“It is the house.” Omaha organizations help low-income homebuyers as hurdles rise

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As Jose Castañeda entered the living room, he closed the door behind him. He looked to his left, then to his right. There were no sofas or rugs on the fresh gray carpet. No pictures on the beige walls. In fact, the only thing Castañeda had in the whole house was the pillow under his arm.

But as he spread a blanket on the floor and lay down to sleep in silence, he couldn’t help but feel lucky.

Thank you, my God, he thought. “It is the house.”

Castañeda bought the 1,080-square-foot home in April 2021. Just off the South Omaha Bike Path near Vinton Street, it’s the 48-year-old’s first home himself. For years he struggled to find a permanent home. Sometimes he slept in the basement of a friend’s house when he had nowhere to go, bringing his service dog, Tiberius, who helps Castañeda, who is almost completely blind. His credit was terrible, and the monthly child support payments left little or nothing to spare. The idea that he would ever have a home seemed incredible.

But now, when he’s cooking eggs in the morning and listening to 50s girl band music, or leaning back against his soft leather couches, it’s hard to believe it’s all really his.

“It wasn’t just a process to get my spot,” Castañeda said. “It was a process of getting there mentally, physically and probably spiritually as well. And now look where I am now.

Jose Castañeda, 48, stands in his south Omaha home on February 5, 2022. Photo by Chris Bowling.

Without good credit, a well-paying job, or financial assistance, owning a home in Omaha is difficult, especially as demand increases in a dwindling housing stock where outside investors nationwide are buying more homes than ever. To get his house, Castañeda paid $10,000 more than the asking price, which had already doubled in value over the past 4 years. And because owning a home is one of the primary ways families build wealth, lack of access can contribute to generational poverty as well as housing instability.

But solutions in Omaha exist. Whether through rent-to-own models or housing education courses, organizations are providing low-cost or no-cost ways for people to get a down payment, a mortgage, and their own home. But it is not an easy task.

Denise Parker, assistant director for homebuying education with Family Housing Advisory Services (FHAS) worked one-on-one with Castañeda for about a year before he was able to find a home. Parker met Castañeda through the organization’s workshops. FHAS, established in 1968 after the passage of the federal Fair Housing Act, which prohibited discriminatory housing practices, works to eliminate poverty and homelessness in the metropolitan area through education on topics such as education before and after buying a home as well as financial education.

In these workshops, Parker said, presenters go through the process of buying a home, including:

  • Determine how much it costs to buy and own a home as well as create a long-term budget;
  • What a mortgage lender will look for on a bank statement;
  • The credit score a buyer should have;
  • The cost of home insurance and other types of insurance;
  • What to look for during a home inspection;
  • How to understand a purchase contract.

Parker said they serve about 200-300 people a year and never turn people away. Occasionally the month-long workshop will reach capacity, but Parker said they can find a place in the following month’s course. Most people come away surprised by the amount actually invested in buying a home.

“I can’t say how many people are attending the workshop and they’re just amazed, like, ‘I can’t believe this,’ ‘This is so awesome,’ ‘Thank you so much.'”

Castañeda was one of those people. His colleague from Outlook Nebraska, who makes durable cleaning materials like toilet paper, told Castañeda about classes when they found out about his housing situation.

Castañeda’s family moved to Omaha in 1992 when he was 18 to get away from South Central Los Angeles and gangs like MS-13. In Omaha, Castañeda stayed out of trouble, but his family had little money and it was hard to find work without a high school diploma. In 2001, he owned a house with his then wife until the end of their marriage. A few years later, he was the victim of a car accident which left him almost blind. Over the years, his financial situation deteriorated as he moved from rental to rental, and his credit rating fell to a “poor” rating. At Outlook Nebraska, he makes about $13.75 an hour, he said, and also receives money each month through Social Security, but child support payments usually leave him with a fraction of this check.

Even still, he didn’t think he needed the FHAS homebuying course.

“My reaction was like, f**k that shit. For real,” he said. “Like, why should I go? You know? But I got out and stayed there for eight hours. And I was like, ‘Oh, okay. Costs.'”

What transformed Castañeda was realizing not only how little he knew, but how possible owning a home could be if he stayed on track with the FHAS program. Through mentorship, Parker helped him get his debt under control, budget his expenses and boost his credit rating. Upon completing the course, he also received a certificate of completion which helped him secure grants through the Nebraska Investment Finance Authority, an organization created by the Nebraska Legislature in 1983 to make housing more accessible. . Castañeda was able to get around $5,000, which, added to the $10,000 he saved, gave him enough for the down payment on his $155,000 one-story house.

“I felt quite confident. I cannot recommend [FHAS enough]. From my heart,” he said. “If I did it, I think anyone can do it.”

But not everyone succeeds. Even if people pay a dime, get their credit score back over the cliff and get grants, Parker said there’s no guarantee someone will find a home.

“I just spoke to a client yesterday who has been going through this since 2016,” she said. “You know, they get on the right path and… then life happens and things hold them back. And then their credit has suffered and so they have to rebuild it.

The problems are exacerbated in Omaha, and most of the nation, faces a declining supply of increasingly expensive housing. Last year, investors bought a record number of homes in the nation’s largest cities, buy 30% of homes in black neighborhoods – 2.5 times more homes than in other ZIP codes according to a Washington Post analysis of data from real estate firm Redfin.

Parker said affordable, low-income homes that don’t need expensive repairs are extremely hard to find under $100,000. Most good, low-cost homes range from $150,000 to $225,000, she said. But even these are hard to grasp because more middle-class people are looking for cheaper options as house prices rise outpace rising incomesaccording to the wall street journal. Omaha homes spend an average of nine days on the market before being foreclosed, according to data from Redfin.com in early February.

Recently, nonprofits and politicians have highlighted the problem with figures putting Omaha’s affordable housing shortage at 80,000 units. While organizations such as Saint-Nom housing, habitat for humanity of Omaha and others have prioritized building accessible housing for low-income people, demand far outstrips production. Federal COVID-19 relief funds will likely be used to address housing issues, but how much will be spent and what the money will go to is still up for debate.

Parker’s hopeful Omaha and Nebraska will give his housing market the boost it needs, especially for low-income people.

Because owning a home is not just about having a place to live. Parker said when FHAS asks why people want to buy a home, they get a slew of answers.

“Every time, repeatedly, they want to create wealth. They don’t want to give all their money to one owner. [They say], ‘I want something to happen to me.’ It’s always mentioned. They talk about having more freedom, that they can have what they want in their house and decorate it the way they like it.

For Castañeda, he wanted all of the above. He felt humiliated sleeping in the basement as a man in his 40s. He drank, missed work and hit rock bottom in 2019, he said. He could have easily lost his job, but his bosses and colleagues were patient. Just like Parker, who took her calls often and at all hours of the night to talk about the houses he was visiting.

It makes it poignant to think about where he is now — hanging an expensive, authentic Los Angeles Lakers Lebron James jersey in his own closet or walking around his finished basement and imagining one day building a master suite. Even the little things get to her, like the feeling of a clean house or the smell of a freshly mixed batch of salsa. At the end of the day, it’s all up to him. And right now, no one can take that away from him.

“If you’re from where I’m from, I mean look at this,” he said, spreading his arms just inside the front door of his house. I mean, I don’t live rich. But I live comfortably.

contact the writer at chris@thereader.com


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