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Transcript of Cheryl Cassell | HCT Training
Providing Housing Counseling and Direct Services for Homeowners Transitioning from Homeownership to Rental Housing
PROVIDING HOUSING COUNSELING AND DIRECT SERVICES TO HOMEOWNERS TRANSITIONING TO RENTAL HOUSING
Cheryl CassellDirector-Housing Counseling Network
Dr. Jade K. BrightlyFounder- Global Soulutions
April 18, 2012
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing Presentation Title Here
Housing Landscape
Fair Housing Act
Landlord Tenant Rights
Rental Process
Important Documents
Transitioning from Homeownership to Rental
Renting versus Owning
Neighborhood Stabilization and Real Estate Owned Properties
AGENDA
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The United States grew by 0.5 million households from 2008 to 2009.
Renter households grew (+0.9 million).
The number of homeowners fell (-0.4 million).
According to Fannie Mae, renters believe that buying a home is a safe investment while 75% of renters still agree that owning a home makes more financial sense than renting.
Source: National Realtors Association
National Findings
Housing Landscape
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Working households, with a severe housing cost burden, increased significantly in 25 states across the nation while no states significantly decreased.
2009, housing cost represented a severe burden for at least one in 10 households in every state in the US and exceeded 30% in a handful.
Housing cost burdens worsened significantly in four states Oklahoma, Missouri, Minnesota, and Indiana.
Source: National Realtors Association
State Findings
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
2008 and 2009, Arizona, California, Florida, New Jersey, and New York share of cost-burdened working households exceeded the national average and experienced a statistically significant increase.
The share of working households with a severe housing cost burden in Florida and California (33 percent) is nearly three times the rate observed in North Dakota and Iowa (12 percent).
The share of working households with a severe housing cost burden in Florida and California (33 percent) is nearly three times the rate observed in North Dakota and Iowa (12 percent).
Source: National Realtors Association
State Findings
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Higher income earners are experiencing affordability problems.
Earners between $45,000 and $60,000 pay more than 30% their incomes on housing
46.2 million households spends 50% on housing costs
Source: Harvard Joint Center for Housing Studies
Housing Affordability Trends
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
25% of working renters have housing cost burden.
Housing affordability has worsened for renters than for owners.
Four out of five working households, with extremely low incomes, had a severe housing cost burden in 2009.
Source: Harvard Joint Center for Housing Studies
Housing Affordability Trends
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
In 2008, homeownership rates decreased from 66.6% to 65.9% due to:
Foreclosure crises
High unemployment
Government downsizing
Tight lending standards
Stringent credit challenges
Source: Harvard Joint Center for Housing Studies
Shift in Demand for Homeownership
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The number of owner households fell by 201,000 annually.
Two trends underlie this shift: The rising number of renters who have
deferred home buying, and
the rising number of owners who have switched back to renting.
Source: Harvard Joint Center for Housing Studies
Recovery of Rental Demand
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Housing Vacancy Survey indicates that the number of renters swelled by 3.9 million from 2004 to 2010.
The rental market has gained strength over the past year.
By 2020, minorities are expected to make up a third of all U.S. households.
Hispanics alone will contrib ute nearly 40% of the increase.
Source: Harvard Joint Center for Housing Studies
Recovery of Rental Demand
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental HousingAdd Presentation Title Here
The Fair Housing Act, 42 U.S.C. 3601 et seq.,
Prohibits discrimination by direct providers of housing,
Such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions
and homeowners insurance companies whose discriminatory practices make housing unavailable
FAIR HOUSING ACT
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental HousingAdd Presentation Title Here
The Act is applicable to:
Race or color
Religion
Sex
National Origin
Familial Status
Disability
Fair Housing Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental HousingAdd Presentation Title Here
The Department of Justice can bring a lawsuit:
•In cases involving discrimination in mortgage loans or home improvement loans,
•May file suit under both the:
•Fair Housing Act and
•The Equal Credit Opportunity Act.
Fair Housing Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental HousingAdd Presentation Title Here
• Under the Fair Housing Act, the Department of Justice may bring lawsuits:
• where there is reason to believe that a person or
• entity is engaged in a "pattern or practice" of discrimination or
• where a denial of rights to a group of persons raises an issue of general public importance.
Fair Housing Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Ways an individual can file a discrimination complaint:
Department Of Housing and Urban Development (HUD)
Federal Court
State Court
Fair Housing Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housingdd Presentation Title Here
• The majority of DOJ’s pattern or practice cases involve claims of race discrimination.
