Homebuyer Education and Counseling: Examining Rural Provider Networks in Texas, Florida and South Dakota© Housing Assistance Council, 2000 Overview Texas has a wide range of homebuyer education and counseling (E&C) providers affiliated with several networks. National networks operating statewide include:
Diagram 1: Texas homebuyer E&C organizations  As the above diagram illustrates, there is a considerable degree of overlap in the national networks that are active statewide in Texas. The exact percentage of members that are active in rural areas is not known; however, information on the following individual E&C initiatives12 will give some idea of the challenges and issues present in Texas rural areas, particularly the colonias along the Texas/Mexico border13 (see Map 1). Map 1: Texas Border/Colonias Counties Home of Your Own Program Home of Your Own (HOYO) is a multi-county program with office sites in El Paso, Austin, Houston and McAllen. Funded by a grant from the Texas Planning Council for Developmental Disabilities, United Cerebral Palsy of Texas started HOYO as a project to help people with disabilities attain homeownership. Each HOYO office partners with a local E&C provider group, which includes HOYO clients in their regular classes in order to mainstream them. The offices also form coalitions of housing, legal, financial, and advocacy professionals to meet once a month to discuss homeownership issues for persons with disabilities in their area. Although the program is not specific to rural areas, it is as geographically inclusive as possible and the area around McAllen is very rural. Fannie Mae Foundation Initiatives (Proyecto Azteca) The Fannie Mae Foundation is currently working with two community colleges--El Paso Community College and University of Texas Pan American (UT Pan Am)--to provide grant money for homebuyer education and counseling in their areas. El Paso Community College has a grant for financial literacy classes (using Fannie Mae material) to educate its own student population about homebuyer issues such as credit repair. The Foundation has also provided a four to five year grant and homeownership guides to UT Pan Am for its joint effort with the Rio Grande Empowerment Zone to build 35 homes and renovate 150 in rural areas along the Texas/Mexico border. In a second initiative--the Texas Coalition Initiative--Fannie Mae is beginning to work with the Texas Coalition for Immigration/Refugee Assistance to link homebuyer E&C classes with the Coalition´s English as a Second Language (ESL) and citizenship classes. This statewide effort is significant in that it promotes homeownership for Hispanic immigrants--who currently comprise the largest racial/ethnic group of new homebuyers. A third initiative--the Farmworker Housing Initiative--is still in the implementation stage. Fannie Mae is planning to develop financial literacy materials geared toward homeownership for predominantly Hispanic farmworkers in Washington state, California, Texas and Florida. The materials are intended to help farmworkers to move from a cash-based economy to a credit-based one so that they can build the financial assets to eventually move to mainstream homeownership. In Texas, Fannie Mae is working toward a partnership with Proyecto Azteca, a local nonprofit that serves as both housing developer and lender in the border/colonias region. Proyecto primarily uses HOME funds for their program, although they are also notable for being the only organization in the colonias area that packages RHS Section 523 Rural Housing Site Loans. Their program focuses on helping recent immigrants inside the U.S. border build safe homes and improve the construction in ones that have already been hastily improvised. Proyecto also requires their clients to go through housing education classes before they are allowed to begin the construction of their homes, with various components such as legal documents, budgeting, tax appraisal and insurance. The Texas Statewide Homebuyer Education Program Prior to 1997, there was no significant provision of housing counseling services by the Texas Department of Housing and Community Affairs (TDHCA). However, in 1997 the Texas legislature passed HB 2577. The bill mandated the development and implementation of a statewide homebuyer education program, to be administered by the TDHCA. The resulting entity, the Texas Statewide Homebuyer Education Program (TSHEP), was charged with bringing comprehensive homebuyer E&C to all 254 Texas counties. In compliance with the legislation, a working group was formed to conceptualize the program that included many major networks already active in the state (although no local groups or rural advocates were included). Members of the current workgroup are:
Out of six applicants for a training grant to certify providers statewide, NRC was chosen, with training planned for June 1999. The TSHEP legislative summary states that when the E&C programs are scheduled for local implementation, the first groups to be targeted should be in underserved areas of the state. However, an officer with NRC (a key player in the TSHEP drafting process) commented that the program "doesn't have any special rural slant other than the first group we will train may be the agricultural agents." TSHEP has formulated a comprehensive referral list of 173 local E&C providers. Only 28 of them (16 percent) are unaffiliated with any major national network (NFCC, NRC, HomePath or government agencies). However, only 73 (42 percent) are officially HUD-approved, and local practitioners say that there are many more small, unaffiliated groups unaccounted for--all of which pose problems for statewide standardization of curricula and certification. In addition to the above initiatives, the rural activities of the national E&C networks in Texas are as follows: National Federation of Consumer Credit The National Federation of Consumer Credit (NFCC) network is the most extensive network in the state (and in Florida and South Dakota as well) with a total of 11 central offices and 137 small satellite offices. Consumer Credit Counseling Service (CCCS) offices (local branches of the NFCC) comprise 54 percent of all HUD-approved organizations in the state. Although the network does not do homeownership educational courses, it is probably the greatest counseling resource available and many E&C providers will refer class attendees to them. While not all of the offices focus specifically on homebuyer issues, they are the most reliable resource for client credit repair, which is the greatest factor in low-income applicants being refused for Section 502 direct loans and other affordable housing programs. NeighborWorks members There are dozens of NeighborWorks groups throughout Texas, with four covering rural areas. The Neighborhood Reinvestment Corporation provides the groups with training and funding that includes homebuyer education and counseling. NHS (Neighborhood Housing Services) of Dimmit County serves a three-county area in the border/colonias region (LaSalle, Dimmit and Zavala) that has a population of roughly 35,000 combined. There appear to be no other E&C delivery networks present in this area, and the three counties served are on the USDA Rural Housing Service´s list of the 100 most economically underserved counties in the United States. E&C Processes and Curricula E&C Availability Statewide, homebuyer E&C is available in a variety of forms, with no clear pattern of what kind is most prevalent. Several networks offer both classroom education and in-person counseling; however, they may be offered in different combinations or settings. In addition to their members' activities, some networks may also offer training to E&C providers outside their network. While local Rural Development offices have been directed by the state office to support nonprofits in E&C activities, they do not provide funding support. Rural Development agents are available to provide E&C information and several occasionally speak at homebuyer education classes.
