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Spotlight: A conversation with Christie Peale, CEO and Executive Director of Center for NYC Neighborhoods

A self-professed “champion for homeowners,” the Center for NYC Neighborhoods put its 12 years of experience to work this year to help New Yorkers preserve their homeownership and curb the negative effects of COVID-19 across the state. Founded in the wake of the 2008 mortgage crisis to protect middle- and working-class families and the communities they live in, the Center is one of the country’s largest nonprofits dedicated to affordable homeownership. The organization provides comprehensive homeowner services, including mortgage assistance, foreclosure mitigation, scam prevention, rehabilitation support and disaster response.

Relying on community relationships, a network of partners and its Homeowner Hub, this Department of Housing and Urban Development (HUD) approved counseling group was able to continuously calibrate its response efforts with real-time feedback from local homeowners. It has also leveraged its wholly-owned subsidiary, Sustainable Neighborhoods LLC, a certified Community Development Financial Institution (CDFI) and licensed mortgage banker, to directly assist homeowners. By maintaining a dialogue with the complete spectrum of housing stakeholders – from homeowners and community leaders to local, state and federal policymakers – the Center has been able to identify and resolve some of the most pressing housing issues that emerged in the months following the outbreak of the pandemic.

The National Housing Conference spoke to Center for NYC Neighborhoods CEO and Executive Director Christie Peale and Director of Communications Cristian Salazar to examine the evolution of the organization’s outreach, services and advocacy from the onset of the pandemic to today, and discuss what challenges still lie ahead.

How did the Center for NYC Neighborhoods first get started?

The Center was created in 2007 by Mayor Michael Bloomberg and other city leaders, along with private capital and foundations, to help tackle the city’s response to the subprime mortgage crisis as a way to get ahead of the challenges facing homeowners – instead of waiting for federal assistance. The organization formally launched in 2008 and has devoted its efforts since then to empowering local homeowners to preserve their homeownership in the face of any kind of crisis, whether it’s natural disasters, scams or a global pandemic.

The Center also played a role in Hurricane Sandy relief, raising $1.3 million in funds, as well as directing federal support towards storm recovery and reconstruction. After successfully launching a citywide loan program for homeowners at risk of foreclosure, the organization was tapped by the New York Attorney General’s Office to take its program statewide, creating the New York State Mortgage Assistance Program. In recent years, the organization has evolved to become a “one-stop shop” for protecting and promoting affordable homeownership.

What lessons learned from the 2008 mortgage crisis are applicable to COVID-19 and how has the organization shared those with policymakers and lawmakers?

When COVID-19 struck, the Center focused on its core mandate to protect homeowners at immediate risk of foreclosure, armed with the insights gained from years of helping homeowners successfully navigate post-crisis conditions. In areas where the organization had deep expertise, such as the allocation of crisis funds, the Center’s advocacy team shared its best practices with state and federal policymakers. For example, the organization has developed recommendations for how the HEROES Act’s Homeowner Assistance Fund should be implemented based on its own experience with the Department of Treasury’s 2010 Hardest Hit Fund and has offered the New York State Mortgage Assistance Program as a model for how homeowner assistance funding should be rolled out on a national scale.

Drawing on its involvement in previous foreclosure crises, the organization also outlined common pain points that can, and should be, avoided when policymakers and lawmakers design new COVID-19 relief programs. Direct homeowner assistance, for instance, should take a consumer-oriented approach, avoiding overly stringent program eligibility and documentation requirements that act as barriers to connecting homeowners with the help they need. The Center has also advocated for greater participation from housing counseling organizations and legal services, stronger investment in public outreach campaigns and servicer incentives that enhance participation, communication and data transfer.

How did the organization maintain communication with homeowners during COVID-19?

The Center’s Homeowner Hub has historically been the primary channel for which the organization stays connected to the community and its needs. The organization manages and staffs this homeowner hotline that receives and directs at-risk homeowners from across the state and city.

The Homeowner Hub is a single point of entry system that homeowners can access by calling 311 in the city or by submitting a request for assistance from HomeownerHelpNY, FloodHelpNY, or the Center for NYC Neighborhoods websites. The hotline provides rapid homeowner assistance, offering brief advice and connecting homeowners to vetted organizations in the neighborhood that can help resolve their issues. As part of the Homeowner Hub, the organization also conducts proactive engagement to severely delinquent homeowners to connect them to free services. The organization ramped up its hotline support in response to the spike in inbound inquiries – representing existing users, as well as new homeowners. The hotline played a central role in cluing the organization into the needs on the ground in real time, acting as a sort of “nerve center” during COVID-19.

What were some of the housing issues homeowners raised during COVID-19?

The Center relied heavily on the feedback of homeowners to track the evolution of housing issues throughout the pandemic and calibrate its advocacy and support accordingly. Early on, many homeowners expressed confusion around what a forbearance was, with some homeowners failing to take advantage of this loss mitigation option despite experiencing financial hardship. Over time, the organization fielded more questions about taxes and escrows and what happens at the end of a forbearance. 