• False information about availability of housing.
• Steering home seekers to certain areas based on race.
• Fair Housing Testing Program
• Most mortgage lending cases brought by Department of Justice are under Fair Housing Act and Equal Credit Opportunity Act (which will be discussed later) have alleged discrimination based on race or color.
Housing Discrimination Based on Color
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Overt discrimination against members of a particular region.
Zoning ordinance designed to limit use of private homes as a place of worship.
The number of cases filed in 1968 alleging religious discrimination is small in comparison to other prohibited bases, such as race or national origin.
Discrimination in housing based on Religion
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housingd Presentation Title Here
Humiliation to women who are poor.
Degradation of sexual harassment
Pricing discrimination
Discrimination in Housing based upon Sex, including Sexual Harassment
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Fair Housing Act prohibits discrimination based upon national origin.
Such discrimination can be based either upon the country of an individual's birth or where his or her ancestors originated.
The Justice Department has taken enforcement action against municipal governments that have tried to reduce or limit the number of Hispanic families that may live in their communities.
The Department has also sued lenders for discrimination against Native Americans.
Discrimination in Housing based on National Origin
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Fair Housing Act, with some exceptions, prohibits discrimination in housing against families with children under the age of 18.
In addition to prohibiting an outright denial of housing to families with children, the Act also prevents housing providers from imposing any special requirements or conditions on tenants with custody of children.
Discrimination in Housing based on Familial Status
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
In most instances, the amended Fair Housing Act prohibits a housing provider from refusing to rent or sell to families with children.
However, some facilities may be designated as Housing for Older Persons (55 years of age). This type of housing, which meets the standards set forth in the Housing for Older Persons Act of 1995, may operate as "senior" housing.
The Department of Housing and Urban Development (HUD) has published regulations and additional guidance detailing these statutory requirements.
Housing Discrimination based on Familial Status
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Fair Housing Act prohibits discrimination on the basis of disability in all housing transactions.
Disability Defined-An individual with mental or physical impairment that substantially limits one or more major life activity.
Discrimination in housing based on Disability
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The ECOA prohibits discrimination in credit on the basis of:
Race
Color
Religion
National Origin
Sex
Equal Credit Opportunity Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental HousingHere
Marital Status
Age (provided the applicant has the capacity to contract)
Because an applicant receives income from a public assistance program or
Because an applicant has in good faith exercised any right under the Consumer Credit Protection Act
Equal Credit Opportunity Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Department of Justice may file a lawsuit under ECOA where there is:
A pattern or practice of discrimination
Cases involving discrimination in home mortgage loans or home improvement loans
Fair Housing Act and Equal Credit Opportunity Act
Equal Credit Opportunity Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Other federal agencies have general regulatory authority over certain types of lenders.
The regulators monitor creditors for their compliance with ECOA.
Referrals are made when there is a reason to believe that a creditor is engaged in a pattern or practice of discrimination with violates ECOA.
Other Federal Regulators
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Consumer Financial Protection Bureau has issued regulations under ECOA. These regulations, known as Regulation B, provide the substantive and procedural framework for fair lending.
The agencies and the types of creditors that they regulate for purposes of compliance with ECOA are as follows:
Other Federal Regulators
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Consumer Financial Protection Bureau (CFPB): Banks, savings associations, and credit unions with total assets of over $10 billion and their affiliates. Also shares enforcement authority with the Federal Trade Commission over mortgage brokers, mortgage originators, mortgage servicers, lenders offering private educational loans, and payday lenders regardless of size.
Other Federal Regulators
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Office of Thrift Supervision (OTS)-Savings associations and federally chartered savings bank (the word “Federal” or the initials “F.S.B.” appear in the federal institution’s name.
Comptroller of Currency (OCC)-National banks and federal branches/agencies of foreign banks (the word “National” or the initials “N.A.” appear in or after the bank’s name).
Other Federal Regulators
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Federal Reserve Board (FRB)-Financial institutions that are members of the Federal Reserve System, except national banks and federal branches/agencies of foreign banks.
Federal Deposit Insurance Corporation (FDIC)-State chartered banks that are not members of the Federal Reserve System.
Other Federal Regulators
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
National Credit Union Association (NCUA)-Federal credit unions (the words “Federal credit unions” appear in the institution’s name).
Federal Trade Commission-Retailers, finance companies, creditors (including most mortgage companies) that are not assigned to another agency.
Other Federal Regulators
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
SCRA provides for the temporary suspension of judicial and administrative proceedings and civil protections in areas such as housing, credit and taxes for military personnel while they are on active duty.
