A new approach to a housing program

Much anger and blame is being thrown around at wealthy Wall Street CEOs who drove companies into the ground by what Tim Dwyer of the "New York Times" calls "a system of agreed-upon hallucinations."

But there is also anger at home buyers who got in over their heads, in particular, through low-income housing programs. But there are housing assistance programs, however, that do better screening than some banks or mortgage companies.

One is named after the Biblical prophet Nehemiah, who rebuilt the walls of Jerusalem. In partnership with other grassroots groups, churches, and governments, Nehmiah has built almost 6,000 homes in Brooklyn, the Bronx, Washington, D.C., and Baltimore. For instance, a resident of Baltimore making $30,000 who qualifies for the program can buy a new or renevated two-bedroom, two-bath row house with a dishwasher and full basement.

The Nehemiah program has a near-unheard-of zero foreclosure rate.

Arnie Graf, national staff member for the Industrial Areas Foundation, helps run the program in Washington and Baltimore. He spoke about how this system works:

"First, the Industrial Areas Foundation assists in building an organization in (Baltimore). And that is an organization made up of 40 churches. The 40 congregations get together and work on various issues. The issues in Brooklyn and here were blight and the rebuilding of blighted communities."

"The congregations raised, in Baltimore, a $2.5 million no-interest construction loan fund. So, when you go to build, there is no cost for borrowing money for the construction phase.

"The loans we negotiated with the State of Maryland, and for Brooklyn, in New York, to provide below-market financing for the first mortgage.

"People have to make down payments. When they go to the bank, they have to go through the very conventional way anyone would normally go through. So, we often have to work with people.

"It’s interesting becuase when people thing of working people owning a home, people think, "Oh, those are those liberals. Actually, we are the conservatives. And the conservatives, are the ones who are trying to push all kinds of loans on people, people that couldn’t afford them.

"The reason we don’t have foreclosures at this point, is because people got into a mortgage which they knew they could afford."

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