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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. 

Spotlight: Mercy Housing

As one of the nation’s largest affordable housing organizations, Mercy Housing is a leader in the development, preservation, management and financing of service enriched, affordable housing for low income households across the country. 

Mercy Housing’s commitment to service enriched housing stems from their belief that people need more than just a place to live to have a stable life. As a result, they have built a strong resident services platform to provide a wide array of programming for residents to help improve their health, wellness and financial stability.

At the start of the COVID-19 pandemic, Mercy Housing quickly leveraged its resident services platform to provide critically needed assistance specific to the needs of the residents in their properties across the country.

We chatted with Laura Andes and Kate Peterson, Mercy Housing’s senior vice presidents of national resident services and communications to discuss some of their best practices and lessons they have learned during the pandemic. The following is our conversation edited for brevity.

How did having an existing resident service platform help you respond quickly to the pandemic?  

Immediately, we began a program where our resident service staff called residents on a daily basis. Having an existing platform meant that our staff had existing relationships with the residents prior to the pandemic. That mattered a lot because people were more likely to pick up the phone and more likely to open up and talk about what was going on in their lives. These conversations allowed us to develop a better understanding of emerging needs so that we could respond more quickly to the immediate and sometimes unique needs of each property. It was also hugely important for many of the senior residents to remain connected during this period of social isolation.

What were some of those immediate needs and how were you able to respond?

Mercy Housing staff preparing to distribute food at one of their seniors housing properties

Because we have so many properties in California and Washington, we began to adjust programming in late February to early March. We immediately stopped all in-person programs, closed down community rooms and began our phone outreach program where we quickly learned that the most immediate need was food insecurity. Because we could quantify this need so quickly, we were able to receive emergency funding from private donors and foundations to buy more food. In Seattle, we worked with local restaurants to purchase their unused food and later scaled up this initiative through a partnership with Bank of America. Additionally, our relationship with Microsoft led to them donating meals that would have normally been prepared [in] their cafeteria to us.  

Read more about how partner organizations are helping Mercy Housing fund their food insecurity efforts here.

As you continue to stay in touch with residents, how have you been able to adjust your services to support their needs?

Once layoffs started occurring, it became clear to us from our phone calls that residents were going to need help obtaining unemployment insurance, stimulus payments and extended SNAP benefits.  We were able to get our resident service staff members the training they needed to help residents access those benefits as quickly as possible.  

Has the pandemic highlighted any areas that you would like to focus more on going forward?

Accessing digital technology has been a huge challenge. We have computer centers at many of our properties for residents to access the internet. When we shut those down, many of them lost their ability to go on-line. The digital divide has had an impact on all residents, especially school-age children who have now transitioned to remote learning. We are working to identify which children need computer and Wi-Fi access so that they are able to keep up with their schoolwork.  

Read more about how Mercy Housing is enabling digital access for their residents.

How have your partnerships elevated your work?

Having an existing resident service platform meant that we had already built many community and business partnerships in the towns and cities we operate in. It was pretty remarkable when the pandemic broke out that those partners said, “how can we help?” before we said, “can you help us?”

How have your staff and residents adapted to changes?

The creativity and innovation of our staff has been incredible. In one senior property, our staff organized “hallway bingo” games where residents sit in their doorways and play. Some are doing balcony singalongs. Our Out-of-School Time (“OST”) program has an Instagram feed and they’re putting daily recorded videos on their Instagram feed for their kiddos to do. We are now seeing residents who never showed up to programming before participating, allowing us to develop relationships that maybe wouldn’t have been formed prior to the pandemic. We take that engagement in our programs as one more sign that the work we are doing is making a difference.

Three takeaways and a challenge

Having an existing resident service platform across their properties is helping Mercy Housing respond more quickly to the needs of their residents during the COVID-19 pandemic.  Specifically, this has allowed them:

  1. Leverage the trust they established between staff and residents prior to the pandemic to engage more deeply with their residents.
  2. Building off their existing relationships with community service providers to help provide funding and services needed at the properties.
  3. Utilize data collection to make it easier for them to assess, track and quantify the need for services and grant funding.

One of the biggest challenges Mercy has faced is providing digital access for residents.

In addition to being an NHC member, Mercy Housing is also a member of the Stewards of Affordable Housing for the Future (SAHF) and has worked with other SAHF members to build a certification program for resident service providers.  For more information about building a resident service platform, visit the CORES website.

If you’d like to learn more about Mercy Housing Resident Services, click here. You can also listen to Cinnaire’s podcast interview with Mercy Housing on how they are responding to COVID-19 here.