Richmond Times-Dispatch

Rent-to- ownprogram­offers bridge for area families

- BY MARK ROBINSON mrobinson@timesdispa­tch.com (804) 649-6734 Twitter: @__MarkRobins­on

All that stood between Michael Haggins and homeowners­hip was a mortgage pre-approval.

But after falling short of attaining it earlier this year, his dream seemed in jeopardy. Five points on his credit score separated him from buying a home where he could raise his two sons. To come so close and fall short stung.

“That was the one that knocked the wind out of my sails,” said Haggins, a 38-year-old who grew up in Richmond. “I said, ‘OK, maybe I need to let this go.’ I was even considerin­g moving to an apartment for a while.”

Prospectiv­e homebuyers in Richmond who make less than the region’s median income of $89,400 are hard-pressed to become homeowners in a city with rapidly rising real estate prices. Even if they can find a house they can afford, qualifying for financing or saving enough for a down payment and closing costs can stymie their plans.

A new pilot program the Maggie Walker Community Land Trust launched this year aims to help families like Haggins’ prepare financiall­y and buy a home. After resolving to move past his setback, he became the first to sign on to the program.

“There are families or households that would be awesome homeowners, they just need a longer runway to prepare for that,” said Laura Lafayette, chair of the land trust’s board. Formed in 2016, the nonprofit named for Maggie L. Walker, a pioneering Black businesswo­man and Richmonder, redevelops vacant and blighted properties and sells them to homebuyers for below market value.

The rent-to-own ar

rangement, called the Homeowners­hip Bridge program, targets families who have not yet qualified for a mortgage and earn between 50% and 60% of the region’s area median income. For a family of four, that’s between $44,700 and $53,640 annually. The range includes roughly 19,200 households in Richmond, Henrico County and Chesterfie­ld County, according to figures the land trust provided.

In September, Haggins moved into a newly built, three-bedroom home in Church Hill with his sons, ages 11 and 5. It was a special moment for Haggins, who is sole provider for his family.

“It’s not easy for any single parent to be afforded privileges like this,” Haggins said.

For 12 months, he will rent the house for just under $1,000 amonth. Under his agreement with the land trust, half of the sum will be deposited into escrow. Next fall, when he seeks to buy the home, he will have $6,000 to put toward a down payment or

closing costs.

In the meantime, the arrangemen­t gives him an affordable home to live in and routine check-ins with the land trust’s staff to make sure he is on track financiall­y.

His monthly rent is based on his projected mortgage at the sales prices he agreed to with the land trust: $165,000.

That sales price is wellbelow the $304,000 the city assessed the home at this year. Blocks from Chimborazo Park and near the neighborho­od’s highly touted restaurant­s, the house would likely command even higher offers than the assessment if put on the market in what is one of the fastest growing and rapidly gentrifyin­g neighborho­ods in the city.

While Haggins will purchase the home itself, the land trust will maintain ownership of the land on which the house is built. That reduces the price and ensures the home, if sold in the future, will always be priced lower than those in the surroundin­g area, Lafayette said.

It’s a model the land trust brought to the region in 2016, targeting buyers who make 80% percent of the region’s median income. With the pilot, it is testing amodel for even more deeply affordable home ownership.

The land trust received a $242,000 grant from the city’s Affordable Housing Trust Fund to launch the program this year. That supplement­ed private dollars raised to cover costs, Lafayette said.

Earlier this fall, Richmond Mayor Levar Stoney’s administra­tion proposed selling 32 cityowned properties to the land trust for the sake of expanding its affordable homeowners­hip efforts.

“The intent is to offer affordable homeowners­hip on those particular lots,” said Sharon Ebert, the city’s deputy chief administra­tive officer who oversees housing initiative­s.

The council must sign off on the transfers, but it could bolster efforts in neighborho­ods where new investment has fueled gentrifica­tion and displaceme­nt.

Since 2000, the number of Black homeowners in Church Hill and Jackson Ward have decreased by about 30%, according to the Partnershi­p for Housing Affordabil­ity’s regional housing framework. During the same period, the number of white homeowners increased by more than 150%.

That demographi­c shift has unfolded as Richmond home prices have surged faster than anywhere else in the region. They increased by 56% between 2009 and 2018, the analysis published earlier this year found.

The surge is fueling racial disparitie­s in homeowners­hip and wealth, the report found. In 2017, 26 homes were bought by white households per day on average. That same year, an average of six homes per day were purchased by Black buyers. For Latino buyers, the daily average was two.

Promoting homeowners­hip for buyers of color was a guiding principle of the pilot program, said Lafayette, who also is chief executive officer of the Richmond Associatio­n of Realtors.

“We know that we live in a community, historical­ly, where people of color have been marginaliz­ed and not had homeowners­hip opportunit­ies,” Lafayette said. “We really want to be intentiona­l about how Maggie Walker [Community Land Trust] does its work, and we want to make sure buyers of color have an opportunit­y to enroll in this program and become homeowners.”

If all goes according to plan, Haggins will have purchased his home outright by this time next year, joining 51 others who have bought a home through the land trust.

“At this point, I consider them extended family,” he said of the land trust’s staff. “I really couldn’t have done it without them.”

 ?? JOE MAHONEY/TIMES-DISPATCH ?? Michael Haggins and his sons, Micah, 11, (at right) and Jeremiah, 5, moved into their Church Hill home in September.
JOE MAHONEY/TIMES-DISPATCH Michael Haggins and his sons, Micah, 11, (at right) and Jeremiah, 5, moved into their Church Hill home in September.
 ?? JOE MAHONEY/TIMES-DISPATCH ?? “I really couldn’t have done it without them,” Haggins says of theMaggieW­alker Community Land Trust’s staff.
JOE MAHONEY/TIMES-DISPATCH “I really couldn’t have done it without them,” Haggins says of theMaggieW­alker Community Land Trust’s staff.

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