This story is part of Southwest Michigan Second Wave's series on solutions to affordable housing and housing the unhoused. It is made possible by a coalition of funders including the City of Kalamazoo, Kalamazoo County, the ENNA Foundation, and LISC.


Solid houses under $200,000 in Kalamazoo’s “affordable” neighborhoods sell quickly.
 
So advocates of homeownership are working to help people on the path to homeownership complete the journey by providing them with what may be the final funding they need to close out a home purchase.
 
Last year Beth McCann’s organization, Kalamazoo Neighborhood Housing Services (KNHS), worked with first-time home buyers of limited means who were ready to buy but found themselves in stiff competition with others.
 
Kalamazoo Neighborhood Housing Services uses downpayment assistance to help people get to where they need to cover things like closing costs, says Acting Executive Director Beth McCann says.“To give you an example, in 2022 when the real estate market was so crazy, we would have somebody who would have an affordability (approval from a lender) for, say, $140,000,” says the acting executive director of KNHS. “They’d find a house. They would put their money in. But then there would start a bidding war.”
 
That’s not a good position for people of limited means. So Kalamazoo County’s Downpayment Assistance Program came into play to help several potential new homeowners with closing costs. It provided them with enough funding to potentially get the home for which they bid. As the affordable housing crisis continues, some Kalamazoo organizations are finding new ways to provide downpayment assistance to help first-time home buyers purchase a new home.
 
“So sometimes downpayment assistance allowed them to actually go up to $145,000 and get the house,” says McCann.
 
Income-qualified participants have received anywhere from $2,000 to $15,000 to help with the closing costs and other related expenses, with most receiving grants of $5,000 to $7,500, she says. The amount is based on a buyer’s income level. A person who earns 30 percent of the Area Median Income could expect to receive more help than one at, say, 60 percent of AMI.
 
Through 2022, the Area Median Income for Kalamazoo County for an individual was about $55,300. It was about $79,000 for a family of four. Thirty percent of the AMI for an individual equates to about $16,590 in annual earnings and about $23,700 in annual earnings for a family of four. Sixty percent of AMI for an individual equates to about $33,180, and about $47,400 for a family of four.
 
“I would say it’s one of our most important programs, especially with the market the way it is now,” McCann explains.
 
More downpayment assistance is on the way. The Edison Neighborhood is working to fund a Downpayment Assistance Program for homebuyers in that neighborhood.
 
“We had a donation (of $2,500), so we set that money aside toward it, and we are launching an association membership and part of the dues from that will go into that pot for the downpayment assistance,” says Stephen Dupuis, executive director of the Edison Neighborhood Association.
 
As the Edison Neighborhood Association looks to start its own Downpayment Assistance Program, EDA Executive Director Stephen Dupuie says it hopes to eventually help three to five homebuyers a year.ENA will work with KNHS, Habitat for Humanity, and other organizations to vet candidates who want to buy a home in the neighborhood and thereby increase the stability of the area. Edison is just south of downtown Kalamazoo along Portage Street. With more than 8,400 residents, it is considered Kalamazoo’s largest neighborhood in terms of population. It is bordered on the south by Miller Road, on the west by Burdick Street, and on the east by the Kalamazoo River. On the north, it includes a few blocks of Michigan Avenue.
 
“This year our goal is to get as much in it as we can,” Dupuis says. “But we’re looking probably only to do one household this year and we’d like to do two next year. And eventually grow it up so we can do three to five a year.”
 
Dupuis says he hopes to give any homeowner up to $2,500 to someone who earns 60 percent of AMI or less and has already gone through financial or credit-repair courses through organizations like KNHS.
 
Since 1981, KNHS has striven to help people “live in affordable homes, improve their lives, and strengthen their communities.” The organization works to help homeowners improve their properties and improve their financial situations, and it helps renters progress toward homeownership. The nonprofit organization also offers specialized loan products and provides financial education services, specialized loan products, and foreclosure counseling services.
 
KNHS is a member of Networks America, a national network of community-based organizations that share the same mission.
 
“We use downpayment assistance to help them get to where they need to be affordability-wise and also cover things like closing costs,” McCann says.
 
Nine prospective homeowners are shown participating on a Jan. 19, 2023, session of Kalamazoo Neighborhood Housing Services' Home Buyer Education Program.The KNHS program expects to receive more than $100,000 in funding from the City of Kalamazoo this year and was approved in December for $200,000 in funding from Kalamazoo County. McCann hopes to stretch those dollars to help 20 to 30 prospective homeowners this year.
 
To qualify for the program, all prospective home purchasers must complete Kalamazoo Neighborhood Housing Services’ Home Buyer Education Program. Offered each month at the organization’s 1219 S. Park St. offices, it is a comprehensive, eight-hour educational program that helps get people ready for home ownership.
 
“It’s two nights, four hours each night and they work with a HUD-certified coach after the education to go over things like their credit report, their budget, basically their whole financial situation,” McCann says. “They make a plan together, the coach and the buyer – because we’re coaches, not counselors. … They meet with their coach. They set up a plan and they start to work the plan.”
 
HUD-certified homeownership coaches such as Ellis Miller, help decode language associated with mortgage lending and finances during KNHS Home Buyer Education Program.The program will take anyone interested, including young prospective buyers and individuals referred by lenders. “No one is ever turned away from our program, “ McCann says. “But the focus of our program, usually the vast majority of the people in it, are 80 percent and under AMI.”
 
Coaches meet with them every two weeks or a month depending on what they are trying to accomplish, or how often the participant wants to meet.
 
The mortgage-readiness process may take six months, a year, or even two years, McCann says. “But when they reach that point, those who meet low- to moderate-income levels may qualify for the down payment assistance," she says.
 
“Home ownership is a big deal,” Dupuis says. “I know there are a lot of barriers to getting into a home sometimes.”

But he says, even factoring in maintenance costs and other things, owning a home is usually cheaper than renting a home.
 
“The big thing for me is that it helps stabilize a neighborhood,” Dupuis says. “So as a neighborhood director, that was a no-brainer. The more homeowners I can have in the neighborhood, the more stable the neighborhood is, and the more I have that sense of community. That’s what makes perfect sense to me and that’s why we should be doing it.”