Emily Akhtarzandi, managing director of AtlanticLIVE:

Thank you everyone, and next, a session produced by our underwriter. Please welcome to the stage Stephanie Preusch, executive director at the Neighborhood Finance Corporation of Des Moines, here with Martin Sundquist, senior vice president and executive director of the Wells Fargo Housing Foundation at Wells Fargo. Thank you.

Martin Sundquist:

Well good morning. Excited to be here with Stephanie Preusch of the Neighborhood Finance Corporation here in Des Moines and talk about an important topic, which is a collaboration around public and private work. So, welcome Stephanie.

Stephanie Preusch:

Yes. Thanks for having us.

Sundquist:

So I have responsibilities for housing, philanthropy, and neighborhood impact programs. And about six years ago, we started to work with an organization called NeighborWorks America. NFC is an affiliate of NeighborWorks, right?

Preusch:

Correct. Yes.

Sundquist:

And we’ve launched a program called NeighborhoodLIFT®, and six years later, more than 60 markets that we’ve been to, and less than a week — I guess it’s a week — a week from tomorrow, we’re going to launch a program right here.

Preusch:

Yes. Exactly. We’re very excited.

Sundquist:

You’re very excited. So why is down payment assistance in the area of Des Moines important?

Preusch:

Well, so Neighborhood Finance Corporation is a lender, and our mission is neighborhood revitalization. We do purchase and home improvement renovation lending. We’ve been doing that for 30 years, and down payment assistance is so important to overcome those barriers to home ownership. It allows people the funds to be able to purchase a home. It also overcomes affordability because many of our borrowers would have either — we have a second mortgage we do so people don’t have mortgage insurance, and that’s a large, fixed cost monthly — and if they can get like with LIFT and get that $15,000 down payment, they often can eliminate that, so it just creates affordability and helps them be more economically viable with an affordable loan and some equity on their property.

Sundquist:

That’s great to hear. Thank you. Well let’s tell the audience a little about the program. So I mentioned we started it six years ago, and we believed at the time that, coming out of the housing crisis, that having a program that could help light a spark in a community in and around the possibilities of homeownership and helping low- to moderate-income consumers pursue the dream of homeownership. And so about $400 million in the program so far, more than 60 markets that we’ve been to. Most of the grant sizes are $15,000, and these are forgivable where they go to helping with a down payment of purchasing a home, but it also makes it more affordable along the way. We’ve helped more than 18,000 homeowners be created across the country so far, and we know next week is going to be incredibly important in this community here. One of the requirements to earn the down payment assistance, and by the way, it’s forgivable, so over a period of time, you earn the full value of that down payment assistance. One of the requirements is to have eight hours of HUD-certified education, so why is education, why is HUD’s certified education counseling, important to a program like this?

Preusch:

NeighborWorks has done studies that have shown one, that though sometimes people think of it as like a hoop they need to jump through, once people take it, they always, in the 90 percents, appreciate the knowledge they learn and feel that it made them better prepared for homeownership. So we know that. Also, we know it’s a compensating factor. So, if people have less money into the transaction or a lower credit score, this can really compensate for it, and it shows that these loans do perform better when folks have the homebuyer education because they have that knowledge. So we feel like it’s an important piece.

Sundquist:

The biggest part of the program is the down payment assistance, these $15,000 grants that go to individuals and families. Another piece of the program is our local initiatives, and there will be about $300,000 that will be invested into the community here around neighborhood revitalization efforts, and I know you’ve done a lot of work around neighborhood revitalization. Why is that important to a community?

Preusch:

Just for perspective, for those that aren’t from Des Moines, we do about, our borrowers do about $8 million worth of renovations in some of the central neighborhoods of Des Moines, West Des Moines, and we just started lending in Windsor Heights and Cedar Rapids as well. And we really feel like it’s important for people to be able to purchase a home and then take care of those deferred maintenance options because a lot of our borrowers are using all of their resources just to get into the home. So, to make sure that they have that new furnace, that they have the new roof. Also, it helps those older homes that haven’t been updated. Our loans are not for people that are just low income. The majority of our borrowers are low and moderate income. But people that have the ability to come in, and they can do that bathroom remodel, the kitchen remodel, add a bedroom and make homes in older neighborhoods really vibrant.

