Adios Renting

Leave the renting life behind. Own your possible.

“I had doubts of ever owning a home. I thought I’d be a renter forever.”

For Josyah, the dream of owning a home felt out of reach. His credit history wasn’t where it needed to be. And he didn’t have a huge lump sum for a down payment. It felt like his future would be writing one rent check after another.

Fortunately for Josyah, he discovered the resources of Pennsylvania Housing Finance Agency (PHFA). PHFA helped him navigate the whole process, from building up his credit to securing financing for his home. Soon, he was able to say, “Adios, renting!”

Video courtesy of PHFA

Everyone’s journey to homeownership is unique. But black and brown individuals frequently encounter a broad range of barriers such as a higher chance of getting rejected for conventional home loans and even higher mortgage rates compared to white homebuyers.

We believe everyone deserves the chance to pursue homeownership if they want to. With many resources available to help renters like you, one day, you too will say, “Adios, renting!”

Home Buying Checklist

Are you emotionally and financially ready to buy a home?

The idea of becoming a homeowner is exciting. With your own home comes more freedom. You can paint your walls any color you like and renovate as you please. Homeownership has social benefits. Your house can become a gathering place for you to enjoy with friends and family. Owning a home also means that all the money you were putting into rent can now help you build up equity and financial stability. But homeownership doesn’t happen overnight. It can be a time-consuming and stressful process. Make sure you’re in the right mindset to take on the journey of homeownership.

Mentally prepare yourself

Financial things like homebuying are highly personal. So, buying your first home can come with all kinds of extreme emotions: excitement, nervousness, stress. It’s important to keep your feelings in check. You’ll need a clear mind and level head to set realistic expectations and make sound decisions.

Know your credit score

A credit score is a number that organizations, like the lender giving you a loan, use to determine how likely you are to make on-time payments over the life of your mortgage. Think your credit score is low? Don’t let that discourage you from pursuing your dream of owning a home. Different resources have different criteria.

Know what you can afford

Knowing how much you can afford to spend on a home is important. It will help you understand where you’re at financially and which homes you can buy without breaking the bank. An affordability calculator can help you get a broad sense of your money situation. But, remember, this tool is for reference only. If the results aren’t what you hoped for, keep in mind there are resources to help you build up your credit score or help you find good loan offers. Some may even cover your out-of-pocket costs like down payments.

Resources

Don’t go it alone. There are programs that can make your dream a reality.

If you’re like many renters, you don’t know about the variety of resources available that can provide the information and tools needed for you to understand and navigate the homebuying process, improve your credit score and even connect with homebuyer assistance programs. There may be an organization right in your backyard ready to help first-time buyers like you! We’ve listed some of those resources we think can benefit you in your quest to become a homeowner. Take advantage of everything you can!

Homebuyer counseling

Speaking with a homebuyer counselor is one of the best ways to get guidance on topics like budgeting for mortgages, repairing your credit, applying for special homebuyer programs, and finding a real estate agent. Homebuyer counselors are certified to give you one-on-one assistance that is focused on your unique financial situation. Many organizations offer this service for free and we highly recommend it.

First-time homebuyer workshops

First-time homebuyer workshops provide information on the entire homebuying process. Topics include financial readiness, the mortgage process, homeowner’s insurance, home inspections, loans and more. Even if you’re not ready to buy a home now, these workshops will give you knowledge and tools to plan for your future. The more you can educate yourself about homeownership, the more prepared you’ll be to buy your own place. 

Homebuyer loan programs

The cost of buying a home can be overwhelming, especially if you’re living paycheck to paycheck in a high-rent apartment. Fortunately, there are loan programs available that can help set you up with an affordable loan you can manage. 

Down payment assistance

Lenders often ask for a down payment as part of the homebuying process. This means paying a portion of your home’s final price upfront. The amount you need varies and some mortgage programs may not even require it. Coming up with the money when you have to pay your rent or put food on the table can be difficult or undoable. Fortunately, there are programs for first-time home buyers that can cover down payment costs.

About the Initiative

Empowering individuals. Improving lives. Reducing the racial homeownership gap.