Certain subsets of the homeowner population emerged as areas of concern based on the information received from the Homeowner Hub and other outreach efforts. For instance, the organization received a growing number of inquiries from smaller landlords – still responsible for paying their own mortgage, while seeing their rent collections dwindle and waiting on federal rental assistance. In the late summer months and heading into the fall, roughly one in five inquiries were from small landlord homeowners related to tenant nonpayment. In response, the organization developed a loan program, available through its wholly owned subsidiary CDFI, uniquely designed to support these landlords by providing financial support directly to homeowners and their renters with funding from the Credit Builders Alliance. These loans allow landlords to continue to pay their mortgage, while preserving tenants’ safe housing. In addition to programmatic support, the organization alerted lawmakers, policymakers and financial institutions to the need for greater assistance for small landlords and their tenants.

Other than small landlords and tenants, are there any at-risk populations the organization prioritized during COVID-19?

While the Center is committed to serving all middle- and working-class families in New York, different subsets of the population emerged as particularly vulnerable during the course of the pandemic. A significant volume of inquiries came from senior homeowners, for example, who may be more susceptible to scams and experience greater difficulty getting in touch with their mortgage servicer. To ensure that these seniors were staying up-to-date on the latest relief options, moratoriums and forbearance requirements, the organization engaged in targeted outreach, including mailings and resources for senior centers.

The organization’s Senior Homeowner Initiative pre-dates COVID-19, but was essential to supporting this subset of homeowners. The initiative is a coordinated effort, led by the Center and seven community-based legal services and housing counseling providers, that focuses on integrating cross-sector services by coordinating with government partners, elected officials, and mortgage lenders to collectively reach out to community-based organizations and older homeowners and advance policies that protect senior homeowners.

How has the organization managed housing issues that were difficult to resolve?

Some of the most challenging housing issues the organization encountered during COVID-19 were referred to the Escalations Program. The program works directly with housing counselors statewide to resolve complex cases with the end goal of helping homeowners avoid foreclosure. The Center leverages extensive relationships with staff at financial institutions and mortgage servicers to escalate cases and come to an effective solution. The Escalations Program is also a component of the Attorney General’s Homeowner Protection Program. As part of the program, the organization met with servicers to resolve issues around loss mitigation and forbearance during COVID-19 and even referred a few cases to the New York Department of Financial Services and the New York Attorney General.

How did the Center mobilize and support housing counselors during COVID-19?

The Center increased its support of HUD-approved housing counseling agencies in response to the needs of homeowners during COVID-19. When New York initially went on pause, the organization quickly circulated a survey to members of its network of community-based organizations to assess availability and counseling status. The organization maintained a dialogue with counselors and collected data that was shared with the Attorney General’s Office to ensure legal services and financial counselors were addressing housing issues as they arose.

Counselor feedback also helped the Center to better understand what COVID-related content should be circulated at any given time. The organization continued coordinating housing counseling training, which helps educate and update organizations on available programs and facilitates resource sharing, and contributed to the Urban Institute’s Mortgage Market COVID-19 Collaborative borrower awareness campaign. The campaign encourages homeowners to contact housing counselors to access forbearance options. In preparation for 2021, the organization is also developing new strategies to support housing counselors and homeowners as more homeowners exit forbearance. 

What challenges does the Center anticipate in the coming months? 

There are many unanswered questions as homeowners and renters near the end of emergency forbearance programs and eviction protections. What happens at the end of a 12-month forbearance? Will the U.S. see a wave of evictions and foreclosures? How can housing organizations ensure these households get the legal support they need? Any response should recognize and address the disproportionate impact of the pandemic on Black and Hispanic communities. For too many families of color, COVID-19 is the latest threat to stable and affordable housing. The disparity in infections has been tied to the decades of segregation, redlining and persistent discrimination faced by Black Americans. The Center for NYC Neighborhoods is working to ensure that the responses to this crisis narrow the racial gap in household wealth and health, and do not widen it.

Spotlight: A Conversation with Andrew Szalay, Executive Director Of Lancaster Lebanon Habitat for Humanity

When COVID-19 struck, Lancaster Lebanon Habitat for Humanity had to make quick, and in many instances difficult, decisions about how to maintain services and launch new programs with strained resources and new restrictions in place. The organization’s belief that affordable housing plays a critical role in strong and stable communities was put to the test during the pandemic; ultimately, however, this nonprofit proved that when homeowners have a foundation of affordable housing and supportive community resources, they can persevere through crises.

With a full pipeline of construction projects, the purchase of a new property in the works, and having recently hired another construction building supervisor, the Pennsylvania affiliate of the international organization looked to its original mission when deciding how to move forward as a global pandemic and economic crisis unfolded around them. Considering its mandate to “bring people together to build homes, communities and hope” and advance “strength, stability and self-reliance through shelter,” Lancaster Lebanon Habitat employed a ‘back-to-the-basics’ approach, pivoting its services to meet the needs of the community, even when it meant delaying revenue-generating construction projects and closing ReStore – their home improvement and donation center that sells new and gently used furniture, appliances and building materials. This mission-oriented approach paid dividends for the community, helping prospective homebuyers navigate construction delays, preserving struggling households’ homeownership through strategic forbearance programs and providing food to essential workers, individuals with COVID-19 and anyone else in need. 

The Habitat for Humanity affiliate has been serving residents of Lancaster County and Lebanon County for more than 30 years, helping over 300 families. Their homeownership program invites eligible households earning 40% to 80% of the area median income to contribute sweat equity hours, alongside other volunteers and Habitat for Humanity staff, to construct or renovate an affordable home. The program includes personal finance education to ensure that once a completed home is sold, that household has the information and tools necessary to maintain their mortgage.

