Dreams for homeownership improved with financial literacy

 

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Toni Alaniz watches television with her sons, 7-year-old Alonso and 14-year-old Tony, in their apartment. She is taking classes and counseling with Catholic Charities so she can someday move them to their own home.

Beth Wilson for South Texas Catholic

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The dream of homeownership is better when built on a strong foundation of financial literacy. That is one of the lessons learned through classes and counseling offered by the housing department of Catholic Charities of Corpus Christi. And the lessons are paying off with 327 families successfully achieving homeownership since the inception of the program. In January of this year alone, 18 families participating in the program have purchased a home.

“To narrow it down, our mission (Catholic Charities’) is providing services to people in need to address the social ills that undermine the dignity of the person,” said Doreya “Yiyi” Dean, Director of Housing Counseling for Catholic Charities. That extends into her department, as well, in the form of helping low-to-moderate-income families understand and prepare for homeownership.

“We make sure they’re ready,” she said. 

That means everything from classes for home buyer assistance certificates; financial awareness covering basics of budgeting and understanding credit; and foreclosure prevention and credit repair.

About half of the department’s 1,200 clients each year come in with dreams of buying a home, Dean said. She noted that in the past three years the program has experienced a significant uptick in the number of families who purchased homes. In 2014, awareness about the program’s education components, resulted in 34 new families purchasing homes. In 2015 the program experienced a “dramatic increase” in the number of families purchasing a home with 91 new homeowners. And in 2016, the confidence of new homeowners began to increase, and credit scores began to rise, resulting in 143 families purchasing a home.

Some clients, about one-third, come seeking help with foreclosure prevention, a situation in which banks may require homeowners to take classes. The remaining segment of clients are seeking credit repair assistance.

Prospective homeowners are not always prepared for the upfront expense of a down payment or the continued expense of mortgages and maintenance. These clients begin with budgeting or financial literacy classes. They also seek out the one-on-one counseling available in several of these areas.

“Then eventually they reach their goal of homeownership,” Dean said. “We meet the people where they are.”

Catholic Charities began its housing program in 2002 during a period of high foreclosures—in the city and nationwide—that was threatening the stability of neighborhoods. Adjustable mortgages went from two percent to 10 percent in three years, which meant monthly payments jumped from $1,200 to $3,000 and easily outpaced homeowners’ income.

The U.S. Department of Housing and Urban Development, Dean said, began to place more attention on education for counselors, who in turn offered classes to homebuyers. More responsibility was also put on the homebuyer to prove they had sufficient incomes and credit scores to cover mortgages. Today, about 70 people attend the two monthly counseling classes offered by Catholic Charities. 

Key messages in the financial awareness classes are: knowing your income and expenses and sticking to a budget.

“The client has to make changes and be willing to stick to a budget to create savings,” said Amanda Marie Lazo, a housing specialist with Catholic Charities. That may mean eating out less and not buying on credit non-necessities or those “treats” they may think they deserve.

That is one lesson that Toni Alaniz is learning. 

“Don’t use (credit) cards unless it’s in an emergency,” Alaniz said she learned at the classes. “I had thought it (credit card) would help, but it’s supposed to be only for an emergency–not to just go shopping.”

Alaniz, a Catholic Charities housing education client since October 2016, is learning the tricky parts of budgeting, all with a goal of going into the homebuying process with her eyes open. 

“I don’t want to put my kids into a home and then turn around and me not even be prepared for it,” she said.

The 29-year old resides with her two children, ages 14 and seven, in LULAC Village Apartments on Horne Road near Greenwood Drive and works at a nearby Whataburger. She does not have a timetable for buying a home, but is instead listening to and taking the advice her counselor at Catholic Charities offers. 

“They are teaching me how to get ready to buy a home,” she said. “How to budget myself to not get things I can’t afford.”

In budgeting, Dean advises clients to be realistic. 

“You need to be honest with yourself about what you have and don’t have,” she said. “It’s easy to say, and difficult to put into practice.” 

One of her recommendations is the envelope system of budgeting, setting aside the cash needed for essentials in envelopes, one each for food, utilities, school and entertainment. Also, have a grocery list when shopping to keep from getting caught up in overbuying.

Dean said that lately she has seen an increase in attention on financial literacy, people gaining an understanding of how damaging credit can be and the realities of a home mortgage. She is pleased to have others join her in what she sees as her mission to help others learn these things. 

“That’s what we Catholics do,” she said. “We feed and clothe and we try to do all these wonderful things that we are mandated to do under Catholic social principles.” 

The housing department also offers classes in the “Family Self-Sufficiency Program”, which is for those who wish to improve their financial situation and reduce their dependence upon entitlement benefits, nutrition assistance programs and temporary assistance programs for the needy. The focus here is on overcoming obstacles that may include lack of education or low-paying jobs. 

Dean said donations for the housing counseling programs of Catholic Charities are always welcome to help offset expenses and offer waivers for class fees. An online donation system, as well as more information of the housing program, may be found at the Catholic Charities website catholiccharities-cc.org.