Isles’ fosters self-reliance by offering leading-edge educational and financial products and services that support low and moderate income families to obtain assets that will lead to long-term financial stability.
Although welfare, food stamps, and housing assistance certainly help low-income families to prop up their incomes during short-term crises, this type of assistance tends to discourage or prevent families from accumulating financial assets. Isles helps families build or maintain long-term personal and financial assets – through first time home ownership, home preservation, accelerated savings for home ownership and financial capability.
Based on our research, the purchase of a home for low-income families is often not a positive financial proposition. Often homes that they can afford require substantial repairs and have older heating systems that are more costly to operate need replacement. Over 50% of minority low-income homeowners still live in neighborhoods with poverty rates exceeding 20%. Unfortunately, persistently low-income individuals also struggled to maintain ownership of their homes with only 64% remaining homeowners after two years and 47% after five years (although this effect is reduced by the education level of the homeowner). The percentage of household income dedicated to housing seems to make it more difficult for low-income homeowners whose employment may be more fragile and are less likely to experience wage progression.
Furthermore, low-income households experience less appreciation in the value of their homes than did higher income individuals. Even when duration of homeownership is taken into account, the value of homes owned by low-income individuals increased by only 30% over ten years—a lower rate of return than that produced by Treasury Bills. Low-income owner are as likely to gain as they are to lose with the majority experiencing no change in their investment.
However, under certain conditions, we believe that homeownership for lower income families does make sense. For example, homes that have been fully rehabbed under certain State or federal programs, like HUD’s Neighborhood Stabilization Program and that are purposely set at an “affordable” rate for homeowners, improves the quality of the investment and has a much lower operating cost than market rate homes.
In addition, pre-purchase counseling is essential in helping homeowners understand all of the costs involved in homeownership and in choosing a home that fits their budget. Studies have shown a much lower rate of foreclosure with homeowners that received high quality pre-purchase counseling from a HUD approved agency. The homes Isles list for sale on our website are all homes that meet the standard for affordability and have the requirement of pre-purchase counseling prior to sale.
Since 2003, Isles has provided housing counseling and home purchase workshops to more than 1500 prospective home buyers. After receiving pre-purchase housing counseling, 94 families have purchased housing.
Isles offers home ownership products and services to assist our community to:
Avoid Foreclosure: HUD certified counselors provide assistance and access to resources to help families save their homes from foreclosure
Purchase a Home: Homebuyer services for 1st time home owners.
Save for Home Ownership: Supercharged Savings accounts that match participant savings $2 for every $1 they save to purchase a first home.