The National Housing Conference spoke to Executive Director Andrew Szalay and Community Outreach Manager Allyson Wells to discuss how the organization responded to challenges during COVID-19 in real-time and how the experiences over the past six months have strengthened its commitment to providing Pennsylvanians a decent and stable place to live.

How were the communities of Lancaster and Lebanon affected by COVID-19?

Lancaster Lebanon Habitat serves a diverse community, spanning rural, agricultural areas, Amish country and Lancaster City, which is among the most densely populated counties in Pennsylvania. Much of the local workforce is employed by large, local manufacturers. Many households in Lancaster and Lebanon were fortunate to remain employed throughout the pandemic, as businesses such as agriculture product and medical care were deemed essential services.

Lancaster’s demographic makeup is particularly diverse, because the area is a resettlement site of international refugees thanks to nonprofit Church World Service. Many first generation Cubans, Haitians, Congolese and Ethiopians have come to call the Pennsylvania city home, resulting in a truly unique group of participants in Lancaster Lebanon Habitat’s homeownership program. The 12 homebuyers currently enrolled in the program represent nine different countries. And to ensure the organization’s ongoing ability to support households from around the globe and bridge language barriers, they’ve hired translators to work with homebuyers and volunteers.

How was the construction pipeline impacted and how did that affect homebuyers in the homeownership program?

All of the construction projects Lancaster Lebanon Habitat had in the pipeline, including the construction of five new homes, came to a complete halt in late March. Remembering their mission statement and core values which directed them to protect the safety of the community, the organization was cautious about restarting construction and waited until the state entered the green phase of reopening on July 3 before returning to job sites. Despite the organization’s desire to get eager homebuyers into their homes and resume revenue-generating work, Lancaster Lebanon Habitat chose to proceed carefully and slowly to ensure the safety of volunteers and prevent the spread of COVID-19.

Construction began with two professional supervisors who worked independently at the building sites. Before Lancaster Lebanon Habitat finally welcomed volunteers back to construction, the organization examined COVID-19-related guidance from the Occupational Safety and Health Administration, the Centers for Disease Control and Prevention and the Pennsylvania Department of Health to produce their own guidance unique to their construction sites and retail store.

In addition to prolonged construction and delayed move-in timelines, Lancaster Lebanon Habitat pledged to help homebuyers through unexpected financing and qualification issues; they stressed that current COVID-related issues would not prevent them from becoming homeowners in the future.

What was Lancaster Lebanon Habitat’s outreach strategy during the crisis?

When figuring out how to connect with the organization’s previous homebuyers – some of whom had very limited contact information available – Lancaster Lebanon Habitat decided to mail letters. The first round of correspondence went out on March 17, even before the state issued a stay-at-home order, followed by another round in April. The letters explained that despite the uncertainty that lay ahead, Lancaster Lebanon Habitat was available as a resource for whatever homeowners might need. Several of the recipients who received letters followed up with a phone call to inquire about loss mitigation options and were eventually placed in a forbearance plan.

Concerned that they were still not reaching the entire community, the organization expanded its outreach strategy to include getting out into neighborhoods and speaking to residents in person. Staff visited with community members and asked how they could be of service during the pandemic. When some households expressed a need for food, Lancaster Lebanon Habitat mobilized a food drop-off program. The program quickly grew to more than two dozen food box drop-offs a week and served a diverse group of individuals, including homeowners that contracted COVID-19 and were quarantined at home, essential workers that took on longer hours at work and couldn’t find the time to get to the grocery store and households managing strained finances.

Throughout its communication, the message was clear and consistent: the door is always open for help. And as a result, the organization was able to strengthen existing relationships and forge new bonds in the community.

How did Lancaster Lebanon Habitat address the needs of existing homeowners?

At the height of the crisis, Lancaster Lebanon Habitat had seven homeowners who lost their job or experienced reduced income that impacted their ability to pay their mortgage. The organization developed two forbearance programs to support homeowners who went through the homeownership program, both of which waive late fees and pause negative reporting to the credit bureaus to limit the financial damage incurred by homeowners. Lancaster Lebanon Habitat looked for common themes across the forbearance plans implemented by Fannie Mae, Freddie Mac and the Federal Housing Administration, and consulted with Fulton Mortgage to create the first forbearance option, which allows homeowners to delay mortgage payments for up to one year on a three-month renewal basis.

While the majority of the forbearance programs available today allow mortgage holders to forgo the principal and interest component of their mortgage payments for a specified period of time, homeowners are still responsible for taxes and hazard insurance – typically covered by the escrow account. Over time, the risk of the escrow account drawing more debt risks nonpayment of taxes and insurance and increases the likelihood of uncovered damages and foreclosure actions by the taxing entity.  

If a homeowner’s mortgage has an escrow account, property taxes and insurance should continue to be paid during forbearance, but that isn’t the case for all mortgages. The Consumer Financial Protection Bureau has urged homeowners to confirm escrow payments with their servicer and organizations like the Credit Union National Association have called on the Federal Housing Finance Agency to clarify the treatment of escrow for mortgages backed by Fannie Mae and Freddie Mac.

