The HOME Program
The following is an article that was written and published in the Canadian Mortgage Professional magazine. You can view the HOME Program website here. The article below focuses on my participation but it is important to note that we have many fabulous people who make the program happen. Not the least of which is the contribution by all of the participating REALTORS®. There are also many other mortgage professionals and other industry professionals who make it all happen. My thanks to all of you.
by Vernon Jones, CMP Magazine:
A modest income won’t necessarily kill the dream of homeownership, but it will challenge it. It’s something Axiom Mortgage Solutions CEO Mike Cameron has learned over the last ten years, working alongside brokers, real estate agents and social services providers on Alberta’s Home Program, an initiative, also in its tenth year, and focused on preparing families that have already moved out of poverty and want to take that next step into a home of their own.
“We are facilitating that next step in the continuum of housing, and it’s a program I’m really passionate about and have invested in,” said the veteran of Edmonton’s broker community. “We celebrate 10 years of the program this year and in that time have helped 1,541 families purchase homes. There are currently 1,606 others active in the program and together that’s made for $94.5 million in transactions.”
The hard, cold numbers don’t really tell the story of participants who access education, the professional advice of real estate brokers and mortgage professionals along with financial aid and down payment support through the Home Program. What they don’t access is a handout. Ultimately, the program is centered on providing participants the tools to help themselves and their families into homeownership, if, in fact, that is the best fit for them.
“The program grew out of a situation where the Capital Region Housing Corporation was looking for a way to help clients who through their own success no longer qualified for public housing assistance,” said Cameron, regional financial coordinator for the program. “It has been extended to anyone who wants to participate, but it was originally seen as a way to bridge that gap. It still is.”
The Home Program starts first with education, hosting free in-class workshops that layout the necessary groundwork – budgeting, credit building and debt management. Counsellors then review participant eligibility based on financial criteria, before a second round of workshops focused on addressing the home-buying process, including what is for many participants the confusing world of mortgages.
Low income buyers who have completed both education sessions can apply for down payment assistance for up to 2.5 per cent of the purchase price.
“The down payment assistance is a gift,” said Cameron, a 16-year veteran of the mortgage industry. “It’s only repaid if the property is sold for a profit within three years. But the reality is that people don’t cash out on their homes.”
That message has resonated with Alberta brokers who’ve supported the Home Program, which started in Edmonton but has now stretch as far south as Lethbridge. The role of those mortgage professionals have generally been to share in the financial coordination duties Cameron leads as a volunteer. Members of the Alberta Real Estate Association are just as involved, with AREA’s Affordable Housing Initiative, the Canada Mortgage and Housing Corporation, the Alberta Real Estate Foundation and the Capital Regional Housing’s CTD Housing Solutions listed among other key funding partners. The last one on that list foots the bill for the services of the program administrator, who oversees the growing initiative.
Affordable housing continues to be a primary focus for many mortgage brokers both in and outside Alberta, something evidenced by ongoing broker channel support for Habitat For Humanity Canada.
Poor credit is often identified as the biggest hurdle to helping Canadians into their own homes, but that isn’t necessary true, says Cameron.
“Credit is often the easiest hurdle to get over,” he says. “The good news with credit is that it can be improved, it just takes time.”
Some clients of the program have taken as long as seven years to steel themselves for the home-buying process. But when they are ready, they’ll go through the same motions as most other A clients. Indeed, the goal is to see them qualify for prime rates, whether directly through a bank or working with a mortgage professional, says Cameron. “We don’t put any restrictions on how and where they obtain a mortgage.”
Home prices in Edmonton and across much of the program’s territorial reach have largely aided the buying process for participants.
While Edmonton’s residential real estate market saw sales pick up in Jun, prices actually fell compared to June 2010.
The median single-family selling price was $361,888, up a modest one per cent year-over-year. The average condo selling price was lower at $231,852, down more than five per cent year-over-year. It’s been a similar story for Calgary as the province’s housing markets continue to climb their way back from the last correction. That kind of dramatic dip isn’t expected to repeat itself, with economists pointing to the strengthening labour market, which should keep prices from falling much further. But values are now very close to the top end of what consumers are prepared to take on, say analysts, something that should limit further escalation in 2011 and 2012.
Still, demand for the Home Program shows little sign of easing. According to data from Statistics Canada, during the recent recession as many as one in five families in the greater Edmonton area lived in poverty. From 2008 to 2009, there was a 68 per cent increase in the number of Albertans who qualified as low income.
The Home Program is seen as providing the light at the end of that tunnel, helping families that have stabilized their financial situations, take that next step into homeownership. The benefits, as mortgage brokers know, aren’t limited to value appreciation and mortgage interest deductions.
“Homeownership helps create stability for families and a pride of ownership and a greater sense of community connection,” says Cameron. “For the community, it means people are more involved and engaged.”