The Servicemembers Civil Relief Act, formerly known as the Soldiers’ and Sailors’ Civil Relief Act (SSCRA), is a federal law that provides protections for military members as they enter active duty.
Servicemembers Civil Relief Act
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Responsibilities of the Landlord:
Unit must be in habitable and livable condition
Unit and Complex must be safe
Duty to Make repairs
Landlord/Tenant Obligations
Landlord/Tenant Rights
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Responsibilities of the Tenant:
Rent
Repairs
Be a Good Neighbor
Landlord/Tenant Obligations
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Repairs
Eviction
Landlord Tenant Disputes
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Landlord insurance only covers their personal liability and the premises and common areas, as well as the physical building.
It is important to note that the landlord’s insurance does not cover tenant property, nor does it cover tenant’s liability to people injured in their home.
Rental insurance is highly encouraged. The monthly cost is low (around $10). Provides good coverage in the event of a fire, robbery, or other mishap. Some rental units even require residents to purchase renter’s insurance.
Renter’s Insurance
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Typical Renter’s Coverage
Types of Coverage
Renter’s Insurance Coverage
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Affordability
Client Qualification
Locating the Right Rental
Housing Options
Property Management or Privately Owned
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Complete Application
Provide a Security Deposit
Review and Sign Lease
RENTAL PHASE
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
• Review and Sign Lease
• Insurance
• Protect and/or Surveillance the Unit
POST RENTAL PHASE
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Provide rental counselors with comprehensive guidance and counseling services to clients seeking to move into a rental unit.
GOAL – To assist clients with moving into a comfortable, affordable rental home.
THE RENTAL COUNSELING PROCESS
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Perform intake Conduct needs analysis Create an action plan Discuss income and expenses Develop a budget and spending plan Affordability Review credit report Rental housing options; how to locate right unit Conduct a rental unit needs-versus-wants analysis Discuss the post-rental phase, including lease and move Make necessary referrals
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Intake - gather baseline information from client
Conduct accurate needs assessment
Document the household income and expenses
Determine household debt level
Review clients credit report
Identify credit challenges
Determine and document household savings
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Develop a household budget
Analyze budget and recommend modification
Conduct affordability analysis based on income and debt
Develop a written action plan with follow up
Make referrals for additional services
Provide client information on delinquency/foreclosure
services Source: www.homeownershipstandards.org
Guideline and Code of Ethics Reference Guide
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Educate – Provide a complete picture of the rental housing landscape and thorughly discuss each step in the rental process.
Inform - Set appropriate expectations when guiding the rental home search.
Listen – Be open to hearing what the clients truly want/need and make sure the clients know they are being heard.
Important Traits of a Rental Housing Counselor
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Be Empathetic – Clients, transitioning from one home to another, may be undergoing serious life changes. Be sensitive and work to establish trust.
Support – Be a source of secure informaiton and guidance, backing up clients’ decisions as much as possible.
Provide Options – Let clients make decisions for themselves in order to encourage a more sustainable housing situaiton and greater security.
Analyze – Determine the needs of each individual client and help to match these needs with the best housing options.
Important Traits of a Rental Housing Counselor
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Make Recommendations- Use your professional expertise to recommend the best options for your client.
Collaborate - Work in partnership with the client to
arrive at outcomes and make decisions. Work with other agencies to provide referrals and other assistance the client may need.
Be Available – Rental counseling can be complicated and lengthy. A counselor needs to provide support through the entire rental process.
Important Traits of a Rental Housing Counselor
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
How to Conduct an Intake Session:
1. Counselor gives an overview of the rental process
2. Counselor gathers information regarding the client’s current situation
Financial Information Housing situation Credit information
3. A physical file must be created for the above information and it must be entered into a client management system.
General Intake Action –
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
HUD requires certain specific record keeping protocol:
Client files must be maintained properly
All agencies are required to use a client management
system (CMS).
Privacy- all client information must be kept strictly
confidential.
File Retention Requirements- client files must be kept a
minimum of 3 years.
Minimum client file requirements are on page 7 of manual.Source – www.hud.gov- Housing Counseling Handbook
Record Keeping
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
One of the most important considerations when choosing a rental unit is based on a clients income and expenses.
Selecting a rental unit that is affordable in the long-term encourages greater security and housing sustainability.
To conduct an accurate analysis, the client should be able to accurately present past, present, and future earnings.
Landlords want to have valid documentation to determine if the tenant can pay the rent each month.
