With these criteria in mind, we've reviewed dozens of programs dedicated to helping people become homeowners. Here are the 10 we believe are the most innovative.
Champlain Housing Trust: This Vermont nonprofit organization tries to give low- and middle-income people the ability to own a home through its shared-equity model, which occupies a middle ground between renting and owning. The shared-equity model accomplishes two key goals for its beneficiaries and for communities. First, it helps low- and middle-income people save money by requiring mortgage payments without having to worry about the down payment (often, the sticking point for first-time buyers). Second, it helps to preserve affordable housing throughout the community.
See National Journal's in-depth profile of Champlain Housing Trust here.
Family Self-Sufficiency Program: Created in 1990 by HUD, this program helps people who live in public housing, or who rent via federal housing vouchers, build up savings. It's a model for other programs that try to encourage renters to amass cash. The program also encourages participants to enroll in school and advance their education; learn more about budgeting and parenting; and land better-paying jobs, so they can support their families. At the end of the five-year program following graduation, the participants receive whatever money they've accumulated in an escrow account and can use it for whatever purpose they chose, including buying a home.
See National Journal's in-depth profile of FSS here.
Fifteen-Year Fixed Mortgage: The idea of using a 15-year fixed mortgage to help people quickly build up assets is the brainchild of two policy wonks out of the conservative-leaning American Enterprise Institute. The thinking is: If people can pay off their mortgage faster, then they'll have more equity in their homes over a shorter timeframe, and after 15 years, they'll have no mortgage expenses at all. The nonprofit Neighborhood Assistance Corporation of America rolled out a version of this product last September.
Financial Opportunity Centers: These centers focus on trying to improve the bottom line for low-income people through career and financial coaching. Through one-on-one advising, the centers helps people land better jobs, save more money, and acquire more assets. The nonprofit Local Initiatives Support Corporation operates the network of centers, which have now expanded to over 70 locations in 30 cities.
HAMP: One lasting legacy of the global financial recession is the policy idea that, sometimes, it is wise to allow borrowers to modify their mortgages, particularly if they are underwater or potentially facing foreclosure. The federal government's own program, HAMP, offers one of the biggest blueprints for this idea for mortgages made on or before January 2009. These modifications can help people who are struggling to make mortgage payments, or who find themselves under financial hardship.