How LI's free homebuyer education programs are paying off

Seven years after Messiah Brown and his wife, Jessica, were laid off on the same day from different jobs, the Valley Stream couple purchased their first house, moving in last week.

Realizing their dreams of homeownership after a devastating hit to their finances is due in part to guidance from Long Island Housing Partnership, Messiah Brown, 44, said.

The partnership, like other Long Island housing groups, offers free classes and counseling to first-time homebuyers, helping them budget, repair credit, plan to save money and get the right mortgage.

The Browns started house hunting in 2017, but their finances were lacking, and after meeting with an LIHP mortgage counselor, they created an action plan, finally getting a mortgage in the fall of 2019 after increasing their credit scores and saving money from Messiah’s second job.

When they went back to LIHP in October, “the counselor said, ‘Hey, you’re ready to go whenever you say you’re ready,’” Messiah Brown said.

The four-bedroom Valley Stream house they bought for $462,000 is large enough for the family of five to live comfortably.

“It was a long process but after getting all my ducks in a row, the Long Island Housing Partnership really made it so much easier,” Brown said. They didn't qualify for any grants but the guidance and counseling were a big help.

Michelle Abreu, the counseling program manager for LIHP, said many first-time homebuyers are like the Browns: wanting to buy a house but needing to work on their finances.

Abreu said most people don’t anticipate added expenses like closing costs, so they teach financial literacy as part of the program and sometimes send people away with a plan for what they need to fix.

“We have a lot of repeat clients who come back,” she said. “They leave here with an affordability analysis and an action plan on what the next steps are.”

Once someone looks like a good applicant, LIHP sends a mortgage application for the buyer to one or more banks, complete with their credit reports, a breakdown of their income and credit.

“That’s the main thing, we do the shopping with them while they’re here in the one-on-one session,” Abreu said.

They worked with 700 people in 2019, the counselor said, with 284 people closing on homes in 2019.

Julie Stern, Community Housing Innovations’ director of homeownership and homeowner education and counseling, teaches free, 90-minute orientations every month, and directs people to meet with the group’s certified counselors, an important step to creating a plan of action for each specific person.

“There is no magic bullet” to qualifying for a mortgage and buying a house, she said. But in general, “people have to really clean up their debt.” They must also be realistic about what they can afford, taking into account taxes, closing costs, insurance and other costs, she said.

“I think people are really wishful thinking, which is good … but they also need to know reality,” Stern said.

To that end, CHI has a real estate agent and banker attend the first-time homebuyer classes “to tell them the hard truths.”

Like Long Island Housing Partnership, the goal is to get people into a house they can afford. If they can’t do that, counselors identify areas that need help, creating a budget plan and an action plan.

“They have homework,” Stern said.

If people earn 80% or less of the area median income set by the U.S. Department of Housing and Urban Development, they can apply for grants to help with a down payment, closing costs, or rehabbing a house. The area median income for a family of two as of May 9, 2019, was $99,188.

Long Island Housing Partnership has a community land trust that sells discounted houses through a lottery to people like Lenny and Jennifer Van Essendelft of Selden who are buying a four-bedroom Patchogue house worth $422,000 for a far less $230,000.

The land trust rehabilitates dilapidated and abandoned “zombie” houses — or in the Van Essendelfts' case, has demolished the house and is building a new one in its place — selling the new owner the house, while the trust maintains ownership of the land.

Jennifer Van Essendelft heard about the program from her brother, John Nelson, who purchased a three-bedroom Patchogue house appraised at $376,000 for $214,000 after state and federal grants were applied.

Several of the Long Island housing groups also offer online courses, either through eHomeAmerica or Framework, but they cost between $25 and $99 and don’t have the benefit of a dedicated in-person counselor who can go over specific details of a homebuyer’s credit, income and savings.

Community Development Corporation of Long Island also offers free orientation classes monthly and one-on-one mortgage counseling.

Tricia Gleaton, vice president of the homeownership center, said each month 25 to 30 people come through the program and more than than 100 people bought their first house in 2019.

She encourages people to attend the classes because “they just find the process confusing and a little overwhelming,” Gleaton said. “Counselors help them understand qualifying and what a lender looks at.”

Gwen O’Shea, CEO of Community Development Corporation of Long Island, encouraged first-time homebuyers of all income levels to attend the classes and counseling because “it’s complex; from understanding property taxes to insurance … how much money you should have left at the end of the month. That’s necessary at every income level.”