For private and nonprofit lenders serving low-income homeowners capital – which is required to advance mortgage and escrow payments – is scarce. Recognizing the risk of mounting tax debt, particularly for low-income homeowners, Lancaster Lebanon Habitat designed a second forbearance program to cover taxes and insurance payments while homeowners were not making mortgage payments or in instances where homeowners owned their home outright. Lancaster Lebanon Habitat funded the program with a $12,000 grant from the United Way of Lancaster County and the Lancaster County Community Foundation to cover escrow payments and hazard insurance on a homeowner’s behalf and ensure they do not fall into further debt, which could threaten their long-term investment as homeowners.

How has COVID-19 impacted donors and contributions?

Remaining in close communication with donors was essential to managing funding and gauging when additional support would be needed throughout the first couple of months of COVID-19. In the absence of revenue from ReStore or home sales, Lancaster Lebanon Habitat went into overtime to keep donors abreast of the challenges facing homebuyers and homeowners through newsletters, Facebook Live events and even a virtual town hall. Sharing personal stories and connecting donations to tangible outcomes, like helping a family get into secure housing during the pandemic, helped keep donors engaged.

Lancaster Lebanon Habitat also sought out new sources of funding to maintain services, ranging from personal donations from staff to partnerships with other nonprofit and for-profit organizations, such as the United Way, Tabor Community Services and Community Asset Partners. CARES Act programs, including funding from the Paycheck Protection Program and a Small Business Administration loan, also provided invaluable financial support to help the organization bridge operating expenses.

Has COVID-19 altered the organization’s plans for 2021?

After a tumultuous six months, Lancaster Lebanon Habitat is on track for a hopefully more normal year in 2021. Although construction timelines were delayed by three months, which set operational timelines back by about six months, the organization is slowly returning to normal. ReStore is back open and all furloughed staff have returned to work. In many ways, COVID-19 has strengthened the staff’s competency across program areas, improved partnerships throughout the community and reinvigorated Lancaster Lebanon Habitat’s enthusiasm for serving people.

What can political leaders do to better support nonprofits during COVID-19?

While policymakers and lawmakers at every level of government have done an incredible job deploying emergency funding and creating new programs over a short period of time, it’s important that they understand and consider the unique needs of nonprofits and how they differ from traditional businesses. A one-size-fits-all approach can often create undue barriers for nonprofits, like Lancaster Lebanon Habitat, hoping to participate in COVID-19-related programs. Program criteria such as no years with reported losses, while appropriate in for-profit eligibility, may be unrealistic for nonprofit organizations that devote the vast majority of their resources into impact rather than margin. By simply maintaining a regular dialogue with local nonprofits, policymakers and lawmakers can gain a better idea of how to ensure these essential community organizations can benefit from all of the emergency support measures implemented during the pandemic.

Spotlight: A Conversation with Margaret Salazar, Executive Director of Oregon Housing And Community Services

When Oregon Housing and Community Services (OHCS) published its first ever Statewide Housing Plan in 2019, the housing finance agency (HFA) could not have imagined the challenging landscape it would be navigating in 2020 or the new level of urgency the plan’s priorities – affordable rental housing, racial justice, homelessness, homeownership, permanent supportive housing and rural communities – would take on in the midst of a global pandemic.

OHCS is responsible for providing financial and operational support across the state to create and preserve opportunities for quality, affordable housing. OHCS administers a wide range of programs, partnering with state government agencies and local organizations, and engages leaders to develop integrated statewide policy that addresses poverty and creates opportunity for Oregonians. A “one stop shop” for Oregon housing, OHCS is tasked with stewardship, compliance monitoring, and asset management as it oversees funds from both federal and state resources.

The National Housing Conference spoke to OHCS Executive Director Margaret Salazar to discuss how this agile HFA, with an exceptionally broad mandate, was able to react and respond to a dramatic spike in housing-related need in the wake of COVID-19. Salazar explained how the challenges the organization faced in recent months have deepened OHCS’s commitment to sustainable housing and shined a bright light on the need for culturally responsive partners that deliver a positive and equitable impact in Oregonians’ lives.

OHCS worked closely with Oregon Governor Kate Brown and laid the groundwork for the state legislature’s support of sustainable housing through advocacy.

Has COVID-19 impacted the priorities established in the Statewide Housing Plan?

OHCS’s five-year Statewide Housing Plan was the result of two years of planning and listening tours across Oregon’s diverse communities – both large and small – including coastal villages, urban centers, “wheat country” and Portland’s suburbs. The plan lays out how OHCS will create more stable housing opportunities and highlights important priorities including advancing equity and racial justice, ending homelessness, investing in permanent supportive housing, reducing the cost burden for low-income renters, helping more households achieve and maintain homeownership, and responding to the unique housing needs of rural communities.

Each and every one of these priorities took on new meaning in 2020. From the challenge of avoiding homelessness and providing safe congregate housing during a pandemic to ensuring newly appropriated emergency funds were distributed quickly and equitably, OHCS’s commitment to the statewide housing plan was put to the test. The past couple of months have certainly illuminated areas for improvement, such as finding better solutions for agricultural workers who require emergency housing close to their place of employment in sparsely populated rural areas. However, just as important, COVID-19 has underscored how critical these priorities really are to keeping Oregonian families and individuals safe and secure – regardless of what’s happening in the world.

How does the COVID-19 Has COVID-19 changed OHCS’s relationships with its partners?

OHCS partners with many state government agencies and service providers across its programs for affordable rental housing development, asset building, asset management, energy and weatherization, homeownership, housing stabilization, homelessness prevention and manufactured homes. COVID-19 served to deepen existing relationships with partners in the state government, while also fostering stronger relationships with a diverse group of organizations.

