July 4, 2002, was truly independence day for 28-year-old Deb Drury. She was free of housing hassles and the financial worries that can result from renting a home.
As American flags flew around the neighborhood, Drury and her two young sons moved into their new North Side townhouse after spending many months collaborating with various Missoula organizations that are working to develop affordable housing and assisting low-income families build assets through homeownership.
In doing the math, Drury figures that over three years of renting, she spent $25,000. "I decided there's got to be something else to do."
Drury thought home ownership was out of reach. The median price of a home had risen to $151,635, up from $127,000 in 1999, according to Missoula County Association of Realtors figures.
Her journey toward the American dream of owning a home began when she says she "took 10 minutes and popped in" at the homeWORD Homeownership Center, a walk-in resource center in downtown Missoula that refers people to home-buying classes and offers information for financing.
"They were offering a class that week. ... It just fell into place," Drury adds.
Ellie Sigrist, housing services coordinator for homeWORD, says several programs exist in Missoula for low- to moderate-income people who don't think they can own a home of their own. A local support corporation of the Women's Opportunity and Resource Development in Missoula, homeWORD has been funded for the past two years by the Federal Home Loan Bank of Seattle.
At the Homeownership Center, Sigrist says, "We steer folks toward the classes, and then if they still need more information, we work with them one-on-one."
Since the classes began in 1997, Sigrist says her organization has seen a 35-percent success rate, with more than one in three people who attend the classes being able to soon purchase a home. In similar programs nationwide, only one in seven will become a homeowner after completing the course.
"Rent is getting out of control," Drury insists. "If you qualify, get down there and take the classes. Ellie and her staff are there for you every step of the way."
Classes are held at the homeWORD office, 127 N. Higgins Ave., Room 303. "Assessing Homebuyer Readiness" is a walk-in session in which staff members will calculate a mortgage amount for which a potential buyer could qualify and assess how feasible it is to go forward. It lasts about an hour.
The next step is preregistering for a 10-hour, nationally certified course covering the basics of home buying. The Missoula Homeownership Network also explains various financial-assistance programs for which class participants may qualify.
Sigrist estimates that eight people a month, or 100 each year, attend the one-hour assessment class. The 10-hour course has up to 200 attendees each year.
Missoula Homeownership Network also offers information and help for people who already own a home. The Network lists more than a dozen special financing programs to help with maintenance and repair costs, as well as preventing a foreclosure. All of these programs are working together to encourage and support homeownership for Missoula's low- and moderate-income people.
Since it first opened its doors in 2000, Missoula Homeownership Network has helped more than 127 renter families become homeowners, and 97 of them earned low or moderate incomes. Assisting the network is homeWORD, NeighborWorks, Neighborhood Housing Services of Great Falls, Missoula Housing Corp., Human Resource Development Council and Missoula Urban Development.
"What we are offering is called full-cycle lending," Sigrist explains. "We do prepurchase education (classes) and help with financing for down payment." After people have lived in their home for a full year, the Human Resource Development Council offers low-interest rehabilitation loans, as well.
North-Missoula Community Development Corp. is yet another neighborhood-based nonprofit organization that sponsors programs in affordable home ownership, as in Drury's case.
"I coordinate the Home$tart Program, offered through Federal Home Loan Bank of Seattle," Sigrist says. "They work with participating Missoula lenders." The Home$tart program can grant low-income families up to $5,000, matching their own savings with $3 to every $1 they save in a two-year period.
Through Home$tart's money-matching program, a low-income person who needs assistance with a down payment is taught ways to save $1,667 in two years. Savings are matched $3 to every $1 in a two-year period. The prospective home buyer can receive $5,000 toward a down payment and closing costs, and if they own the home for five years, the matching funds do not have to be paid back.
"It helps instill savings habits," Sigrist says.
In Drury's case, she was so determined, she saved the $1,667 in six months. Then she started to work with a Realtor, Rochelle Glasgow of Lambros Realty, who told Drury to first line up bank financing.
Much of Drury's budgeting sense comes from on-the-job training. She has worked for two years at Community Medical Center in the Employment Center, helping disabled people find suitable jobs.
Drury recalls the day her bank of 10 years rejected her loan application. "They turned me down flat," she says. "I was so upset."
Glasgow encouraged Drury to try other lenders until she got one to accept her and work with Home$tart. "I realized I couldn't afford anything," Drury says. "At one point in time I was absolutely in tears because I thought they were going to deny me."
When Montana Board of Housing financing at 5.65 percent interest was ensured, the Drury started looking at homes.
After looking all over the Missoula area, she wound up right where she'd started at homeWORD.
Sigrist says, "We had three town homes we owned for awhile. (Drury) was a good candidate."
The three bedroom, 1 1/2 bath, two-level town home has a fenced back yard for the boys to play and take care of a small flower garden.
In all, Drury was able to purchase her home with the $5,000 down payment derived from the Home$tart 3-to-1 match of her $1,667. The bank coordinated the 5.65 percent Montana Board of Housing loan.
Then Sigrist was able to stack a Missoula Housing Corp.'s Northside Neighborhood Program loan to Drury for $20,000 at 2 percent interest. And, homeWORD loaned $9,000 on the mortgage. An equity lien of $9,000 ensures homeWORD that it will recoup the loan upon sale of the residence, with no interest accrued.
"There are a number of folks, who with some of the programs, we stack them onto each other," Sigrist says. "Most families can only afford a limited amount from the bank and these programs help bridge the gap between what they can afford and what the market is."
Although new homeowners may find their monthly payment is higher, the end result is a plus.
"There are certainly many folks who will be paying more than what they were paying in rent," Sigrist says. "Equity and ownership are the goals that offset the higher payment."
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