Habitat Hope:
“Farm Team for the Pipeline ”
Traci Odom,
Habitat for Humanity
Detroit
1
Purpose of Hope
Program for families who want to become
homeowners but do not qualify due to financial
problems (low credit score, high debt, etc.)
Provides a structured opportunity for families to
resolve their financial problems (have Hope!)
Creates a feeder of potential families for the pipeline
Thus, our Farm Team!
2
Background of HFHD Hope Program
Started in 2005 by previous Family Selection Director but no
formal guidelines/structure
Counseling outsourced to Donni’s Door in 2007
Since 2007 … 56 applicants invited to participate in Hope
Since 2008 … 7 current Habitat Homeowners completed Hope
YTD 2011… 53% Family Partners currently in pipeline have
completed or are participating in Hope now
3
Qualifications for Hope
Credit score 40%
D/I = car payments + credit card payments + loans
(other than medical/school) + $600-$650 mortgage
monthly income
5
Process – Getting into Hope
Applicant is mailed letter with agreement to sign
Applicant sends in agreement with $50 money order
Applicant’s info is sent to Debt Counselor
– Credit report and items to be addressed while in Hope
Debt counselor schedules one-on-one with participant
Debt counselor develops action plan for participant
6
Process – While in Hope
Participant works towards completing action plan
– increase credit score, reduce debt, reduce D/I ratio, etc.
Participant attends monthly classes with Debt
Counselor
Participant earns sweat equity for each class
attended
– Two (2) hrs/class/applicant
– Currently max of 12 hrs for single applicant; 24 for joint
7
Process – Getting out of Hope
Participant provides new tri-merged credit report
showing objectives met
Participant provides updated pay information
Participant goes onto next step of Home Visit
Participants are expected to complete Hope within
12 months
8
Changes Made to Program
Hope fee ($50) implemented ~ 2009
– Participants were using services but weren’t committed to
the homeownership process with Habitat
Increased upper debt limit to increase pool of
participants
– Range used to be $1501- $2500; now up to ~ $4000
Hope in conjunction with Homeownership Process
– Some participants are being approved as Family Partners
while still in Hope
9
Opportunities for Improvement
Sweat equity:
– Earn up to 2 hrs/class for attending classes with Debt
counselor (working well; keeps family partner
motivated)
– Earn while working sweat equity other than program
(difficult to manage/coordinate and complete action
plan)
participant is eligible to begin sweat equity when 540
score and/or debt reduced to $1600 (original guidelines)
10
Benefits to Applicants
Credit repaired
Earn sweat equity hours
Receive additional
financial training
Get ½ of fee back ($25)
towards closing costs
One step closer towards
homeownership
11
Benefits to Habitat
Creates additional pool of
families for pipeline
More committed applicants for
homeownership process
Reduces number of application
denials due to debt
Participants that have completed
Hope have less debt to pay off
during homeownership process
12
Farm Club Specifics
-Counselor is certified -Family partners get
via NeighborWorks head start on financial
-Counselor fee is literacy training
$25/hr. -Counselor provides a
-Resources used: office monthly report on
space; copier; paper each Hope
participant’s progress
13
Contact Information
Traci Odom, HFHD
14325 Jane St.
Detroit, MI 48205
313.521.6691 x119
todom@habitatdetroit.org
14
Questions
15