As a part of OHCS COVID-19 outreach and response, the HFA collaborated with dozens of organizations, ranging from the state’s largest farm worker union to the Oregon Health Authority, to ensure the most comprehensive and coordinated supportive service delivery possible. The pandemic also served as a reminder of the value of good relationships with the state legislature and governor’s office. In developing the Statewide Housing Plan, OHCS worked closely with Oregon Governor Kate Brown and laid the groundwork for the state legislature’s support of sustainable housing through advocacy. Following the outbreak of COVID-19, these relationships made it possible for OHCS to easily communicate needs on the ground and obtain the necessary funding.

How did OHCS maintain communication with stakeholders during the pandemic?

Effective communication was key to OHCS’s response to the pandemic. At the onset of COVID-19, OHCS instituted a weekly communication call via Zoom, where program leaders were able to provide the latest updates, disseminate information and answer questions. Managing the deluge of government actions, such as executive orders, challenged the organization’s ability to keep the website up-to-date, but OHCS prioritized providing as much information as possible to its partners.

With its employees working remotely, OHCS worked just as hard to maintain communications with its internal team. Recognizing that many employees are already disconnected from the people they serve – because OHCS acts primarily as a program intermediary and facilitator – the organization had to reflect on how to keep employees engaged and connected in its mission. 

How has OHCS managed the distribution of COVID-19 funding?

OHCS was fortunate to receive significant funding from both the CARES Act and the state, with more than $200 million in housing stabilization and homeless services resources. This includes $26 million in project-based assistance to pay off arrearages in its regulated affordable housing portfolio, $3.5 million to provide non-congregate, safe sheltering for Oregon’s agricultural workers and $56.2 million in CARES Act Emergency Solutions Grant funding.

Knowing that homeowners, renters and households across the state were in dire need of immediate financial and housing support, OHCS tried to carefully balance the need for rapid distribution of aid and the importance of equitable administration of that aid. OHCS has worked to educate policymakers around the time it takes to assess the capability of partners on the ground and the access to support they provide across different communities. While remote work has made such assessments even more challenging, OHCS is requiring its partners to collect data disaggregated by race and ethnicity in order to monitor the impact of program spending.

How has OHCS been impacted by ongoing demonstrations in Portland?

Portland has been an epicenter for demonstrations against racial injustice and police brutality, seeing more than 100 days of protests. Even before the widespread unrest seen across the U.S. in the wake of George Floyd’s death, OHCS recognized that racial justice was a priority in need of greater attention.

The Statewide Housing Plan rightly acknowledges that “ongoing discrimination in the housing market combined with systemic barriers to economic mobility, wealth creation and opportunities impede progress toward parity.” In response to this call to action, OHCS committed to adopting an intentional, data-driven approach with its partners to reduce disparities in housing and social services. And although this commitment has proven more challenging in a rapid funding and remote work environment, OHCS has continued to layer a racial equity perspective onto its program administration.

When OHCS had to submit its 2021 budget request, for example, it conducted a racial justice assessment for its proposals. For current outcome-oriented contracts, OHCS has asked partners to demonstrate how they are culturally responsive and working to serve all demographics equally. Understanding that it will take time for all partners to demonstrate such an impact, OHCS has laid out a three-year plan to work with its partners at the end of which, organizations will have to show they are culturally responsive to receive future funding.

How is OHCS serving rural communities?

Oregon is an incredibly diverse state, in terms of ethnicity, occupation, geography and community type. During its COVID-19 response, OHCS has paid close attention to the unique challenges facing even its smallest communities, such as Pacific Islanders. The needs of the state’s agriculture workers living in rural areas were quickly escalated to OHCS through one of its partner organizations early in the pandemic as rent collections saw a decline of 40%.

OHCS immediately stepped in to support emergency housing needs in the agricultural community. The HFA partnered with the Oregon Department of Agriculture to determine the best way to provide non-congregate housing close to places of employment. Drawing on new guidance from Oregon’s Occupational Safety and Health Administration, OHCS developed a way to maintain social distancing through bunk style housing. OHCS also partnered with other state agencies to extend hotel vouchers for agricultural workers and in some cases install trailers on farm properties.

How has COVID-19 changed OHCS as an organization?

Like many housing organizations, COVID-19 has reaffirmed OHCS’s understanding of the critical importance of stable, secure and sustainable housing for all households. As the pandemic laid bare gaps in services, funding and planning across the country, OHCS finds itself a changed agency, more committed than ever to overcoming big challenges to deliver meaningful progress in the areas of racial equity, homelessness and affordable housing.

As the organization looks to 2021 and considers what a post-pandemic landscape will bring, it recognizes going back to the way things used to operate is not an option. OHCS’s experiences during COVID-19 reveal just how essential it is to make the individual’s needs central to the delivery of all social services, from workforce benefits to health and housing. As OHCS moves forward, it plans to develop even stronger interagency partnerships at the federal and state level to build a social safety net that truly meets Oregonians wherever they are at.

Spotlight: A Conversation with Eddie Latimer, CEO of Affordable Housing Resources

Since the outbreak of the COVID-19 pandemic, more than 4 million homeowners have been placed into forbearance plans – either through private-sector lenders or through the CARES Act forbearance program available to homeowners with federally-backed mortgages. Navigating the process, which begins when a homeowner is faced with the first mortgage payment they cannot make, can be incredibly stressful and confusing. That’s where Affordable Housing Resources (AHR) comes in. 

