Michele Watson

Virginia Housing Development Authority

Homes Within Reach Conference

Harrisburg, Pennsylvania

November 16, 2015

Strategies for Mainstreaming Housing Education and Counseling

Changing Demographics

• The October 2014 issue of National Mortgage Professional interview with Mortgage Bankers Association (MBA) President and CEO David H. Stevens noted that:

“the fast-rising number of non-whites is going to require a

new consideration of housing finance solutions for new

homeowners”.

Mr. Stevens went on to stress….

“dramatic changes in U.S. demographics will create a

significant shift in how the housing finance world

operates.”

Millennials Lack Knowledge About Credit: Experian*

• While 71% of millennials surveyed were confident about their credit knowledge:

32% did not know their credit score 67% had questions about how scores were

created Millennials’ perception of their credit scores and debt did

not match with reality Of individuals surveyed they estimated their score of 654

versus the actual of 625

• Article in National Mortgage News on November 4, 2015 by Jacob Passy

Demographic Breakdown of Virginia

• White Households 70.9%• African American 19.7%• Asian 6.3%• Hispanic or Latino 8.9%• Two or more races 2.9%• Foreign born 11.3%

Demographics and the State of Virginia

• Hispanics are the fastest-growing minority group in Virginia.

• Representing almost 9 percent of the Commonwealth’s

population, their numbers have almost doubled since 2000. (Clapp, 2011)

• Many are recent immigrants with misconceptions about the process of buying a home.

VHDA Historical Perspective

• Creation of a Homeownership Education Department at VHDA in 1994

• Develop a Homeownership Education Manual and tutorial

• Homeownership Education Program launched in 1994 with VHDA Staff teaching classes

• “Encouraged” all prospective Homebuyers to take the Homeownership Education Class prior to signing a Real Estate Contract

Historical Perspective cont’d.

• 1998

- VHDA and HUD (VA office) enter into a partnership

agreement: VHDA is responsible for statewide curriculum •1998

- Partnership with Military Installations: Fleet and Family Services•1999

- VHDA releases first ever “Train the Trainer” Initiative • 2003

- VHDA releases an online homebuyer education course • 2007

- Homebuyer Education is mandatory for all VHDA Loans

- VHDA Online course is updated into a new platform • 2011

- VHDA REACH Housing Counseling Grants• 2012

- Update In-person Manual and create an interactive

online course: New sections on Post-purchase

VHDA Train the Trainer Sessions

• 800 Qualified VHDA Trainers– Lenders, Real Estate Agents, Non-profits, Home

Inspectors, Closing Agent

• VHDA provides training for and average of 400 partners annually

• VHDA provides up to 15 Train the Trainer sessions throughout the state

VHDA Homebuyer Handbook

Homebuyer Education Class Audits

• Quality Control– Audit / “Secret Shopper”– Ensures consistency throughout the state

• On-line classes create new challenges for ensuring Quality Control

Homebuyer Education

Challenges and Impediments to Successful Housing Counseling

• Getting the word out – an “informed borrower is a successful borrower” - borrowers should drive the demand

• Flexibility in reaching customers – weekend hours critical

• Credit Counseling vs. Mortgage Ready Counseling

• Funding – a constant source of concern for service providers

• Maintaining pool of providers

Questions?

Michele G. Watson

Director

Homeownership Strategic Partnerships

VHDA

(804) 343-5748 michele.watson@vhda.com