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Chenoa Fund Housing
February 12, 2019

The American Housing Crisis

The US is experiencing a unique kind of a building boom that has led to a housing shortage and consequently an affordability crisis. Statistics released by the National Apartment Association (NAA) indicate that the US needs over 4.5 million new housing units by 2030 to satisfy demand. The situation has forced US cities and towns to focus their efforts on providing affordable housing. The assistance from the national government comes in the form of affordable loans, grants, waivers and policy support. It should be noted that public workers in big cities are often forced to live within the city limits, but home prices in these areas are rapidly growing out of reach.

In 2014, the federal government offered approximately $50 billion in housing assistance through preferential tax treatment and spending programs. Although the money went to support low-income households, the focus was on eligible applicants. Private entities that have taken responsibility for addressing the unmet housing needs of a segment of the population who have hitherto been ignored or priced out of the market can create a meaningful impact on the housing sector. These range from encouraging more private investments to strengthening cash flow. The investment by private developers mostly targets new developments and value-added investment.

Investments in new developments can go a long way to offset the growing gap between the demand for decent housing and supply. On the other hand, the whole strategy of value addition entails investing in dilapidated properties and making improvements on old multi-family homes. This pragmatic strategy is far less expensive compared to investment in new development. With steady investments, multi-family homes can also make a huge impact on the lives of middle- and low-income households. Real estate investors willing to put their hard-earned money on certain asset classes can also take advantage of the government offered tax incentives aimed at improving the housing market.

Investment opportunities drafted to connect low-income communities and private capital can easily be assessed through the Opportunity Zones program spearheaded by the Economic Innovation Group (EIG). The other government agencies partnering with real estate sector operators to implement flexible and affordable housing solutions include Fannie Mae and Freddie Mac. A growing number of housing experts and economists are advocating for more public and private company partnerships to solve the housing problem because of the widespread feeling that the ongoing government subsidies and tax credit programs are inadequate.

For individuals and families who already own homes but are struggling to retain ownership, every effort should be made to help them regain full ownership of their homes. Crowdfunding empowerment organizations such as the American Home Preservation Fund (AHPF) have come forth to assist investors willing to take on nonperforming mortgages at discounted rates. The mortgages brought by AHPF are mostly sought from banks and other mortgage funding institutions. Besides providing affordable housing, a successful private-nonprofit partnership can go a long way to ensure the lives of residents are uplifted while encouraging corporate philanthropy.

Companies like the Chenoa Fund may be able to help

Chenoa Fund provides loans to assist with making an appropriate down payment, targeting the affordable housing market across the US. The fund is operated by a government-run CBC Mortgage Agency (CBCMA). Chenoa Fund believes housing is the right of every individual and family. For this reason, the fund is committed to ensuring every creditworthy household has access to the right financial tools to buy a home. The unique institution offers down payment assistance solutions alongside FHA loans to those who qualify. However, all borrowers must meet the set credit score, income threshold, and the stipulated DTI guidelines.

The individuals and households who qualify may get access to grants as well as first and second mortgage totaling up to 3.5% of the minimal investment requirement. With this support, creditworthy families get to overcome persistent down payment worries while minimizing competition for shelter housing. This assistance is also critical in encouraging the development of healthy communities by reducing the gap between homeownership and the different forms of housing available in the market.

Under the program, the Chenoa Fund may help qualified families obtain access to the highly attractive DRPA Edge and Rate Advantage programs covered under the FHA insured loans. Families struggling with the inability to secure a path to home ownership are encouraged to take advantage of down payment assistance.

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