Twin Cities Habitat for Humanity has long been synonymous with construction, the sound of hammers and the smell of wet paint.
But the charity’s mostly volunteer workforce couldn’t build and rehab houses fast enough to keep up with the booming demand. So Habitat leadership decided to help families buy existing homes instead.
The nonprofit’s new Open Market program has helped 31 families buy homes since its launch a year ago. An additional 34 families have been preapproved for the program and are out shopping.
“I am really encouraged about the success of that program and the speed at which we are able to get more families into homeownership,” said retiring Habitat CEO Sue Haigh. “Everything changes for a family once they own a home.”
By offering more paths to homeownership — buy a newly built home, buy a rehabbed home owned by Habitat, or work with a real estate agent to buy a home on the market — Habitat for Humanity hopes to double the number of families it houses each year, from 50 to more than 100.
“Our families love that they have a choice,” said Robyn Bipes-Timm, vice president of loan fund and mortgage lending. “They can now find a home in any community and any school district. A lot of low- and moderate-income people don’t feel like they have much choice.”
As with all Habitat beneficiaries, families who go through the Open Market program must save money and go through financial literacy and homeownership classes. After that, they can qualify for a mortgage through a Habitat subsidiary, which offers more flexible loan requirements than traditional lenders.
Then, the Open Market families connect with a real estate agent and start shopping within the budget set by their Habitat mortgage. The charity does not require a down payment and helps families cover part of the closing costs.
Families can find a move-in ready home or they can find a house that needs fixes and use part of their budget to cover the mortgage and repairs.
Bipes-Timm said the families Habitat helps are working, but qualify for help because they make 30 to 80 percent of the median household income, which is about $90,400 per year for a family of four.
Help in a hot market
The Open Market program, made possible because Bremer Bank has agreed to purchase as many as 500 below-market Habitat mortgages over four years, launched during one of the toughest real estate markets in years.
Booming demand, scant home inventory and rising prices have all posed challenges to buyers.
“It’s a hot market,” said Bipes-Timm, noting that most home sellers are fielding multiple offers, often above asking price. “Families are having to shop for awhile and whittle down their wish lists.”
But a growing number of home sellers like the idea of selling to Habitat families, she said, so offers are often accompanied by personal letters explaining the situation.
Kera LaSure said she believes it was her persistence, her personal letter and an impromptu meeting with the seller that helped her buy her Maplewood split-level house last summer.
She proudly gave a tour of her new home with a bright eat-in kitchen, formal dining room and a den with a fireplace. Her 2-year-old daughter, Thalia, trotted close behind, showing off her bedroom.
LaSure has had the same job in the insurance industry for two decades. But a divorce that corresponded with the recession left her finances and credit in shambles. She rented a townhouse for several years but worried the neighborhood wasn’t the best environment for her four children. She started exploring ways she could buy a home and that’s when she found out about Habitat for Humanity’s Open Market program.
“Having a choice is huge,” she said. “It was the difference between, ‘That will do,’ and ‘I have to have this!’ ”
LaSure whizzed through all the paperwork and Habitat training courses. She also saved a $7,000 nest egg — Habitat requires all its buyers to have a rainy day savings account. Then she started shopping for a single-family house for $250,000 or less.
“Unfortunately, that’s what everybody else in the metro is looking for,” LaSure said.
Confidence to succeed
She made offers on several houses but lost out to other buyers. At the Maplewood house, LaSure and her boyfriend arrived to the showing early and met the owner in the driveway. They struck up a conversation and took a tour of the property with the owner.
LaSure put in an offer on the house — above asking price — within hours of seeing it and wrote a heartfelt letter to the seller explaining why she wanted the house.
“I was so nervous. I couldn’t even eat,” she said.
LaSure closed on the house last summer and her boyfriend, Angelo Mims, helped her finish the lower level so all the children can have their own bedrooms. She said the Habitat for Humanity courses and guidance made her feel confident that she could succeed as a homeowner.
“They make sure you are equipped and you don’t get into something you can’t handle,” LaSure said. “They invest in your success.”