Some local nonprofits have made their own E&C modules available along with a unique delivery process. For instance, Proyecto Azteca has mandatory classes for each client before s/he goes through the rest of Proyecto´s home construction program.
All organizations offering pre-purchase classes (NFCC, NeighborWorks, HOYO and Proyecto) do so on a regular basis, typically at least once a month. Curricula While the TSHEP program is still in its preliminary implementation stages, a standardized curriculum has been developed which uses Fannie Mae, Freddie Mac and NRC materials as the core of the curriculum. Once implemented, the core class content can be modified to suit the particular needs of a set of clients (for example, the workgroup is planning to cover land ownership issues peculiar to the border/colonias region in add-on sessions). The main content of the program is pre-purchase education; however, many of the nonprofit affiliates do post-purchase counseling as well (such as the NeighborWorks groups). Fannie Mae materials are available in English and Spanish. The following matrix indicates that, while E&C network members may be provided with standardized core curricula, individual groups often put together their own in-house materials, either written specifically for their clients or combining elements of other curricula with their own material.
Many of the "in-house" curricula not only serve the specific needs of local clients; they are also geared toward preparing potential borrowers to qualify for their own specific loan programs. Consequently, across-the-board standardization of homebuyer curricula may serve more to burden their E&C efforts than to assist them. While not all of the national organizations have bilingual materials, most of the organizations are able to find other bilingual material (typically Fannie Mae) or translate their own in-house curricula. Processes and Tracking The standardization of education and counseling processes also varies between groups and among networks. Practitioners at statewide offices (Texas Association of CDCs, TDHCA and Rural Development) observe that Texas homebuyer E&C in general is ad hoc, and even "haphazard" in rural areas. However, at the local level some practitioners have a much more standardized approach for each of the clients or client areas. The El Paso YWCA/CCCS process consists of an orientation session, followed by a pre-screening session and their First Time Homebuyer Education Course. They also provides one-on-one counseling for homeowners at risk of foreclosure. The HOYO E&C process is very standardized--even between all of the coalitions. Finally, Proyecto Azteca has a standardized process for all of its clients that is tailored to meet the needs of their unique housing development program. They do not address credit issues through individual counseling, as these issues are not relevant in qualifying for their loan program; however, they do attempt to provide general education on budgeting by having credit counselors come in to teach courses. Nearly all of the local affiliates who conduct classes track their attendees after they have finished their course. In fact, Proyecto, NHS of Dimmit County and HOYO all track their clients from initial education to closing on a house (information was not available on YWCA/CCCS El Paso). However, overall client tracking in Texas is very weak, with little information available on the number of class attendees or counseling recipients who achieve homeownership. Rural Outreach Even though there are several new initiatives being generated in Texas, rural outreach is still a severe problem. The panhandle and the Texas/Mexico border are the least served by affiliated and accredited homebuyer E&C programs. According to the Texas Association of CDCs and the state Rural Development office, the vast majority of rural counseling is provided by small, unaffiliated community organizations. Small local nonprofits are often in a constant struggle to stay solvent and lack the resources to provide the levels of E&C that they see a need for. In the three-county area served by NHS of Dimmit County (Dimmit, La Salle and Zavala) there are no other delivery networks at all. Consequently, national or state networks with limited funds simply do not know these organizations exist or have more pressing priorities in high-growth areas. Programs that have rural outreach as their express mission (the Farmworker Housing Initiative) have, as of 1999, not yet been implemented, consequently it is too soon to assess their impact. Finally, the unaffiliated organizations in rural areas not only have to deal with lack of support, they also are left with the burden of servicing large areas with little infrastructure or transportation. Funding For 1998, TDHCA has a budget of over half a million dollars earmarked for education and counseling. The funding from the 1998 HUD SuperNOFA (Notification of Funding Availability) was for a new national E&C funding effort targeting state housing agencies instead of individual E&C organizations or networks for support. The resulting budget 1999 budget for TDHCA is: 1998 HUD SuperNOFA ......................................$380,000 TOTAL ................................................................$655,000 However, there was virtually no TDCHA program available before 1997, and the HUD SuperNOFA money (over half of the budget) is only a one-year grant; consequently, the agency will sooner or later have to look for replacement funds. The vast majority of money will go to E&C provider groups, with grants of up to $20,000 to $70,000 will be spent on the NRC provider training sessions. Statewide, the networks with the most solid funding seemed to be the NeighborWorks organizations (funded completely by the National Housing Services of America) and HOYO (on its third year of a five-year grant from the Developmental Disability Council). All of the education and counseling programs studied for Texas are free of charge to clients; however, YWCA/CCCS of El Paso does receive $100 per house closing from the City of El Paso First Time Homebuyer Program. While exact numbers were not readily available for the rest of the organizations interviewed, it is clear that there is virtually no stream of funding for rural areas as a whole or for the isolated rural nonprofits that serve them. In addition, none of the organizations contacted for this study were receiving any financial support from either local or national banks for E&C activities. |