The budget analysis helps to secure the desired rental.
Budget Analysis
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Typical documentation needed to calculate income are:
Past 2 years of tax returns
Past 2 years of W-2’s
3 months of consecutive, current paystubs.
Budget Analysis
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Hourly Employee Formula:
Year-to-date income: $___/Number of pay periods to date____ =
Average income pay period: $___ x Number of pay periods per year:___ =
Subtotal $___ + any other income: $___ =
Gross annual income: $___/12 = Gross monthly income: $___
Income Calculations
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Salaried Employee Formula:
Weekly pay (or bi-weekly, semi-monthly, or monthly pay): $____ x
Number of pay periods remaining in the year: ____ = Subtotal: $ ____
+ Any other income: $_____ + Year-to-date income total: $ ____
Gross annual income: $____/12 = Gross monthly income: $____
Income Calculations
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Self-Employed Formula:
From IRS Schedule C, Line 31: $____
+ From IRS Schedule C, Part II, Line 12 (Depletion): $ ___ + From IRS Schedule C, Part II, Line 13 (Depletion): $ ___
Total: ____/ Total months business operation for the year: $ ___ =
Average monthly income per year: $____
Complete the above formula for multiple years and then average the gross monthly income.
Determine the gross annual income by multiplying by 12.
Income Calculations
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
A good rule of thumb –
Put at least 10% of net income into a savings account.
This builds a cash reserve and will earn interest.
A cash reserve can also be used for emergencies.
There are various types of savings accounts:
Traditional Savings Account
Online Savings Account
Money Market Account
Ceertificate of Deposit (CD)
Home Savings
Savings
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Check the box indicating if an expense is fixed or flexible
Fixed Flexible
vacation
student loans
school supplies
utilities
health
insurance
car payment
haircut
clothing
credit card
payment
Expenses Activity
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Budgets help to create realistic spending and savings goals. Budgets allow clients to see where money is going.
Budgets encourag the forming of new spending habits to create a secure financial life.
Clients must decide on a method to track their income and expenses. (www.mint.com is a free money management site)
Clients should select a method which is most comfortable . Notebook receipts binder Worksheets Quicken software Online
Budget
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Assume your client has the income and expenses listed in the budge below. Where would you propose the client cut expenses to make their budge more affordable?
Make these changes in the chart below.
Scenario- Mary works at the US Post Office and earns $45,000 Her husband, Joe works as an independent contractor His average grossly monthly income is $3,200 Their child attends daycare They have credit card debt/minimum payment of
$75/month Additional expenses listed
Where would you recommend the client make changes?
Budget Activity
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Factors to consider:
Prospective buyersNumber of children Occupations
Husband - Mechanic at a car dealership for 7 years Wife – full time teacher’s aid
Combined Gross Monthly Income Savings Debts
Determining Affordability
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Maximum Affordable Rent- no momer than 31% of gross income should go toward rent.
Factors to consider:
Prospective buyersNumber of children Occupations
Husband - Mechanic at a car dealership for 7 years Wife – full time teacher’s aid
Combined Gross Monthly Income Savings Debts
Determining Affordability
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
1. Application Fee
2. Security Deposit
3. First/Last Month’s Rent
4. Moving Costs
5. Utilities
Required Cash
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
1. Avoid a Credit Check
2. Submit a Letter of Explanation
3. Get a Letter of Recommendation
4. Pay Off Creditors
5. Get a Co-Signer
Credit Issues
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
6. Pay More Money Up-Front
7. Rent from an Owner
8. Get a Referral from a Current Tenant
9. Sublet a Rental Unit
Credit Issues
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The counselor completes the action plan after the initial client interview and all financial information is collected and discussed.
•The action plan contains the goals of the counseling process as well as the steps necessary to achieve those goals.
•Each action plan is unique because it addresses the clients needs. •HUD requires a copy of the action be included in the file.
•A copy of the action plan must be provided to the client.
Action Plan
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
• Discuss and list major obstacles to obtaining rental housing.
• Determine and list the best strategies for addressing the obstacles.
• Give the client specific actions to take before the next meeting or before proceeding with the next step in the rental process.
• List the ultimate outcome of the rental counseling.
• Have the client sign and date the action plan after discussing all items.
Action Plan Template:
A lease is a legally-binding document between a landlord and a tenant.
It is important that tenants read the lease carefully and understand all terms before they sign.
Leases can occassionally be "oral" or unwritten but usually in writing. Oral leases are harder to prove. It’s best to get the lease in writing.
