Partners (Spring 1997)
Partners (Spring 1997)
Catholic Housing Services and
Parish Government Form
Many communities feature fine development programs. However, Houma, Louisiana is worthy of special recognition because the community effectively combined several good programs to address its affordable housing needs. Houma (pronounced HO ma), has developed a loan consortium that utilizes innovative underwriting criteria, a bank-sponsored community development corporation, a religious-based nonprofit housing development organization, a Federal Home Loan Bank grant program, and community development block grants to address its housing needs. And it all began with a hurricane.
Hurricane Andrew blew through Houma in August of 1992, leaving serious losses behind. When residents started to rebuild, they had to comply with stronger building codes, which drove up the cost of housing. Recognizing the community's needs and accompanying problems, several organizations began working together to develop solutions.
Catholic Housing Services of the Diocese of Houma-Thibodaux, a nonprofit 501(c)(3) organization, was formed with a $1 million grant provided by Catholic Charities USA. Some of the money is used for emergency repairs, but most is used to provide home ownership opportunities for low- and moderate-income persons. Catholic Housing Services (CHS) is building three bedroom, two bath "5-Star Energy Efficient" homes using 20 percent recycled materials, in the downtown area. In fact, even with central heating and air conditioning, the state energy department projects approximate annual heating expenses of only $67, annual cooling expenses of only $145, and annual water heating expenses of only $132.
"The church wants to provide decent, safe and affordable houses because they are a foundation for a more stable family, and ultimately, a more stable community," said Paul James, CHS executive director. "In 25 years, there has been no new residential construction in that [downtown] area, but by concentrating on that area we hope to raise the neighborhood wealth."
The grant money was made available for down payment assistance and closing costs, or to "buy down" the interest rate, as needed to qualify families whose annual income is less than 80 percent of the area median income. (Eighty percent of the median income is currently $25,600 for a family of four.) For an example of the loan financing terms, see the "Houma Loans" article.
To help offset higher building costs following the hurricane and to qualify low- and moderate-income home buyers, the Terrebonne Parish consolidated government has provided $120 thousand in additional grant money through the federal HOME program. The Federal Home Loan Bank of Dallas has provided a $74,000 grant through its Affordable Housing Program to reduce the selling price of the homes built by CHS. First National Bank of Houma submitted the Federal Home Loan Bank grant request on behalf of CHS.
According to Sharon Roppolo, First National Bank executive vice president, "The parish government has been a significant partner in planning the development." The cooperative effort has paid enormous dividends. "Private developers are showing an interest in the area now," said Roppolo, "and it has stimulated other homeowners to renovate their own houses. That's exactly what you want to happen."
Several local financial institutions also formed the Houma Terrebonne Community Development Corporation to address similar needs. Starting with a $100,000 loan pool, the multi-bank CDC will acquire vacant lots or homes in need of significant rehabilitation. Working through the CDC, new homes will be constructed or old homes repaired and sold to low- and moderate-income families. The CDC will have the flexibility to do whatever is necessary to address the local housing needs, including subcontracting with Catholic Housing Services to construct the homes. The CDC hopes to build or renovate about twenty homes this year.
Members of the CDC include First National Bank of Houma, Hibernia Bank, St. Mary Bank and Trust Company, South Louisiana Bank, Banc One, and Regions Bank. In addition to their initial contributions, the CDC members have all provided innovative affordable housing financing programs.
According to Sharon Roppolo, "Our expectations are that these loans will perform as well as our conventional loans. The home buyer education program provides the financial tools and techniques to help people manage their money. People realize this is an opportunity they won't want to forfeit."
For more information contact Paul James, CHS Executive Director, at 504/876-0490.
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