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NeighborWorks Campaign for Homeownership Approaches $6 Billion in Mortgage Lending
By James Comtois
The NeighborWorks Campaign for Homeownership, an initiative created and sponsored by Washington, D.C.-based nonprofit organization NeighborWorks America, has helped nearly 44,000 families achieve homeownership and generated nearly $6 billion in new mortgage lending between January 1, 2003 and June 30, 2006.
In the quarter, NeighborWorks organizations generated more than $597 million in new mortgages, increasing quarter-to-quarter mortgage volume by 10.7%. The results for the campaign contrast with the slower mortgage-lending trend seen in the broader home loan market.
"The results for the first half of the year show that NeighborWorks organizations continue to be effective in finding ways to help more low- and moderate-income families become home owners," said Ken Wade, CEO of NeighborWorks America, adding that 92% of the homebuyers the campaign serves are first-time home owners, and more than 40% of the borrowers are female-headed households.
More than 150 NeighborWorks organizations in 46 states plus the District of Columbia and Puerto Rico participate in the campaign.
Traditional mortgage lenders who have partnered with local NeighborWorks organizations write most mortgage loans generated by the campaign. However, NeighborWorks organizations also provide first and second mortgages and downpayment assistance and other financial services that help the homebuyer to close the deal. Wade noted that cumulative first mortgages made by NeighborWorks organizations increased quarter-to-quarter to $165 million, up 8% from $153 million at March 31, 2006. Second mortgage loans increased to $111 million on June 30, from $110.8 million at the end of the first quarter 2006.
The NeighborWorks Campaign has targeted minority households, which lag behind whites in homeownership. Approximately 21% of the Campaign's recent homebuyers are African-American. Data provided by HMDA indicate that only 6% of mortgage loans issued by the conventional market in 2003 (the most recent year for which data is available) served African American buyers. Similarly, 24% of the campaign's recent borrowers were Hispanic, as compared to 10% of loans within the conventional market in 2003.
The NeighborWorks Campaign has helped first-time homeowners across the country, particularly in both high-cost urban markets and underserved rural communities. For example, South County Housing, a NeighborWorks network member in Gilroy, Calif., reported $37.2 million in cumulative mortgage lending in the second quarter, an increase of $7 million (20%) from the end of the first quarter. Meanwhile, Neighborhood Housing Services of Reading, Inc., in rural Reading, Pa., grew its lending portfolio to $23.3 million in the second quarter, from $21.3 million in the first.
NeighborWorks America provides financial support, technical assistance and training for communities across the nation, including the NeighborWorks network, a nationwide network of nearly 4,500 urban, suburban and rural communities across America. These organizations engage in revitalization strategies that strengthen communities and transform lives. In the last five years, NeighborWorks organizations have generated more than $10 billion in reinvestment and helped more than 780,000 families of modest means purchase or improve their homes, or secure safe, decent rental or mutual housing.
Since 1993, the NeighborWorks Campaign has assisted more than 100,000 low- and moderate-income families become homeowners.
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