Along these same lines, sometimes at the signing of the lease, the landlord will make oral promises or ask the tenant to agree to something. These should also be written onto the lease and initialed. This will help to discourage disputes later.
LEASE AGREEMENTS
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The landlord agrees to provide a clean, sanitary, vacant apartment and to make repairs.
You agree to pay the rent, keep your apartment or house clean, undamaged, and follow the rules of your lease.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
When you apply to rent a house or apartment, you apply to qualify for a lease.
The landlord requires you to fill out an application form and pay an application fee before you sign the lease.
The application requests information on:employment history credit references and often becomes part of the lease.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
When you apply to rent a house or apartment, you apply to qualify for a lease.
The landlord requires you to fill out an application form and pay an application fee before you sign the lease.
The application requests information on:employment history credit references and often becomes part of the lease.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Review the lease.
Get help for explanations.
Make sure the terms of the security deposit are clearly spelled out.
Get all promises for repairs in writing.
Initial changes to lease.
Ask your landlord to sign his or her initials next to each change.
Before Signing A Lease
After Signing A Lease
The landlord must give you an exact, legible, and signed copy of the lease and application within 7 days.
Always keep your lease, application, and other documents concerning your apartment or house in a safe place.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Breaking A Lease
Your lease is a binding contract .
Breaking the lease is a breach of contract and you could be penalized.
There are exceptions: Natural disasterCrimeMilitary dutySuffered health problems
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Homeownership Benefits
Renting can be about the same or less as paying a mortgage.
Home ownership offers tax benefits.
Tax benefits offer savings.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Monthly Expenses
Rental company’s cover certain housing expenses.
Homeowners pay housing expenses: Property Taxes and Special Assessments
Home/Hazard Insurance
Utilities
Maintenance
Home Owner Association (HOA) Fee
Membership Fee
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental HousingPresentation Title Here
Transitioning from homeownership to renting can be extremely difficult.
Housing counselors are essential in assisting homeowners who become delinquent on their mortgage and are facing foreclosure. Housing counselors can assist a homeowner explore all options.
The earlier in the process that a homeowner works with a housing counselor, the more options and potential outcomes are available.
Transitioning from Rental to Homeownership
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Loan Modifications and Foreclosure Alternatives
Making Home Affordable Options
Transition Options
Real Estate-Owned Properties
Transitioning From Homeownership to Rental
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Deficiency Judgment
Tax Implications of Short Sales, Deeds-in-Lieu and Foreclosures
Credit Implications of Short Sales, Deeds-in-Lieu and Foreclosures
Helping Clients Rebuild Credit after a Transition
Transitioning from Homeownership to Rental
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Renting Versus Owning
The renter starts out paying $800 per month with annual increases of 5%.
The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Buying Versus Renting
After 6 years, the homeowner's payment is lower than the renter's monthly payment .
With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Advantages of Buying
Property builds equity.
Sense of community, community, stability and security.
Free to change landscaping and décor.
Not dependent on landlord to maintain property.
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Considerations of Buying:
Responsible for maintenance
Responsible for property taxes
Possibility of foreclosure or loss of equity
Less mobility than renting
Advantages of Renting:
Little or no responsibility for maintenance
Easier to move
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Considerations of Renting:
No tax benefits
No equity is built up
No control over rent increases
Possibility of eviction
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Neighborhood Stabilization and real Estate Owned Properties
Provides grants to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes.
The NSP program is authorized under Title III of the Housing and Economic Recovery Act of 2008.
Source: www.hud.gov
The Neighborhood Stabilization Program (NSP)
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
The Neighborhood Stabilization Program (NSP)
The REO Portal supports more
efficient disposition of REO properties to support the stabilization of neighborhoods and recovery of local housing markets by enabling a neighborhood-focused, strategic approach to acquisition.
Source: www.hud.gov
Providing Housing Counseling And Direct Services To Homeowners Transitioning To Rental Housing
Real Estate Owned (REO) Properties
These foreclosed homes collectively
account for nearly half of all real estate-owned or REO properties in the U.S.
HUD’s REO gives a comprehensive view of housing opportunities.
The REO listing includes properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
Source: www.hud.gov
THANK YOU!
To follow up with the speakers:Cheryl CassellDirector-Housing Counseling [email protected]
Dr. Jade K. Brightly202-756-1838brightlyjk@globalsoulutions.bizwww.GlobalSoulutions.biz
Presentations will be available at www.ncrc.org/conference by April 30, 2012