Building a future

Strawberries are blooming bright red in Roger Calhoon’s front yard. A red heeler puppy races around inside a fence.

And construction is under way for an arbor over the small back patio.

All of this wouldn’t have been possible for Calhoon without HomeChoice, a program that eases mortgage requirements for low- and moderate-income people with disabilities. Eighteen years ago, Calhoon was lifting some heavy equipment when he slipped and fell. Two discs in his back herniated and a third was crushed, making sitting, standing and lifting painful. The 55-year-old hasn’t worked a steady job since then, surviving instead on Social Security disability payments.

When he’s looked into buying a home in the past, he’s been told he didn’t make enough money. He receives $544 a month in Social Security, plus $350 from his daughter for babysitting his two grandchildren three days a week. Under HomeChoice, however, that was enough for the two-bedroom, one-bathroom home with the big shop in North Spokane. Calhoon bought it in August 2002 for $59,000.

“It’s really great,” Calhoon said of his new house. “I can do what I want with it.”

Spokane County leads the nation in participation in HomeChoice, which national mortgage firm Fannie Mae started in 1996. Of 919 mortgage loans issued nationwide through HomeChoice since the program began, almost 400 have been in Washington state. And more than 25 percent of those — 117 loans worth more than $8 million — have gone to Spokane County residents.

The program is working so well in Spokane County, housing officials say, because of low housing prices and because of a partnership among Fannie Mae, Spokane Neighborhood Action Programs and the Washington State Housing Finance Commission. SNAP and the Spokane HomeOwnership Resource Center pre-qualify borrowers and provide pre- and post-purchase counseling. The commission directs the program statewide and also offers down-payment assistance loans for HomeChoice borrowers, up to $15,000, based on need. That money also can be used to retrofit a home specific to a person’s disability.

The loans themselves are made through banks and mortgage lenders, then are sold to Fannie Mae.

Shortly after Fannie Mae announced the HomeChoice program, the Housing Finance Commission and Washington state’s Department of Community Trade and Economic Development invited SNAP and other industry professionals to figure out how the program could work in Washington.

Fannie Mae invited members of the state coalition to Washington, D.C., for training in HomeChoice underwriting, qualifying and counseling of program participants. In 1997, SNAP began marketing the new loan program in the Spokane market.

Through HomeChoice, borrowers may qualify for a mortgage with as little as 3 percent down. Other financial requirements are relaxed as well. Gifts or grants can be used toward a down payment and the income received by live-in caretakers or roommates can be counted as income. Also, the credit history of legally appointed guardians can be used to help the borrower establish credit. And things like phone bills and utility bills can be used to establish credit.

Borrowers may have an income up to $61,000 for a family of three or more and can purchase a home costing up to $200,000.

“Our mandate is to figure out how to provide housing for all sectors of the country,” said Heyward Watson, director of Fannie Mae’s Washington State Partnership Office. Fannie Mae is the country’s largest source of financing for home mortgages. “We thought we could make it work.”

And though this program is geared solely toward lower- or moderate-income people with disabilities, HomeChoice is drawing from a huge population. Figures from the 2000 Census show that one in every five people nationwide has a disability. In Washington, that number is 18 percent of the population, or slightly more than 1 million people.

HomeChoice allows participants to devote up to 50 percent of their income to housing payments, whereas standard mortgages cap the debt-to-income ratio at closer to 40 percent, Watson said. Though this may appear to put program participants at greater risk of foreclosure, the Housing Finance Commission said that hasn’t been the case. Since the first loan was made in Spokane County in 1998, only five of the 117 HomeChoice loans here, or about 4 percent, have been foreclosed upon.

By comparison, statistics provided by SNAP show that from 1998 to 2002, 25,844 homes were sold in Spokane County. In the same time period, 4,755 foreclosures were recorded, or 18 percent.

SNAP officials said the low foreclosure rate can be attributed to the extensive counseling HomeChoice participants receive before and after buying their home. The agency is approved by HUD to conduct such counseling and has been providing it since the late 1980s. Screening interviews are conducted to determine eligibility and counselors work one-on-one to prepare borrowers for the financial responsibilities. Home Buyer Education classes also are required before borrowers are referred to lenders.

“People have to be pretty motivated,” said Ray Rieckers, SNAP’s assistant director. “We’re pretty cautious.”

Still, home mortgages are complicated, and lenders initially didn’t understand how the program worked, Watson said. They didn’t understand how income was determined and weren’t convinced that Fannie Mae would buy the loans. Fannie Mae purchases 10 percent of all mortgages underwritten nationwide.

“It is more time-consuming” to do HomeChoice loans, Watson said. “You need someone who can specialize in it to do it.”

The first Spokane County HomeChoice loan was issued in February 1998 by Bob Boyer, a mortgage loan officer with Washington Trust Bank. The loan went to a disabled woman raising her two grandchildren, one of whom also was disabled. The second one went to three developmentally disabled men, who purchased a home together after living in group homes.

Spokane County now has 18 loan officers who have completed at least one HomeChoice loan, Watson said.

“It’s allowed a lot of people to actually get into a home,” said Boyer, who’s been a mortgage loan officer for 30 years. “It can be very gratifying to see somebody that’s excited and really wanting to have their own place. That’s one of the satisfying parts of the job.”

For Calhoon, the HomeChoice program has meant a permanent home with a garden, where he can grow peppers, watermelon and cantaloupe. His 6-year-old grandson also has a small plot of land where green beans are almost ripe and a pumpkin is growing for Halloween. It means a big shop where he can work on cars, his hobby.

“There’s a lot of people that need this type of program,” Calhoon said. “But they don’t know about it or know how to get it.”

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