Rodney Tracy hugs his wife, Tracy Tracy, Nov. 22 in the attic of their home in Cedar Rapids. The couple decided to renovate the space after buying the house to make it their own, with assistance from Neighborhood Finance Corp. (Savannah Blake/The Gazette)
Realtor Tonya Marie, from left, Tracy Tracy and Rodney Tracy pose for a portrait Nov. 22 in the living room of their home in Cedar Rapids. With the help of Marie’s staff and the Neighborhood Finance Corp., Tracy Tracy said she learned the language of home ownership and began to see that it was something she could achieve. (Savannah Blake/The Gazette)
Stephanie Murphy is Executive Director of Neighborhood Finance Corp. (Photo submitted)
CEDAR RAPIDS — Kyla Mullinex dreamed of owning a home for a long time, but she never had enough credit or money to put a house on it.
But a year ago, Mullinex, a 23-year-old Transamerica customer service representative, got a credit card, started building credit, and in the spring began seriously considering his options. He learned about assistance available through the Neighborhood Finance Corp., a program designed to spur reinvestment in neighborhoods and revitalize those in decline. Large swaths of Cedar Rapids are eligible for the program.
Mullinex said she is using all the programs the organization offers: basic down payment assistance of $10,500 and up through the Minority Journey to Homeownership Program, forgivable closing cost assistance and a forgivable rehab loan .
She chose a house near Cleveland Elementary School, pushing her into homeownership to avoid jumping from apartment to apartment and worrying about landlords making rent.
When you’re ready to get an animal, you won’t need a permit now and can choose whatever dog or cat you like. And she’s also excited that as part of her rehab loan, she’s getting a whole new kitchen.
“I’m someone who loves to cook and be in my kitchen space, and the oven is very important to me,” said Mullinex. “To have a kitchen that is exactly how I want it, from where the cabinets are to the color of the walls to the lighting, everything is what I want it to be, it’s really exciting.”
The effort increases minority ownership
Mullinex is one of the Cedar Rapids borrowers that has closed on loans as part of the Journey to Homeownership program launched this year. This came out of the Neighborhood Finance Corp. Race, Equity Diversity and Inclusion committee. as an effort with other community partners to increase ownership of minorities, especially African Americans.
The grant-funded program aims to create a safe space where people can share the barriers they face to home ownership, while learning about available resources and receiving down payment and cost assistance closing Borrowers in this program must participate in a class or event and also complete eight hours of homebuyer education as part of the process.
Mullinex said she learned about the history of minorities and home ownership, as well as tips for homeownership, even simple lessons like changing light bulbs to new LEDs to lower energy costs.
Stephanie Murphy, executive director of Neighborhood Finance Corp., said the program recognizes that when people face obstacles such as a lack of generational wealth, access to credit or equal educational and employment opportunities, they cannot achieve the same results. Minority populations struggle disproportionately with these systemic barriers.
“Instead of just putting that money in, we need to have community conversations around it so people can have a safe place to talk about why their family doesn’t have generational wealth or if someone became a homeowner and wasn’t successful. … that conversation can focus on the systems that created it,” Murphy said.
Lending rebounds after 2020 crises
The Journey to Homeownership program is among the ways Neighborhood Finance Corp. has grown after COVID-19 and the 2020 law interrupted its efforts in Cedar Rapids.
Those crises pushed lending below targets, but Murphy said the organization is seeing an uptick. In fiscal year 2022, the budget year that ran from July 1, 2021, to June 30, 2022, the organization made 44 loans totaling $2.3 million.
Murphy said he would like to increase to 75 in Cedar Rapids, and the organization has made a big splash with realtors knowing that Neighborhood Finance Corp. is in the market as a lender and understands its value proposition.
The organization targets homes that would otherwise not be targeted for home ownership because they have deferred maintenance and allows people to purchase the home for possibly less money with assistance provided for home renovation and down payment.
“It really helps neighborhoods stay strong,” Murphy said.
The organization, like other lenders, is also struggling with rising mortgage interest rates, which have soared to nearly 7 percent, well above the 4.5 percent rate that the ‘organization envisioned when it established the lending objectives.
“We’re pretty excited that we’re not that far away,” Murphy said.
He said the city has committed to the financial support needed to support the organization’s move to increase the forgivable loan amount to $15,000, up from $10,000. Murphy said that, along with down payment assistance, has helped keep loans going while potential homebuyers have struggled with higher interest rates.
To get the organization off the ground in Cedar Rapids, the city initially agreed to contribute $1 million a year for five years to cover the forgivable loans. While that is over, the city provided another $500,000 for fiscal year 2023, the budget year ending June 30, 2023.
Neighborhood Finance Corp. also received $250,000 in federal American Rescue Plan Act funds that the city allocated to cover operational losses, which Murphy said he anticipates will be the last needed for operational support.
Another allocation of $391,445 in city-awarded ARPA funds will support an Energy Advantage program to be released in January. The program provides deferred loans for energy efficiency improvements to promote sustainability and help reduce utility costs for low- and moderate-income households.
Property becomes “viable for ordinary people”
City Councilman Scott Overland, who helped bring the Des Moines-based organization to Cedar Rapids, said Neighborhood Finance Corp. has become more rooted in the community to fill the need and help people become homeowners.
Also, when individuals invest in renovating older homes, he said, that spurs renovation of surrounding homes.
“NFC is playing the role we envisioned it would play,” Overland said. “It’s always been a long game with this, and the organization is running it. I think it’s definitely here to stay.”
Mullinex said he wishes more cities had similar resources.
“It made someone like me think I would never own my home at 23,” Mullinex said. “… You don’t have to have some crazy job where you make a lot of money to own a house. This makes it doable for ordinary people.”
Tracy Tracy, 53, discovered that it’s never too late to become a homeowner. She and her husband, Rodney, 56, married in 2016 and lived in rental properties. Rodney, who was a handyman, fixed things up and left the place a little better than when they found it.
According to the National Association of Realtors, the black home ownership rate is 43.4 percent, nearly 30 percentage points below the white home ownership rate of 72.1 percent.
But when the Tracys’ landlord informed them of plans to sell the property they were renting in the Mound View neighborhood, Tracy said she didn’t want to move again. They had liked their neighborhood and their house, filled with lots of plants, nature-inspired decor, and family photos.
With the help of the staff at Neighborhood Finance Corp. and real estate agent Tonya Marie with Exit Kingdom Realty, Tracy said she learned the lingo of home ownership and began to see it was something she could achieve.
“I want to be settled, stable,” Tracy said. “I don’t want to keep moving. I’m too old for that now. … I want to have something. I want to have something. I have two grandchildren. I have a daughter. I want them to have a place to come.”
He was able to use the help of Neighborhood Finance Corp. to buy the house Now, the Tracys are fixing up the attic, perhaps creating a space where the grandchildren could play. They are also fixing the roof, gutters, kitchen roof and garage.
“I’m so happy and so stress-free right now,” Tracy said.
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