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Home Sweet Home

Home Sweet Home

Congressional Black Caucus initiative leads HBCU, community college students down the road to homeownership
By Cassie Chew

When students graduate from college, the Congressional Black Caucus Foundation (CBCF) wants to make sure they hold the keys to economic success. And one of those keys, the CBCF says, should unlock the door to their own home. Toward this end, the foundation has embarked upon an initiative to help young people graduate from renters to homeowners.
Through three-hour workshops held on the campuses of historically Black colleges and universities, the CBCF’s Student Home Ownership Program (S.H.O.P.), which began its tour of HBCUs last spring, is working to educate young people about the importance of managing money wisely, establishing good credit habits and building wealth through homeownership.
And instead of paying for the course, graduating seniors who participate receive a $1,000 voucher, good for two years toward the down payment and closing costs on a home.
“We started the program based on one statistic — that 46.6 percent of African Americans were homeowners,” says Simone Griffin, S.H.O.P. program coordinator.
The program is funded by the CitiGroup Foundation, State Farm Insurance Cos., and the Fannie Mae Foundation.
According to recent U.S. Census Bureau’s housing and homeownership statistics, the African American homeownership rate has risen slightly to 48 percent, but it still lags far behind the 68 percent rate for all Americans and 75 percent rate among non-Hispanic White Americans.
CBCF wants to establish a pattern of early home ownership among African American college graduates that can be passed on to family members and future generations toward the goal of erasing the homeownership gap.
“We can change that paradigm, and I wanted to come up with a program to allow them to do it,” says Janice R. Crump, CBCF’s director of media relations and communications.
S.H.O.P.’s genesis is based on the path Crump and her husband took after graduating from college. The couple purchased their first home in Atlanta when they were both 23 and built their second home in North Carolina at age 28. The Crumps have passed on that lesson of homeownership to their three children.
Two years after graduating from Spelman College in 1996, Crump’s daughter Toiya also built her first home in Atlanta.
“Rent is way too much, and you don’t see any equity,” Toiya says.
The CBCF’s S.H.O.P.’s focus on young professionals appears to be in step with national trends. According to the U.S. Census Bureau’s 2003 housing vacancy report, the homeownership rates among people under age 35 have increased at a faster rate than other age groups.
“It is the best time to do it,” says Janice Crump. “As you get older you acquire more debt. The value of those things depreciates as soon as you buy them. Our home is the only thing that appreciates in value the moment you step into it.” 
S.H.O.P. pilot projects started in spring 2003 at Jackson State, Howard, Hampton and Xavier universities. During the 2003-2004 school year, 27 schools hosted S.H.O.P. workshops. CBCF plans to make the rounds to the more than 100 HBCUs around the country.
None of the students who participated in the program in 2003 or 2004 are homeowners yet, but says Griffin, they were not expected to be.
“You have this whole group of people and they are going to be making a good amount of money. So what we wanted to do is to get them while they are a captive audience,” Griffin says.
The goal for the program is not to increase the number of people who own homes by age 25, but “to get the ball rolling,” Griffin says, adding that once a person makes a decision to buy a home, it generally takes three to five years to go through with the process.
“Buying a home is my first priority when I get a well-paying job,” says Malikah McCormick, senior class president at Morgan State University in Baltimore.
McCormick assisted Griffin in the planning and promotion of the S.H.O.P. workshop at Morgan State.
“A lot of the students were very impressed with the workshop…it is not something that is often taught,” McCormick adds.
The workshops have included presentations by a homeownership counseling consultant and a State Farm Insurance agent and have included information on inspections, escrow accounts, closing, and all of the steps that are part of the homebuying process.
On some campuses, the workshops have been tailored to fit regional needs.
“We like to provide our students opportunities while they are matriculating and upon graduation to help them become better citizens; homeownership creates good citizenship,” says Dr. Franklin D. Chambers II, Howard University’s vice provost for student affairs.
About 300 students participated in Howard’s S.H.O.P. workshop, which also included a discussion on first-time homeownership programs in the Washington, D.C., metropolitan area. Howard also opened the doors to its workshop to students at other colleges in the area, Chambers says.
“It provides another opportunity for students to be informed,” says Tanya Rush, assistant vice president for student affairs at Morgan State. “One junior said that she couldn’t wait until next year so she could participate.” Approximately 600 students attended the workshop at Morgan State, which also included a discussion on predatory lending.
“Part of our mission is to promote individual development and improve quality of life in a multicultural society,” says Dr. Gloria McFadden, dean of student affairs at Cuyahoga Community College in Cleveland. Cuyahoga was the first community college selected to host a workshop. McFadden invited a representative from the local neighborhood housing development agency and from a local insurance company to participate in the discussion.
“The average age of Cuyahoga Community College students is 30, so these are young adults already living on their own and perhaps are renting and looking to have a home,” McFadden says.
Griffin says that is one reason CBCF decided to branch out to community colleges.
The CBCF plans to visit up to 27 schools each academic year. But if the foundation cannot return to Cuyahoga next year, McFadden is considering holding an annual housebuying fair on the campus because homeownership fits the goals and interests of Cuyahoga’s student body.
The mix of upper and lower classmen who participated in the program at Southern University in Louisiana was very attentive.
“They had a lot of questions about the process,” says Al B. Barron, director of career services at Southern. Barron invited local representatives from State Farm Insurance agencies to field questions.
“For most, this was an eye-opening experience,” Barron says. “Students learned that “you have got to do more than talk about it — you’ve got to make a foundation for it to happen.”
In addition to teaching students about the homebuying process, the workshop’s panelists advised students on establishing credit and guarding against racking up credit card debt, as well as how to resolve credit situations they already are facing. Poor credit management, experts say, is the greatest barrier to homeownership for African Americans.