Opportunities for homeownership across all races and ethnicities in Pennsylvania is uneven at best. According to the Urban Institute, the homeownership rate of PA’s black and brown families is below 50%, compared to white families which stands a little over 75%. The wide gap in homeownership is the result of the obstacles underrepresented families encounter that stand in the way of them owning a home. This makes it difficult for them to improve their current financial situation and ultimately create wealth so they can pass it on to the next generation. This systemic bias is unacceptable and needs to change. Everyone deserves the opportunity to pursue homeownership if they so choose!

That’s why Color & Culture, a multicultural and multichannel communications firm focused on leveling the playing field in all aspects of life, has developed the “Adios, Renting” homeownership initiative. Our team realizes the full gamut of inequities experienced by our marginalized neighbors here in PA that must be addressed — access to quality health care, opportunities for education and employment, and affordable housing. And we’ve put our hearts and souls into this project.

Part of our motivation is also that some members of the Color & Culture team have experienced the same frustration and hopelessness. They’ve known the feeling of a distant dream that seems out of reach and want to let many people know that their worlds can be filled with more opportunities when connected with the right resources and partners.

This initiative was created by Color & Culture, a multicultural marketing and advertising agency located in Harrisburg, PA. Color & Culture develops authentic campaigns and outreach experiences by celebrating the cultural differences that make audiences unique and developing conversations that resonate with them.

If you’d like to receive information about other work we do and our outreach into underserved communities, sign up for our newsletter.

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HOME BUYING CHECKLIST

Tips to Keep Emotions in Check

Take one step at a time.

Homebuying can be overwhelming. You may encounter obstacles getting in the way of your dreams. But stay positive. There are people who want you to succeed.

You’re probably also anxious to get out of your rental. But be patient. Find a good homeowner counselor through one of the resources listed on this site. They can help you prioritize your tasks, like what paperwork you’ll need to start gathering. And what factors to consider when making decisions.

Define your “must haves” and “want to haves.”

A helpful exercise to prevent making an emotional buying decision you’ll regret in the long run is to make a list of things you must have and those that would be nice to have. What items are you willing to let go of? What must you absolutely have to be happy?

Get prequalified for a mortgage before you start looking.

Knowing your limits will help you control your emotional response to those you like but are out of your price range. Unlike a preapproved mortgage that requires financial documents and a credit check, a mortgage prequalification just needs your basic financial information to get an idea of how much home you can afford.

Find a sounding board.

Talking to someone outside of your circle that can hear you out and offer a neutral perspective can be helpful. Their different vantage point could point out a better way to go. This third party can be a homebuying counselor, a real estate agent or a neighbor who just bought their own home.

Know Your Credit Score

What’s an Ideal Credit Score?

While it is true that some lenders may prefer a credit score of at least 620 for a conventional mortgage, the reality is that most lenders also look beyond your credit score to decide whether or not they’ll give you a loan. Your “mortgage worthiness” usually depends on more factors than just your credit score, including the type of mortgage program you’re applying for. The goal should be to have a credit score that helps you get the most affordable loan.

Don’t let a low credit score keep you from pursuing homeownership. There are homebuyer programs that may be able to connect you with loans that will work with your credit score or connect you with resources that will help you improve it.

11 Credit Myths

Here’s a list of common misconceptions about credit, credit scores, and credit reports from Experian.

Not all debts are equal. Say you’ve got a $150,000 debt on your credit report. If it’s there because you maxed out your credit cards to throw a birthday blowout for yourself two years ago, then you’re in trouble. Today, that debt is giving you nothing but memories (and maybe an ulcer). But if that $150,000 is your mortgage, then you’re probably just like millions of other responsible homeowners. That debt is giving you a warm place to lay your head at night.

A notation called an “inquiry” goes on your credit report every time someone (including you) looks at your file, and rumor has it that inquiries can hurt your score. Well, yes and no. An inquiry affects your score only if it’s related to a credit application that you have submitted. If you apply for a loan or a credit card, your score might fall, because that application suggests you’ll be adding debt. But if you simply look at your own credit report, the resulting inquiry won’t affect your score. If anything, checking your report is a sign of responsible credit management, though you don’t get points for doing it.

