This program is helping some of DC’s most disadvantaged residents buy houses

Very few Ward 8 residents are homeowners— only about 24 percent in fact, with many people calling it “the renter’s ward” and a lot of residents believing that buying a home will never be a possibility. There are paths to homeownership in Ward 8, though. Here’s one example of how residents are making it happen.

DC is split up geographically into eight wards, each of which has a representative on the DC Council. Ward 8 has not seen the same kind of private or public investment, both residential and commercial, as other wards in DC. The ward has the highest poverty and unemployment rates in the city, 37% and 14% respectively.

Even though it has the most affordable home prices in DC, with 2015 median sales prices for a single family home at $281,000 compared to a city average of $712,000, Ward 8 has the lowest number of homeowners.

This has led many to the incorrect and biased conclusion that building homes intended for homeownership in Ward 8 (rather than the expectation that the people living in them would rent) would not be successful.

It’s true that Ward 8 residents face a lot of barriers to homebuying

It is, of course, very difficult for low-income and even moderate income families to pay the downpayment and closing costs on a home. Many prospective low-income homebuyers have a poor credit history, or no established credit at all. When most of the people who live in a place don’t have much capital or good credit — two critical components for buying a home— you wind up with a shallow pool of prospective homebuyers.

Furthermore, a large part of the renter population in Ward 8 doesn’t know much about the process of buying a house, particularly those with no familial history of homeownership. It’s a daunting process to navigate, especially with the recent history of predatory lending and foreclosures.

Finally, there’s a low number of houses for sale in the area, which is a challenge, especially given that there is growing competition from all-cash investors for homes needing repairs. New affordable and market-rate for-sale home construction has been on the rise in the last several years, such as Sheridan Station, the Buxton Condominiums and the upcoming Grandview Estates II, and more is needed.

Putting together all of the right tools and resources isn’t easy, but that’s not to say that Ward 8 residents should abandon the search. People can take action to become mortgage-ready. They can improve their credit. And they can take advantage of DC down payment assistance programs and some of the new affordable homeownership that is being built in Ward 8 and elsewhere, as well as advocating for more. They just need to know where to look.

Bringing a model to Ward 8

In DC, groups called homebuyers clubs combine combine education with peer support to help people realize they can, in fact, become homeowners. People who join them work with counselors to develop individual financial and mortgage-readiness plans, reporting on their progress each month. They also attend monthly meetings that allow members to share each other’s experience and bring the homebuying process into the classroom.

Topics discussed at meetings include financing/budget/mortgage process, do’s and don’t’s with credit, the real estate market today (including the affordable homeownership market), and more.

These clubs are run through MANNA, a nonprofit affordable housing developer and educator in DC. The District’s first homebuyers club was created in 1986, and since then close to 1,000 families have “graduated” (meaning they purchased a home) via one of the clubs. Of those families, only about three percent have experienced foreclosure — about a third of the city average.

These families are not just purchasing a home, but are also investing in their community, their future, and their kids’ future as well.

MANNA’s homebuyers club’s approach, replicated by several national organizations, has become a proven one. A recent report by the Department of Housing and Urban Development found that homebuyer education and counseling programs like this one increase credit scores, encourage better communication with lenders, and help participants better understand how their mortgages work.

Earlier this year, the Ward 8 Homebuyers Club was established specifically for Ward 8 residents. MANNA is running this club as part of the 11th Street Bridge Park project’s equitable development plan, which was designed to benefit and prevent the displacement of residents near the site of the future bridge across the Anacostia River. This club meets at THEARC in Southeast Washington, and keeps members informed about developments coming to Ward 8.

One success story

Many Americans overlook the role that homeownership can play generationally for a family. Darryl Sims, a member of the Ward 8 Homebuyers Club, says that typical concerns about income and financing held him back from pursuing homeownership.

Another stumbling block, he says, was that he simply “[lacked a] full understanding of the importance of homeownership.”

Sims rattles off a long list of reasons that homeownership is important to him. Homeownership, he says, would increase his sense of investment in the community, would make him feel like a more productive member of society, and would increase both his self-respect and the respect that his family holds for him. But the biggest reason:

“[Homeownership] would afford me the opportunity to bequeath something positive to my children,” says Sims.

This is not just about housing, it’s about wealth building too

Homeownership builds wealth, which is even more important for the predominantly black residents of Ward 8.

For most low-to-moderate income households, home equity is their largest source of wealth. Throughout the country as a whole, African-American homeownership lags behind whites by 30 percent and the average black family’s net worth is just six percent that of their white counterparts. And the racial wealth divide in the DC area is even larger.

Programs like HBC work against this trend. For instance, a report written several years ago by MANNA found that the 700 properties it had built since 1982 had collectively increased in value over $144 million, including homes in Ward 8. The median home saw almost $150,000 in appreciation. And what’s more, 75 percent of the original low-to-moderate income homebuyers still owned that same home.

That increase in wealth is part of the reason why the children of homeowners are more likely to graduate high-school, more likely to go to college, less likely to end up on welfare, and more.

Expanding homeownership is important for America and for Washington, DC, just as it is for Darryl Sims.

For some, the road to homeownership is a long and confusing one. However, the benefits can greatly affect one’s life and future. In Ward 8, a place where only 1 out of every 5 residents owns their property, homeownership seems unattainable to existing residents.

Strengthening and increasing programs that support affordable homeownership can make the American dream of owning your own home become a reality.