Nashville, Tennessee’s oldest nonprofit housing organization, AHR, has been laying a foundation for successful homeownership for 40 Middle Tennessee counties for more than three decades. Drawing on the organization’s experience with the National Foreclosure Mitigation Counseling (NMFC) Grant mandated by Congress in the wake of the 2008 financial crisis, AHR has outlined a new COVID-19 program to take homeowners through the entire forbearance process, including communicating with their mortgage servicer, gathering the necessary documentation and understanding what happens next. 

While there is already a strong need for forbearance programs, the demand is likely to surge in the coming months as long-term unemployment and recessionary economic conditions wear on household finances. As the housing sector attempts to manage millions of forbearances and avoid millions of foreclosures, nonprofits, homeowners and policymakers will need to work together, leaning into partnerships like those facilitated by programs like AHR’s.  

The National Housing Conference spoke to AHR CEO Eddie Latimer about how the organization, on the heels of the devastating tornado outbreak in March, quickly mobilized its COVID-19 Mortgage Forbearance Program to address some of the common challenges faced by homeowners and mortgage servicers during the loss mitigation process.  

What kind of foreclosure prevention support has AHR historically provided and how has that changed in recent months?

AHR provides foreclosure prevention services to help homeowners facing crisis situations remain in their homes. The organization has helped more than 4,000 low-income homeowners preserve their homeownership. When the state was hit with the EF4 tornadoes in early March, AHR mobilized its homeowner support to help struggling families and individuals connect with their mortgage servicers and other housing and disaster resources. Just a few weeks later, the COVID-19 pandemic swept the country. Tennessee’s stay-at-home orders began in early April and since then the unemployment rate in the state has remained above 10%

Successful homeowners are now being challenged to preserve their homes in this environment. Workforce homeowners are at a higher risk of foreclosure, as they are less able to afford common forbearance workout plans, such as short-term repayment plans, that may be offered by mortgage servicers. To respond to the surge in demand for homeowner support across all populations and foreclosure prevention, AHR established its COVID-19 Mortgage Forbearance Program, which provides free assistance to homeowners struggling to make their monthly mortgage payment because of recently-incurred financial hardship. The alternatives for Tennesseans are to hire an attorney, who typically charge around $2,000 to perform the work AHR offers for free, or to go through the process alone. Although the CARES Act requires mortgage servicers to offer a 180-day forbearance with the option for a 180-day extension, the process remains ambiguous and subjective with inconsistent results. Homeowners who negotiate on their own may be responsible for paying back deferred payments in one lump sum, putting them in a worse financial situation than they started in. AHR’s program launched to help low- to moderate-income and rural homeowners across the state of Tennessee stay in their homes and avoid costly errors by serving as a partner throughout the entire process.

How does the COVID-19 Mortgage Forbearance Program work?

AHR has developed a model that places a trained nonprofit representative in the middle of the forbearance process, working as a liaison between the mortgage servicer and the homeowner. Building off AHR’s experience during the last foreclosure crisis working with distressed homeowners through NFMC, the organization’s staff understands that having a knowledgeable advocate and coordinator can mean the difference between a homeowner remaining in their home and foreclosure. 

The program is designed to ensure that homeowners achieve the best outcomes from the forbearance process and avoid expensive fines, damage to their credit and, most importantly, foreclosure. Beginning with the initial request for forbearance and covering all the way through to the final workout option, AHR’s five-step program is designed to support homeowners through key milestones in the forbearance process. The program is designed to be applied by qualified housing nonprofits, including AHR. 

Does AHR plan to expand the program?

AHR’s program is just beginning to ramp up now. Although the organization has not yet seen a high volume of calls, it expects demand to ramp up significantly, particularly after Aug. 31, 2020, due in part to the expiration of foreclosure moratoriums, but also in part to the bottleneck created by homeowners and mortgage servicers that have not been able to come to a workable resolution during the time that has elapsed.  

To support an anticipated increase in demand, the organization has lined up a team of five staff members experienced in mortgage servicing and foreclosure prevention through NMFC. AHR hopes to expand the program’s adoption across other housing nonprofits that serve Tennesseans. 

The organization is currently working on a proposal for the state of Tennessee to commit $10 million in near-term funding to support a select group of housing nonprofits to implement the program. These nonprofits, under AHR’s supervision, would continue to provide services free of charge to homeowners, while charging a fee for work performed to the state. The proposal, which has minimal financial risk for the state, would amplify nonprofits’ ability to help homeowners avoid unnecessary foreclosures and the ripple effects such actions have on households and communities in the years that follow.

How can interested homeowners get connected with AHR?

Many of the first homeowners AHR has worked with, as part of the COVID-19 Mortgage Forbearance Program, were homeowners impacted by the March tornados or distressed households that have been referred to the organization by friends and family.

AHR has set up a new page on its website dedicated to helping Tennessee homeowners impacted by COVID-19. The site refers homeowners to AHR’s contacts for housing counseling and provides contact information for who to get in touch with to enroll in the COVID-19 Mortgage Forbearance Program. AHR has also shared the program details on social media accounts, including the organization’s Facebook and Twitter.