Renting vs. Buying
Recent graduates may be concerned that owning a home early in their careers could tie them down to a particular location at a time when they are still growing academically and professionally.
But owning a home in Atlanta did not stop Toiya Crump from relocating to Indiana two years ago.
“I went where the opportunity was,” Crump says.
She relocated to take a job as a director of spa services for an upscale dental clinic. Her new career is giving her hands-on training as she works on a five-year plan to open her own spa. Crump plans to sell her home in Atlanta and use the funds from the sale to purchase a new home in Indiana.
Young professionals interested in homeownership may be worried about how mortgage lenders view their student loan debt. During the past seven years, both undergraduate and graduate student loan debt has increased significantly, according to the National Student Loan Survey’s 2003 report “College on Credit: How Borrowers Perceive their Educational Debt.”
In 1997, 40 percent of borrowers said their debt caused them to delay buying a home, according to NSLS’s report “Life after Debt.”
But Vanessa Warrick, a Washington, D.C.-based State Farm Insurance agent who has been traveling with CBCF to present at the workshops, says that recent graduates shouldn’t worry.
“Student loans are what we consider good debt,” Warrick says. When considering applicants for mortgages, loan officers look at your income-to-debt ratio, says Warrick, who advises the potential homeowners to establish a budget so that they can understand how much of a mortgage they can afford.
Both Griffin and Warrick say the current low interest rates on home loans and the rapid increase of housing values in some markets is an incentive for people to work toward buying a home at age 28.
“First and foremost is the equity that can potentially build in your home,” Warrick says. “You can sell that property, pay for your wedding or rent it out.
“A mortgage is a tax deduction and a solid investment,” Warrick adds.
Even if young professionals plan to relocate within a few years, they still should consider homeownership, Griffin says. “First of all, people remain stationary longer than they think.”
This is true for Lorraine Lighthead, a senior manager at America Online, who considered buying a home after graduating from Bowie State University in Maryland, but then put the plan on hold.
After earning a degree in communications in 1999, she took a job as an assistant producer for a local television station, rented an apartment in Maryland and planned a move to the West Coast.
“I was 22 renting an apartment, 23 renting an apartment, 24 renting an apartment — and rent goes up every year,” Lighthead says. She finally decided to invest time and effort into buying a home. A year later she closed on her first home in Virginia.
Even if a young professional decides to attend graduate school, homeownership can be a smart decision, Warrick says. She advises graduate students to consider a multi-unit house with the plan of renting to another graduate student at a rent lower than the current market rate.
“Loan officers take into account potential rental income when deciding to approve your loan,” Warrick says. And, by renting out part of the home, you can help yourself and someone else.
This is how Toiya Crump came to save money to purchase her home. A year after graduation, one of her classmates built a three-bedroom home in the Atlanta suburbs.
“She was just starting out and decided that she wanted to make a little money on the side, and help someone else who wanted to buy a home.” So Crump, who at the time was renting, moved out of her apartment and in with her friend.
“I paid $400 flat — no utilities,” Crump says. Crump saved for six months, built and purchased her own house, and then helped another girlfriend save for her own down payment in the same way.
“We are not saying that this is going to be easy,” Griffin says. “You have to make a sacrifice for everything you do in life.”
Griffin and Warrick are not just talking the talk.
Sixteen months after graduating from Hampton University in 2000, Griffin purchased a three-bedroom home in Washington, D.C. She credits guidance from her father, who works in the real estate industry, and her own research with making the decision. She has a roommate and rents out a basement apartment.
Warrick, a 1994 graduate of Binghamton University’s School of Management, relocated to Maryland from New York to start her State Farm agency. She owns a home in Montgomery County, Md., a market where home values have been appreciating rapidly.
Homeownership for younger professionals has rewards, but it doesn’t come without worry or responsibility.
For Lighthead, owning a home so early in her professional career “is weird, but it is wonderful.
“When I am out working in my yard, I think “This is my yard,” Lighthead says. “If I miss one homeowners insurance payment, I could lose my house,” she adds reflecting on the realities of being a homeowner.
“It is frightening when you sign on the dotted line,” Lighthead adds, recalling her closing.
“You spend an hour signing papers — everything including a statement saying that I agree to pay county taxes. It is very nerve wracking. There are only four people in the room, you, your realtor, a lawyer and the seller.”  
But nearly two years after purchasing her home, Lighthead seems to have learned her lesson on the role homeownership plays in achieving economic success.
“I think there is a sense of accomplishment because you own property,” Lighthead says.
She has continued to study housing markets and is now considering purchasing property as an investor.
“It is exciting when you look across the street and see a neighbor is selling their house for $150,000 more [than its initial value]. I never could have [saved that] in two years.
“You really start to feel empowered.”
For more information on S.H.O.P., visit the CBCF Web site at <>. 

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