If you have a credit card you don’t use, you’re unlikely to improve your score by closing the account. In fact, closing the card might even lower your score. In general, credit scoring models don’t measure risk by how much credit you have available, but rather by how much of that credit you’re using — a ratio known as “credit utilization.” When you close an unused account, you reduce your total available credit, so your credit utilization goes up. (Of course, if an unused card creates an unbearable temptation to spend, you may be better served in the long run by closing the account.)

There isn’t just one single credit scoring formula that applies to all consumers in all situations. There are more than a thousand scoring models in use in the credit marketplace. A consumer could therefore have dozens or even hundreds of different credit scores. Lenders and others check your credit score for different reasons and each formula looks at your credit history in a different way, giving different weight to various factors.

Credit bureaus collect information about your debts and use that information to assign you a credit score. Those scores are neither objectively “good” nor “bad.” They’re a measure of risk. It’s up to lenders to decide whether a given score meets their criteria for extending credit. And, scores are usually just one factor in their decision. A “good” score might not mean much if you don’t have a job or any assets. Likewise, a high income and a stack of gold bars might outweigh a “bad” score.

Your job title and income have no direct effect on your credit score. Scores are based only on the information found in your credit report. Your report includes a lot of information about your use of credit and your management of debt. But, it doesn’t include your income. In fact, it may not even indicate whether you have a job (nor will it tell you to get off the couch and get one). That said, your employment situation can affect your score indirectly in terms of your ability to pay your debts. And when you apply for credit, lenders will probably ask about your income.

 

Just as credit reports don’t list your income, they also don’t provide much demographic information. Credit reports contain no information about such things as race, national origin, religion, profession, disabilities, sexual orientation or military veteran status. They also don’t say how much you have in the bank or in retirement accounts. And if it’s not on your credit report, it can’t affect your credit score.

There’s no such thing as a joint credit report — for married couples or anyone else. Married or single, you have your own credit report, one that’s linked to your Social Security number. If you’re married, you and your spouse may have a lot of joint accounts, such as mortgages, car loans and shared credit card accounts. Those joint items will appear on both your credit reports and will affect both of your scores. But your credit report is yours and yours alone.

Pay off a debt and you’ve eliminated your obligation — but the evidence of that debt can stick to your credit report for years. If you pay your debts on time and in full, you will likely want your paid-off accounts on your credit report because they show that you’ve used credit responsibly. If, on the other hand, you’ve been chronically late, missed payments or defaulted entirely, that’s a problem. Most negative information can remain on your report for up to seven years and some bankruptcies can stay there for up to 10 years.

There’s nothing that a “credit repair” company can do for you that you can’t do yourself. No one can remove accurate information from your credit report. Reputable credit reestablishing services can help you come up with a plan to repay your debts but the only legitimate way to enhance your credit score is to practice good credit management.

Credit scores are designed to evaluate how big of a risk it would be to lend you money. That’s it. If your score is low, it’s because your credit history suggests that there’s a higher risk that you’ll default on a debt. It doesn’t mean anyone thinks you’re a bad person. Good, honest people can have low scores (and yes, truly awful people can have high scores). What you can do is work to generate a positive credit record: pay bills on time, reduce balances and apply for credit only when you need it.

Know what you can afford

Down Payment Myths

Saving money for a down payment (and closing costs) is a huge obstacle for many renters. Getting approved for a mortgage doesn’t mean anything if you don’t have the cash to pay for these out-of-pocket costs, right? And the myths floating out there about down payments only add to the hopelessness you’re feeling—how in the world can you pay 20% of your mortgage upfront?

Don’t give up your dream of owning a home just yet. Let’s bust the myths and get clarity on what you really need to cover the out-of-pocket costs of buying your house.

Myth: You need to put down 20% to get a mortgage.

This is one of the most damaging myths about homebuying.  Unless it is specified by the lender, it’s typically not required to put down 20%. In fact, according to the National Association of Realtors, the median down payment today is only 13%. It’s even lower for first-time homebuyers: 7%.

Now, you may be saying to yourself, “7% is still a lot so I’m never going to own a home.” Take a look at the next myth.

Myth: If you don’t have money for a down payment, you’re out of luck.

