Milwaukee is among the leading contenders for a concerted public-private onslaught of modest-income housing innovations, an official from mortgage financing giant Freddie Mac said.
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Speaking to several dozen housing industry representatives at a community lending conference, Craig S. Nickerson, vice president of community lending for McLean, Va.-based Freddie Mac, or Federal Home Loan Mortgage Corp., called homeownership “a means to an end. What we’re really doing here is eliminating poverty and empowering people.
“You might suggest the real issues are crime, unemployment, poor education and the fraying of the social fabric,” he told conference attendees at Milwaukee’s Italian Community Center.
“Homeownership creates wealth: The average homeowner has $80,000 in assets; renters average less than $5,000. The average net worth of African-Americans, who have low homeownership, is $4,000; the average for whites is $40,000.”
Through a proposed alliance with the City of Milwaukee and housing-advocacy groups, such as New Opportunities for Homeownership in Milwaukee, which sponsored the conference, the program would, according to Nickerson:
– Buy “purchase-rehab” loans at the time of purchase, instead of after rehabilitation, giving borrowers loans of as much as 120 percent of a house’s value with a 3 percent down payment.
– Establish a “one-stop shopping” homeownership center in the city to make it easier for first-time home buyers to obtain information.
– Offer low down payments, landlord training and rent calculations for duplex buyers.
– Offer $1,000 down payment programs with debt ratios up to 42 percent of a household’s income to buyers who complete formal homeownership counseling courses.
– Create a high-profile marketing campaign for these and existing homeownership products, including the growing “Walk to Work” employer-assistance program.
Other cities being considered for the program are Chicago, Dallas and Los Angeles, “but we’re not as far along with them,” Nickerson said.