Claudia Askew, Marketing and Public Relations Planner
| 6/7/2019 2:29:00 PM
Refugio Garcia and Dominique Valenzuela, both 21 years old, lived with Refugio’s mother for several months along with their five-month-old son to save enough money to purchase a home in the Los Angeles area. When they learned about the NeighborhoodLIFT program, they knew it could help them reach their goal sooner. The program, a collaboration among Wells Fargo, NeighborWorks America and its local network organizations, provides down payment assistance and homebuyer education to qualified homebuyers. Refugio and Dominique qualified for $15,000 toward the purchase of their home, and they couldn’t be happier. "It’s two stories, with three bedrooms," Dominique said. "We just found out we’re having another baby, and we’re excited to have a home with enough room for us to expand our family."
For most working Americans, homeownership is the primary tool for building wealth. However, saving enough money for a down payment remains the most significant challenge for potential homeowners. Credit problems and lack of financial knowledge also play a part in keeping this important asset out of reach for many. These barriers can affect families of color in greater numbers, perpetuating the long-standing gap in prosperity between white people and non-white people.
That’s where NeighborhoodLIFT comes in. Sixty-three percent of LIFT homebuyers are people of color, compared to 23 percent nationwide. The LIFT program provides qualified borrowers with $15,000 in down payment assistance in most markets where the program is available. This assistance makes it possible for many families to purchase a home when it might not have been possible otherwise.
LIFT homebuyers are required to take homebuyer education to ensure they are prepared for the responsibilities of sustainable homeownership, so this life-changing investment remains in their hands for the long term. The program has helped more than 21,000 individuals and families purchase homes across the country.
In Minneapolis, Jon and Caris Li also benefitted from LIFT, using their down-payment assistance to purchase a duplex. Since the house consists of two separate living units, they are able to earn rental income from the second unit. They estimate it would have taken them at least another year to save for the down payment without this help. The extra income from the rental allowed them to start their own business, an entertainment company that performs at weddings and corporate events. As Jon explains, "We had been thinking about the business for a while. Once we became homeowners and had the rental income, we were able to invest in equipment and get it off the ground." Now they hire contractors to work with them on events, providing work for others in the community.
For people who aren’t mortgage ready, LIFT provides financial education to help them budget, improve their credit and save toward a possible home purchase in the future. Khadijah Page of Birmingham participated in financial education to learn how to improve her credit and purchase a home. In just over a year, she raised her credit score from 500 to 700 and received LIFT funds to help with her home purchase. Khadijah and her two-year-old son love their house. "It’s brand new, built from the ground up just for me," she says. And the neighborhood is much safer than where they lived before. "I’m glad to be able to provide a safer environment for my son," she says.
For these homeowners and thousands of others like them, the LIFT program gives homebuyers of color a chance to even the playing field. Achieving homeownership becomes more easily attainable, helping people of color gain access to an essential tool to provide a stable environment for their children, strengthen their communities and build a solid future for generations to come.