Perhaps even more damaging than the first myth is the belief that you will be stuck renting because you’re in a situation that does not let you save enough money to pay the down payment and closing costs of a mortgage. 

But did you know there are programs for qualified buyers that could decrease your down payments to as low as 3.5%? There are also assistance programs that can even cover ALL the upfront costs required by the lender. We share some of these programs on this website. Bottom line: You have options and buying your own place is closer to reality than you realize!

Homebuyer Counseling

Homebuyer Counselors Near You

PHFA

The Pennsylvania Housing Finance Agency (PHFA) offers homebuyers the opportunity to get homebuyer counseling and education through its approved counseling agencies, as well as an online program. Housing counselors provide guidance and advice to help families and individuals improve their housing conditions and meet the responsibility of homeownership.

Find a PHFA-approved homeownership counselor
On their web page, scroll to the dropdown option to get a list of counselors by county.

NeighborWorks America

NeighborWorks America’s goal is to ensure successful, sustainable homeownership for people of all income levels and backgrounds. They have a network of homeownership centers throughout the country with housing counselors ready to assist you.

Search network directory for a counselor

First-Time Homebuyer Workshops

Education Courses and Workshops

PHFA’s Online Homebuyer Education Course

The Pennsylvania Housing Finance Agency (PHFA) designed this course to give you valuable information you need to make informed decisions about buying a home. The course meets PHFA’s homeownership standards and coordinates with their participating lenders’ home purchase process.

Start online homebuyer education course

Fair Housing Council’s Homebuyer Education Workshop

The Fair Housing Council’s First-Time Homebuyer Education Workshop has helped more than 14,000 individuals and families realize their dream of homeownership.

See workshop schedule and register

AHCOPA’s Homebuyer Workshop

The Affordable Housing Centers of Pennsylvania (AHCOPA) provides free housing counseling and education for the greater Philadelphia area. Their interactive workshops will educate you on the options, benefits and best practices of homeownership. Speakers include a lending officer, realtor, home inspector and home insurance representative.

See workshop schedule and register

NeighborWorks Western Pennsylvania’s Homebuyer Education Workshop

If you live in the Pittsburgh area, join NeighborWorks Western Pennsylvania’s full-day, in-person workshop, which covers everything you need to know about purchasing a home, from credit to closing. The free workshop features presentations from a homeownership counselor, loan officer, real estate agent, home inspector and insurance representative.

See workshop schedule and register

Homebuyer Loan Programs

Loan Programs

Home Purchase Loans from PHFA

The Pennsylvania Housing Finance Agency (PHFA) offers home purchase loans with competitive interest rates and lower fees. The program that is best for you will depend on your specific circumstances, such as your credit history and amount of cash savings, as well as your individual preferences.

Learn more about PHFA’s Home Purchase Loans

HUD’s Good Neighbor Next Door

Good Neighbor Next Door is a community revitalization program, sponsored by the U.S. Department of Housing and Urban Development (HUD). Available to law enforcement officers, pre-Kindergarten through 12th-grade teachers, firefighters and emergency medical technicians, HUD offers a discount of 50% from the list price of the home when you commit to living in the property for at least 36 months as your only residence.

Learn more about the Good Neighbor Next Door program

There may be other programs available depending on your unique needs. A homebuyer counselor will be able to connect you to these kinds of resources.

Down Payment Assistance

Assistance

Assistance Loans from PHFA

The Pennsylvania Housing Finance Agency (PHFA) has various assistance programs that can cover down payments and closing costs. The program that is best for you will depend on your specific circumstances, such as your credit history and amount of cash savings, as well as your individual preferences.

Learn more about PHFA’s assistance loan programs

County-Based Assistance Programs

You may be living in a county that offers its residents assistance programs and grants to pay for the out-of-pocket costs of buying a home.

Beaver County First-Time Buyer Program

Chester County First-Time Homebuyer Program

Cumberland County Affordable Housing Trust Fund First-Time Homebuyer’s Program

Delaware County Homeownership First Program

This is not a full list of the programs that are available to you. A homebuyer counselor will be able to connect you with resources like these to meet your unique circumstances.

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