National Homeownership Month celebrates the importance of homeownership in the United States. NeighborWorks America, along with the NeighborWorks network, celebrates homeownership year round and centers housing counseling as a way to help people decide if homeownership is right for them and, if it is, to help them down that path.
In the past year, our network organizations provided 212,600 hours of housing counseling to families and individuals. But what, exactly, is housing counseling? Rachel Goff has worked as a housing counselor at Neighborhood Housing Partnership of Greater Springfield for the past four years. Now executive director of the NeighborWorks network organization, she sat down with us to talk about how these trusted advisors help clients prepare for their journey to a safe and sustainable home.
NeighborWorks: What does a housing counselor do?
Rachel Goff: It’s everything from creating a working budget for a household, to helping them determine their
financial goals and making intentional, informed decisions about how they want to spend and save their money. Housing counselors also help with credit coaching to put people in the right position to buy or rent a home.
We provide unbiased guidance on all the steps in buying a home. We educate people on what it takes to get a loan, the importance of home inspections. We can calculate how much they can afford to spend on a home, and the down payment and closing costs so they know how much to save. We’ve had people who say, ‘I don’t know if I want to pay a Realtor – what do they do for me?” and then we talk about the benefits and drawbacks of working with a Realtor like assisting with putting an offer on a house, which is a legal contract. And protecting themselves if they don’t work with a real estate agent.
Housing counselors provide information, classes and unbiased guidance so that you can make good decisions to get where you want to go. We help people move forward on the path to financial and housing goals. And we touch base with them afterwards, too, to see if they have new needs.
NeighborWorks: What got you interested in becoming a housing counselor?
Goff: I was really interested in empowering people to manage their money better so they can move from poverty into sustainability.
NeighborWorks: What are some of the common questions or misconceptions people have about homeownership?
Goff: The most common questions I get are: “I found this house."What now?” “Where do I start?” Knowing the steps in the homebuying process is empowering.
Clients are worried about being taken advantage of. One common misconception is “lenders are not looking out for my best interest.” In most cases, lenders offer the best loan options they have. Client may not know how to shop around and compare loans.
Many people don't know how credit works. Sometimes they're surprised at the things that are reporting or not reporting to the credit agencies. They don’t know that paying bills on time is the biggest thing that improves your score.
Some think they must have a huge down payment to buy a home, when in reality, there are many options that don’t require a large down payment. Clients just don't know what's out there. Housing counselors know what lender, state and local programs are active.
NeighborWorks: How do you know if buying a home is right for you?
Goff: There's a lot of factors that you want to take into consideration. Are you ready to stay put in one place for a while? For four or five years or more, to make it worth your while financially? Are you good at saving so that you're prepared to deal with any unexpected expenses or repairs that might pop up? Are you prepared to be your own landlord? If you don’t have savings to hire somebody to fix things, maybe you have the skills to balance that out. A lot of times people will call us and say, "Hey, my landlord's raising the rent, I have to move; I think I want to buy a house." We help clients determine if they are ready.
NeighborWorks: So homeownership isn’t always the right solution?
Goff: Right. Being a housing counselor does not mean that we think everybody needs to own a house. They need to find their path. We love to see home buyers, but we know that that's not for everybody.
NeighborWorks: How many new homeowners do you see a year?
We average about 60 new homeowners a year, which is pretty amazing for our small organization.
Goff: How do people feel when they come see you for the first time?
I’d say 50% are nervous, because they know they are not informed enough yet and they are sharing personal financial information about themselves. After we lay everything out, we talk about what they're doing well, what things they want to change and how to do that. Many report feeling relieved to know where they stand and have a path forward. When money is tight, it’s stressful, so leaving with a solid plan can be really helpful.
NeighborWorks: What’s your favorite part of the job?
Goff: My favorite part of the job is empowering people. It's highly rewarding to see someone learn and use their new skills to change their lives and make their dreams happen.
