Intimidating to nearly everyone, the home buying process can seem impossible to millions of low- and moderate-income Americans.
Beginning in 1986, ACORN Housing’s mortgage counseling program started a program to help first time homebuyers learn about and be better prepared for the process of buying a home. In their first 15 years, they helped over 50,000 families achieve their dreams of homeownership.
ACORN Housing also helped thousands of existing homeowners avoid foreclosure and preserve their homes by helping them negotiate with lenders. They frequently worked with victims of predatory lending as well as those who were facing serious and unexpected financial hardships.
One of the most uncomfortable parts of the homebuying process can be approaching bankers or contending with mortgage brokers, not knowing what to expect. ACORN Housing offered first time homebuyers a chance to meet with counselors at no charge in the local ACORN Housing office to review their savings and credit history, in order to find out whether they could qualify for a mortgage.
Before 2003 and the passage of the Fair and Accurate Credit Transactions Act (FACTA), which updated the Fair Credit Reporting Act, credit reportng agencies were not required to provide a free annual credit report to consumers. Before FACTA, requests for a copy of your own credit report had to be done through a restricted-access system. There was a fee for the report, and many lenders charged an additional fee for pulling tthe report.
ACORN Housing counselors would pull a prospective buyer's credit report for them to review at cost (about $10 in the 1990's), and would then help file any needed disputes and corrections. Making sure buyers had a clean and accurate credit report prior to applying for a mortgage greatly increased a buyer's confidence, and their chance of success. ACORN Housing counselors also taught ways to resolve credit problems, and could help design a down payment savings plan.
Buyers still worked with the bankers, but had someone "on their side" to help them understand the legal language and financial remifications of the various loan options.
ACORN Housing also offered first time homebuyers a series of free and low-cost classes and seminars to help prepare them for the home buyng process.
ACORN Housing's first time homebuyers classes covered topics such as:
- Determining how much you could afford for a monthly loan payment
- Additional charges that might be part of a loan besides payment and interest (such as property taxes and homeowner's insurance)
- Understanding the basics of a loan: qualifying, interest rates, points, mortgage insurance, etc.
- How to choose a lender
- Pre-qualifying for a loan before starting to work with a Realtor
- How to choose the right type of loan for your current situation and future plans: traditional, balloons, adjustable rate, etc.
- Selecting a Realtor
- Comparing housing options (house, townhouse, condo, etc.) and the costs/fees associated with each (association fees, maintenance, etc.)
- Viewing and comparing homes
- The process of making an offer and providing "earnest money"
- The importance of making the offer contingent on passing a home inspection
- Choosing a reputable home inspector
- The closing process
ACORN Housing's programs gave many people considering the idea of purchasing their own home the tools, education, and confidence to start the process.