What are some of the common pain points for homeowners during the forbearance process and how is AHR addressing those?

The forbearance process – even without the addition of a global pandemic and economic crisis – is complex, time-consuming and confusing. Many of the homeowners AHR works with have little to no knowledge into the nuances of mortgage servicing and are, understandably, anxious about speaking to financial services professionals about their inability to pay their mortgage payments. AHR handles this process on the homeowner’s behalf and is able to translate the different steps and requirements into layman’s terms, allowing homeowners to make sustainable financial decisions with confidence. 

Many of the homeowners AHR has worked with do not have the time to sit on the phone on hold waiting to speak to someone in a servicing call center in the middle of a workday. Some of the homeowners who have participated in AHR’s COVID-19 Mortgage Forbearance Program have spent as many as three hours on hold trying to get through to a servicing representative. This is the time that most low- to moderate-income workers, who are already facing financial hardship, don’t have to spare during normal working hours. 

Even once they get through to someone, homeowners may be transferred to different staff and multiple departments, may have to repeat questions or even have their calls dropped. AHR avoids these pitfalls by connecting directly with the relevant staff and having all of the necessary information prepared ahead of time. 

Following the initial 180-day forbearance, the loss mitigation process can get quite complicated, involving detailed documentation and information that many homeowners may have difficulty obtaining. AHR helps homeowners collect the necessary documentation and then submits those documents to the mortgage servicer and follows-up accordingly. AHR program streamlines the pain points at every stage. 

Are there any common problems mortgage servicers are experiencing? 

Overnight, mortgage servicers have been tasked with supporting millions of distressed homeowners, whose finances and employment have changed dramatically and suddenly. The volume of calls mortgage servicers are receiving right now is almost unmanageable. In this kind of environment it’s easy for mistakes to be made and homeowners to fall between the cracks. The process can be frustrating for mortgage servicers and homeowners alike, which doesn’t serve any party’s benefit. AHR and other housing nonprofits can play a key role in alleviating some of the stress by doing the leg work to help both sides of the process achieve positive outcomes.  

What advice or insight would be beneficial for mortgage servicers or policymakers to hear about how the forbearance process is going on the ground?

This is only the beginning of what is going to be a long period of loss mitigation. Most of the homeowners AHR has worked with so far are just now finishing up the initial 90-day forbearance period and that’s when the real work begins. AHR expects the intensity of work and the volume of homeowners to increase as more households grapple with the effects of long-term unemployment and an economy in recession. The work ahead is going to require a coordinated effort from mortgage servicers, nonprofits, homeowners, political leaders, policymakers and community organizations. Everybody involved in the system is going to have to work together; it is in everyone’s best interest. It’s a good time to reflect on the lessons learned from the foreclosure crisis that followed the 2008 recession and its impact not only on individual households, but on banks left with vacant, deteriorating assets and communities stricken with widespread blight. 

Spotlight: A Conversation with Oji Alexander, Executive Director, Home By Hand

The COVID-19 pandemic has thrown countless households across the country into a crisis, with decades-high unemployment figures, unexpected health costs and the shuttering of local businesses. Renters are particularly vulnerable to the effects of this crisis, unable to fall back on the stability provided by homeownership. The ability to accrue equity over time and access forbearance and loss mitigation options are just a few of the larger benefits of homeownership that come together to form a financial safety net for homeowning households. 

Helping minority and low-income households, who often face more obstacles to homeownership, become mortgage ready and purchase an affordable, quality home has been the goal of Home by Hand long before the onset of COVID-19. This New Orleans based nonprofit affordable housing developer has been helping individuals and families tap into the financial stability provided by homeownership – benefits that are clearly underscored in today’s uncertain environment. 

The National Housing Conference spoke to Home by Hand Executive Director Oji Alexander about how the organization and the people it serves have been affected by COVID-19 and why their affordable homeownership mission is as important as ever. The discussion has been edited and paraphrased for brevity. 

Homeowners in front of their new houses built by Home By Hand in 2019

What is Home by Hand’s mission?

Recognizing the powerful wealth generating effects of homeownership, Home by Hand strives to create affordable homeownership opportunities for low- and moderate-income New Orleanians. Whether through new construction or the redevelopment of vacant and abandoned homes, the organization plays an active role in building neighborhoods of opportunity throughout the New Orleans area.  

Relying on a network of partnerships across lenders, contractors, architects, and state and local agencies, such as Crescent City Community Land Trust (CCCLT) and the New Orleans Redevelopment Authority (NORA), Home by Hand’s program is designed to maximize development and lending opportunities for the construction and financing of affordable homes for families and individuals who may not otherwise have an opportunity to purchase a home. Every year, the organization builds between 10 and 15 homes that are sold to eligible low- and moderate-income homebuyers.

How does that mission serve the community? 

Particularly in the wake of an unprecedented global pandemic and civic unrest, Home by Hand’s work to reduce racial inequality and slow the conversion of homeownership housing to rental housing plays an important role in stabilizing and revitalizing local communities. 

A historic lack of reinvestment capital into low- and moderate-income neighborhoods has exacerbated racial inequalities in homeownership and household wealth over time. This lack of investment has created a favorable environment for large rental portfolios that purchase foreclosed homes and convert those homes into often poorly-maintained rental housing, undermining quality of life and contributing to declining property values. Home by Hand is working to combat this trend by investing in quality affordable homeownership housing across multiple neighborhoods in New Orleans. 

