explained.
“The Section 8 homeownership program is all fairly new with new regulations so everybody kind of looks at it with real caution.”
He said a couple of other area banks have expressed interest in the program, and the housing commission has set up an orientation meeting for them next month. Workshops for lenders also are planned.