Back to previous section
Homebuyer Education and Counseling: Examining Rural Provider Networks in Texas, Florida and South Dakota© Housing Assistance Council, 2000 Permission is granted ONLY to nonprofit community-based organizations to reproduce and/or adapt this document, and only for their own use. The State of Rural Homebuyer Education and Counseling Rural homebuyer education and counseling--at least in Texas, Florida and South Dakota--has a very tenuous existence. Texas and Florida have very impressive numbers of E&C provider groups on a state-wide level. However in Texas, the vast majority of E&C providers for rural homebuyers are unaffiliated, isolated, and struggling for solvency. In Florida, what would otherwise be a strong state-wide E&C program--SHIP--dwindles in rural areas due to lack of partnering organizations. In South Dakota, there are only six homebuyer E&C providers to cover a state with 75,896 square miles of land area and roughly ten people per square mile. In terms of rural outreach, the most impressive network by far is the National Federation of Consumer Credit. While there may be anywhere from two (South Dakota) to 11 (Texas) core CCCS offices, each office is connected to several--sometimes dozens--of satellite offices spread throughout the state that offer individualized debt consolidation and credit repair counseling on an individual basis. There are 137 satellite offices in Texas, 108 in Florida, and 12 in South Dakota, and they typically comprise the majority of HUD-approved providers. However, the degree to which CCCS groups offer homebuyer education classes depends upon the budget of the individual group and the level of demand in the groupīs area. Consequently, rural CCCS groups rarely offer regular classes, and when they do, not all of them are geared specifically toward homebuyer issues. Holistic Programming and Follow-Up The organizations with the most comprehensive E&C programs-- offering both education and counseling in a standardized format--are the Neighborhood Housing Service groups. Affiliated with the Neighborhood Reinvestment Corporation, all of these groups do "full-cycle" E&C that includes prequalification counseling, classroom education, downpayment assistance, and post-purchase counseling 90 days after home occupation. Another program that bears mentioning for its comprehensiveness is the statewide SHIP network in Florida. In order to receive downpayment and closing cost assistance ("free money," one Rural Development agent called it), all applicants must attend a rigorous series of classes, set their own budget and credit goals, and report regularly to their county SHIP office on their progress (the office proactively calls all attendees bi-annually). Finally, the Rapid City Housing Coalition has a highly structured process that also requires goal-setting for class attendees (an initial two-hour session). Attendees are called after the session, with the goal of bringing 100 percent of them back for counseling regarding their goals, any credit repair that they need, and the next steps they need to take. After credit repair has enabled clients to prequalify for a loan, they have a final workshop with realtors, lenders and building inspectors. This program is truly remarkable for a group that has only two part-time paid staff, operates on a $70,000 per year budget, and serves all nine Indian reservations in South Dakota. Rural Innovations A few innovative strategies for rural outreach in homebuyer E&C are currently being formulated. In Florida, HIP, Inc. was able to purchase an RV with money from a local foundation, which serves as a mobile education and counseling office for surrounding rural areas. The RV is equipped with a tarp and folding chairs to hold outdoor education sessions, in addition to a VCR for small-group viewing. The RV is readily visible, with large lettering on the side, and the counselor that does field visits is bilingual. One other approach still being conceptualized by the South Dakota Housing Development Authority is using telecommunications to teach rural homebuyer educational classes by remote broadcast. South Dakota, in fact, already has a 20-site network that is currently being used to teach college courses. While such an approach could be very cost-effective, with the major expenses being curriculum coordination and air-time rental, SD HDA would still need a sizeable start-up grant to pursue the idea in earnest. Funding Even though 1999 has been the best year yet for many organizations, virtually all the funds for all the groups and networks in this study are grant-based. The only group with ongoing, sustainable funding is Florida SHIP, which uses state tax funds. The Texas-wide TSHEP program, in contrast, is planning to launch a comprehensive homebuyer E&C program with a one-year HUD grant that was received only in 1998 or 1999. Even though almost half the rest of the funds will come from the Texas State Housing Trust Fund, the initiative would be crippled without HUD funding. Many national lenders have contended that one of the best ways to insure wide-spread and adequate homebuyer E&C is through partnership with local nonprofits. Unfortunately, many of the local nonprofits studied here are teetering on the brink of insolvency. Even those that are funded comfortably for 1999 state that they will not be able to do the kind of rural outreach that they need or to insure that their funding will be there the next year. AHECI. 1998. Core Curriculum and
Certification Standards. Washington, DC: American Fannie Mae. 1996. A Guide to
Homeownership (available in both English and Spanish). Washington, DC: Fannie Mae Foundation. 1998.
Financial Institutions and Immigrant Homeownership. Roundtable, Hoffman, Daniel N. and Susan M. Wachter.
1994. Qualifying Low-Income Homebuyers: A Private Housing Assistance Council (HAC). 1997.
Housing Counseling in Rural America. Washington, DC: Northwest Area Foundation. 1997.
Preventing Mortgage Foreclosure: Is it Cost Effective? Northwest
Office of the Comptroller of the Currency (OCC). Administrator of National Banks. 1997. The
Single- Quercia, Roberto G. and Susan M.
Wachter. 1996. Homeownership Counseling Performance: How Can it U.S. Department of Housing and Urban Development. 1983. Report to Congress on Housing Counseling. Washington, DC: Office of Policy Development and Research. |