Home by Hand often works with households that already rent in the neighborhoods where they are developing homes; this advances the organization’s goal of keeping communities in place. By relying on a pre-sale homebuying model, Home by Hand is able to serve a demographic that would otherwise be outcompeted in the housing market. 

How does that mission serve local households?

Home by Hand’s program, which places 10 to 15 individuals and families into quality, affordable homes every year, demonstrates the value and often-overlooked affordability of homeownership, particularly in areas of the country like New Orleans. The organization consistently maintains a robust pipeline of over 100 applicants – a testament to the unwavering demand for affordable housing from households throughout the area.  

Harvard University’s Joint Center for Housing Studies reports that New Orleans renters find themselves just as cost-burdened as renters in notoriously expensive markets, like Los Angeles. The affordability of homeownership compared to the relatively high cost of renting in New Orleans adds to the long list of benefits traditionally associated with homeownership, which includes tax advantages, the accrual of home equity, stronger community ties, greater civic engagement, lower crime, improved academic performance and better health outcomes. 

While the global pandemic has shaken the economy and healthcare system, the safety net provided by homeownership remains available to homeowners who may be able to tap into equity or lower their monthly mortgage costs through refinance. Homeowners also have the option to work with their mortgage servicer if they’re unable to make their mortgage payments. This stands in contrast to renters unable to pay their rent, who have fewer remedies to reduce monthly expenses and are more likely to face eventual eviction.  

New Orleans Housing Affordability At-A-Glance 
Salary required to purchase a home at the median sales price with a 10% down payment in New Orleans in 2019$45,000
Salary required to purchase a home at the median sales price with a 10% down payment in US in 2019$56,000
Share of cost-burdened renters (paying more than 30% of income on rent) in New Orleans in 201856% – 63%
Share of cost-burdened renters in US in 201847%
Average share of cost-burdened homeowners in New Orleans from 2014 – 201834%
Source: National Association of REALTORS®, Harvard’s Joint Center for Housing Studies and HousingNOLA 

How has COVID-19 impacted the organization’s operations?

As far as physical operations, the organization was well-positioned to transition to work from home. From a strategic standpoint, however, the Home by Hand team had to pivot to new areas of need brought on by the pandemic. 

The organization was able to stabilize its cash flow by applying for a Small Business Administration (SBA) Paycheck Protection Program (PPP) loan. The funding, quickly provided by a small local bank, was a “life saver.”

With residential construction identified as an essential service, Home by Hand was able to stay largely on schedule with its construction projects. Conversely, the organization experienced major disruptions in the usual financing process.

How has COVID-19 changed how the organization works with prospective homebuyers?

Home by Hand uses a pre-sale side model of homebuying, coaching prospective homebuyers until they are mortgage ready and engaging in homeowner education. The organization helps prospective homebuyers improve their credit scores and build their savings in advance of beginning the mortgage process. 

Once program participants are mortgage ready, the organization works with a few specific lenders, predominantly smaller local banks, whose underwriting and lending criteria can accommodate Home by Hand’s participants and its unique financing model, which usually combines a Federal Housing Administration (FHA) insured mortgage, subsidies, and a forgivable third mortgage.   

The pandemic, however, shifted the immediate focus of the organization to those individuals and families in the midst of the mortgage underwriting process, as well as to existing homeowners that Home by Hand has worked with in the past. 

At the onset of COVID-19, Home by Hand had four homebuyers ready to close on four of its properties. All four buyers were impacted by the economic fallout of the pandemic and lost their jobs. Three of the borrowers eventually regained employment and were able to resume the mortgage process and purchase their home. One of the buyers, however, was disqualified because of the tightening in underwriting that resulted from changes in the larger economy. 

As homebuyers moved to the contract signing stage, Home by Hand was concerned about people’s willingness to sign contracts remotely, but this did not pose an issue for any of the homebuyers. 

How has COVID-19 changed how the organization works with existing homebuyers?

Home by Hand’s homebuyer education model typically provides all of the post-sale information that homebuyers need before the purchase occurs. From maintenance recommendations, termite seminars and post-sale stewardship guidance, homebuyers that work with the organization are usually amply prepared for responsible homeownership. 

COVID-19 has redirected more of the organization’s efforts to its recent homebuyers. Home by Hand is creating new resources to educate homeowners on how to convert their wealth and equity into usable income and directing homeowners to other valuable outlets for helpful information and guidance. The organization has reached out to all of its recent homebuyers to see if they are still employed or have difficulty making payments and is working diligently to prevent any foreclosures. 

Are there any lessons to be learned from COVID-19 and its impact on households?

Although so much has changed over the past few months, one thing has not: the need for affordable homeownership opportunities, in New Orleans and in communities across the country. COVID-19 has revealed that those households without wealth, in the form of home equity or financial savings, are far more at risk and lack a financial safety net. 

Investing in constructing and rehabilitating quality homes, preparing households for homeownership, and connecting homebuyers to creative, but responsible, financing options can have a profoundly positive impact on the long-term financial stability and overall well-being of individuals and families and the communities they live in, ensuring they are able to weather this pandemic, as well as future crises. 

As life slowly returns to normal, Home by Hand is continuing to advance its mission. The organization has 13 new energy-efficient, storm-resistant construction projects underway and is accepting applications for 10 new homes.