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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.