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Media Coverage Home schooled: Dreams becomes reality, thanks to class for first-time homebuyers Seattle Times Northwest Life: Sunday, December 22, 2002 By Elizabeth Rhodes A decade ago, if anyone had told Martin Lawson and his wife, Tanya Powers, that they'd be spending this Christmas in a home of their own, the couple would have told them they were dreaming. Now Lawson and Powers have a message for others who are struggling to become homeowners: It's no dream. If this couple can do it, just about anyone can. And a new study by a local housing group points out the way. Sitting in the living room of their cheerfully decorated two-bedroom South Seattle home, the Christmas tree twinkling in the corner, Lawson and Powers are overjoyed with their first home, purchased just this September, and all it represents to them. Success. Stability. A place to raise their two daughters, dark-haired Kelsey, who will be 6 the day before Christmas, and her ebullient 2-year-old sister, Morgayne. (Plus Cheyenne the dog and Snickerdoodle the cat.) Lawson is big and gregarious, a smile always ready. His wife is tiny, with dark hair to her waist. She doesn't talk much, but when she does her well-chosen words count. Yet a few years ago, Lawson and Powers were struggling mightily. Originally from Anchorage, they came to Seattle separately in search of opportunity. However, after getting together, theirs instead became a life of too much bright lights, too much big city, too little focus on the future. And too much party. Way too much party. "It was very excessive," Powers says softly. At one point they were homeless. And then she became pregnant. It was, they both agreed, a wake-up call that it was time to grow up. But by then neither had a lot of self confidence. "I was scared I wouldn't be able to provide for her and the baby," Lawson confides. Still, they plunged ahead, both landing $5.25-an-hour jobs. Since they had no car they bused between work and their sparse 425-square-foot apartment in a public-housing project. "We had a mattress, two plates, two forks, a frying pan and a radio," he recalls. "And cockroaches for pets," says she. On Lawson's first payday, he splurged and added to the decor by buying some living-room furniture: two inexpensive lawn chairs. They saw others in their housing project evicted for one reason or another. "It was a motivator for us; we didn't want to end up like that," he says. Big dreams, a way to get them When Kelsey was 1-1/2 years old, Powers decided she needed to be a better role model for her daughter. So she enrolled in Seattle Central Community College. She'd been out of school seven years and recalls feeling intimidated by the other students. "Everybody looked like they had it well together; I was worried I didn't have the capacity," she recounts. But she did, besting stiff competition to land a generous Gates Millennium Scholarship. It allowed her transfer to Seattle University, graduating this month with a 3.82 grade-point average and a degree in public administration. She'll continue at SU, again on scholarship, working toward a masters in education administration. About three years ago, the couple began dreaming of owning their own home. Again, it was a steep climb. "Our credit was so bad I couldn't even get a free spatula," jokes Lawson, alluding to the merchandise lures that banks offer new customers. Then there was the problem of a down payment. They didn't have one. And they didn't know much about the homebuying process. That was the easiest obstacle to cross, thanks to a free, first-time homebuyer class they took. Among the things it taught them: There are down-payment assistance programs offering many thousands of dollars to folks like them. And there are reduced-interest mortgages available, too. One currently offers money at 5.25 percent, which is almost a percent lower than the average national rate. On a $175,000 mortgage, getting that lower rate can mean a monthly savings of about $100. But one of the big problems for struggling buyer hopefuls like the Lawson-Powers family is that they don't know such offers exist, nor do they know what they must do to become homeowners. And that's why the Washington State Housing Finance Commission (which offers that 5.25 percent mortgage money through lenders) has developed first-time homebuyer classes. Real-estate agents, mortgage lenders and others get special training to teach them and must agree not to use the classes to solicit business. Each one-day class is five hours long; they're held in many different locations around the state. Those who attend receive a certificate making them eligible for money-saving programs they could not use otherwise. More than 70,000 persons have attended. Positive impact Among its findings: • Just prior to taking the class, 59 percent of attendees said not knowing how to buy a home was a major obstacle to purchasing one. Six months later, after being taught the process from A to Z, less than 1 percent saw that as an obstacle. • Before attending the class, more than 70 percent of students said that three factors were holding them back from buying: lack of down payment or closing costs, lack of income and finding an affordable, appealing home. Six months later, 40 percent or less reported these same obstacles as factors in their home search. And just 21 percent were still saying they didn't earn enough to qualify for homeownership. Indeed, half a year after taking a class, 47 percent had purchased a home — thus putting to rest a common misconception. As CHOC has learned, would-be buyers often think that if their annual income is under $50,000, they won't be able to purchase. Some 62 percent of class-graduates-turned-buyers in fact earned less than that. Amy Duggan, CHOC's executive director, is particularly gratified that the percentage of attendees who become buyers has been growing. She speculates that's because "people are more prepared. They're learning and taking an active role in the process. And hopefully the percentage of people who are buying is increasing because they're finding out about down-payment assistance programs." It's not just learning the basics that makes these classes beneficial, says Ozzie Boyle, a Wilson Realty agent who's taught them for almost three years. They're also good for overcoming the fear factor and leveling the playing field. Most of Boyle's students initially "are very frightened about the homebuying experience. They're scared of the process, and the idea of owing hundreds of thousands of dollars is daunting to them. There's so much to learn — and knowledge is power." That's why he suggests they take the class even before they choose an agent, a lender, an area or a house. They'll learn how mortgages work — and how to recognize and avoid "predatory" lenders who want to overcharge them. They'll learn how to present the best credit face to the mortgage world (and how to clean up their bills if necessary). Boyle recalls one young man who came to his class already preapproved for a mortgage. Going over that paperwork, Boyle discovered that the lender was preparing to charge that man an extra $5,000 in "junk fees." Boyle suggested the man get a copy of his credit report, which he did, and then helped him resolve a couple of minor black marks on it. That cleared the way for much better loan offers to roll in, and they did. Debunking myths Mortgage banker Ginger Paterno, of Lake Mortgage, has also taught the classes for many years. A big part of her presentation is debunking myths. "People think they have to have worked at the same job for two years, that they have to have down-payment money saved. That's outdated information." Indeed, Paterno spends considerable time telling her students about some of the lesser-known but very advantageous loans. One that's open to some low-income buyers is called the Leverage Loan. It requires nothing down and charges just 1 percent interest. She also teaches her students what to do if their lender jacks up fees at the last moment. Both Paterno and Boyle also counsel their students to be patient. That's something Lawson and Powers took to heart. "Everybody wants things right away. We had to pay off credit debt and go to classes," says Lawson. They also had to save for closing costs. All that took more than a year. But one obstacle they didn't face was the down payment. Working through HomeSight, a nonprofit counseling agency that runs a home-ownership program, the couple was able to access two down-payment assistance programs for a total of $35,000. They also got a below-market mortgage-interest rate. As a result, monthly payments on their $157,000 house are just $900 — or about what they'd pay for a two-bedroom apartment. "I never in my wildest dreams thought I'd ever own a home," marvels Powers. Now she and Lawson are fixing their first one up and looking forward to building equity and a better life for their kids. For more information |
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