Case Studies in Homeownership from the
Austin, Minnesota Housing and Redevelopment Authority
My name is Julie Ackland; I am Family Housing Specialist for the
Austin Housing and Redevelopment Authority. The Austin Housing and
Redevelopment Authority started its Section Eight Home Ownership
Program in June of 2001. I have been working with the Section Eight
Homeownership Program for over one year. I think that it is a very
workable program for rural communities where property values are
lower. Interest rates are low, and now is a good opportunity to
initiate the program. In Austin, house payments are less than rent
and homes can be purchased for a little as $45,000 in some cases.
This helps this program become more workable.
I think that it is a good program for people with disabilities.
When people are disabled, their ability for upward economic mobility
is sometimes limited. Because of this, they may be on the Section
Eight program for many years. As long as they are on this program
for this many years, they might as well have something to show for
it, such as a home. When you work with a person who is disabled,
and they receive Social Security Disability benefits, you have a
guaranteed source of income. If they have earned income that can
be another bonus when it comes to applying for a home mortgage.
This program is a good hedge against inflation. House payments
stay the same, but rents keep on going up. Some landlords are raising
rents, as much as $50.00 to $100.00 on single-family homes. Single-family
homes are at a premium, and even homes in very poor repair can demand
a high rental rate.
I have found Realtors, and loan officers, and the local community
action agency, SEMCAC to be very helpful to the clients when it
come to buying a house. The HRA only carries part of the responsibility.
Here are three case studies:
First case study
Ed, is a disabled man, he works at Cedar Valley Services, a workshop
for disabled people. He and his girl friend Sally deliver shoppers
for the Mower County Shopper. Ed also receives Social Security.
Ed lived for many years in a small three-room apartment. His kitchen
was about the same size as he was; he did not even have room for
a table. His rent was $300.00. The apartment had old appliances
from the 1940's. The walls were brown from years of cigarette smoke.
Ed went to the Wells Fargo bank, and worked with a Realtor and
located a house for $45,000. He took the "Home Stretch" classes
from the local Community Action Agency. Ed has a learning disability,
but all of these agencies helped Ed put this deal together.
The HRA inspected the house, and a third party inspection was done,
as required by the regulations.
Ed now owns a two-bedroom home, with permanent siding, central
air, a garage, and a patio. He has plenty of room for more than
one vehicle. He has just bought a new grill for his patio. He has
a bright, sunny, and spacious kitchen with new appliances, including
a stackable washer and dryer.
Ed's house payment is $327.00. Ed also says that his utilities
were so low last year that he saw no need to apply for fuel assistance.
Second case study
Martha is a single mother with five children. She works at a pork
processing plant in Austin.
The apartment complex she was living refused to renew her lease.
Where was she to go? Housing is very hard to find for large families.
There are very many landlords who will not rent to a single woman
with five children.
One answer was the Section Eight Home Ownership program. Martha
did not need a landlord, if she had good credit, and a good job.
Martha had help from a Realtor, and a social worker. They helped
Martha find a home to buy, and helped her arrange for financing.
Martha also attended classes through the local Community Action
Agency. Her house payments are $100.00 less than her rent was at
the multi-family housing complex. Also, a home like hers would rent
for about $179.00 per month more than her house payments. Her children
now have their own fenced in yard to play in, and she has her own
Her quality of life has improved tremendously, since moving into
her own home.
The third case study
Randy wanted to buy a house for years before this program came
available. A Realtor was very helpful showing him many homes. The
Wells Fargo loan officer was also very helpful. Randy qualified
for a CHAMP mortgage. The CHAMP mortgage is a Wells Fargo loan product.
Randy was the first person in the City of Austin that had qualified
for a CHAMP loan at this point in time. This loan product included
the Section Eight Housing Assistance Payment as income, and this
enabled Randy to borrow $10,000 more. He was able to enter in to
this agreement using $200.00 down as earnest money, and $200.00
at closing. This $400.00 is no more than a typical damage deposit
on a rental home.
Randy says, "I have rented for years and HUD helped me find my
own house. I can pay my bills. I have insulated the garage, and
I will be able to work on cars. I think that this is great, now
that I have my own home."
Randy has already redecorated one of the bedrooms by adding a horse
border and putting in new carpeting. The HRA helped him obtain some
used carpeting from one of their apartments.
Randy was able to purchase a three-bedroom home for about $100.00
per month less than the voucher standard for this area. Randy has
a one-bedroom voucher.
His house payments are about $30.00 dollars less than rent would
be for a similar unit.