Sundquist:

That’s great. Well I know you have a big week coming up because later today you’re doing something. You have a ribbon cutting.

Preusch:

Right. We’re opening our office in Cedar Rapids, so we’re very excited about that.

Sundquist:

That’s great. And we’ve seen with bringing NeighborhoodLIFT into many markets, we’ve seen a ripple effect occur. We know we can’t do everything to change the market or improve affordable housing issues that may exist within a market, but if it can be a drop in the bucket and help a ripple effect, that’s great. What are you most excited about for next Friday?

Preusch:

For next Friday. You know, a couple of our staff have participated in other LIFT events, and just the energy of helping people fulfill that dream of homeownership. You know there’s so many people out there that have that dream and don’t know how to get there. And so the combination of being able to provide the education. And we would really even like to grow that more in Des Moines so that people in a year or two want to be a homeowner and really need help figuring out how to save that money and improve their credit but should be part of an event where people are getting that certificate that reserves their $15,000 down payment as well as if they haven’t come to pre-qualify, they can get pre-qualified. Or if not, then we connect them with our housing counseling partners, HOME, Inc. and Habitat for Humanity, will be providing financial literacy so that we can get them for where they need to be to become homeowners. So we’re excited about that energy.

Sundquist:

Great. I think about the fact that not everyone has the opportunity to become a homeowner, and we’ve seen this program really help many that are pursuing the dream of homeownership, and maybe have been pursuing it for a number of years, become and realize that dream. And I know it’s going to be a huge success here in Des Moines, and we’re going to have people ready for the program to launch on Friday morning. It’s right over here in the Hy-Vee Hall on the 28th of September and also on the 29th. Any additional thoughts that you want to share with today?

Preusch:

Well I just hope that, I hear all the discussions about neighborhoods and economy, and just housing is such an important piece of that. And really making sure that our neighborhoods stay strong as the city grows. We’ve seen such growth in downtown, and I know the city of Des Moines is really working hard to have that go out towards the neighborhoods that surround downtown, and we’re proud to be a part of that partnership. It really is going to take local governments. Our organization has always been local government, the financial institutions, and businesses in town as well as the work that we do as a nonprofit in the neighborhoods that we serve. So I think LIFT is an example of that, and I think that’s the only way we’re going to really get our neighborhoods to revitalize long term.

Sundquist:

Well I can tell you, we embarked on this journey as I mentioned, six years ago, and at the Wells Fargo Foundation, we’ve had a mission to help close the wealth gap and help people pursue economic empowerment, and we believe the NeighborhoodLIFT program can help do that. It’s going to be an exciting time here in Des Moines. It’s going to be an exciting time for two days, and I think we’re going to see many homeowners created as a result. I just thank the time with you today, Stephanie, and thank you in advance. We could not do this program if it weren’t for the great organizations like NFC and like NeighborWorks America. It’s truly a model that we’ve looked at that has really emphasized the importance of these public and private partnerships, and we’ve learned a lot as a result too. We learned that housing counseling can be an important element to our business model, and we’ve actually incorporated that into other things we do, for instance our yourFirst Mortgage℠ product, which has helped more than 50,000 people become homeowners in the last two years. So thank you so much for what you’ve done today, thank you for what you will be doing, and I really look forward to being with you again in a week. Thank you.

Preusch:

Yeah. Thank you.

Homeownership

Helping Iowans become homeowners

Leaders from Wells Fargo and an Iowa lending organization share why Wells Fargo’s recent $4.7 million commitment to Des Moines is so important.

October 3, 2018

Jessica Pacek

For low- and moderate-income prospective homebuyers, down payment assistance is extremely important, said Stephanie Preusch, executive director of Neighborhood Finance Corporation, a Des Moines, Iowa-based lender that works to revitalize neighborhoods.

“It allows people the funds to be able to purchase a home. … It just creates affordability and helps them be more economically viable with an affordable loan and some equity on their property,” Preusch said.

The organization is collaborating with Wells Fargo to launch the NeighborhoodLIFT^® program in Des Moines, helping up to 250 eligible homebuyers purchase and reside locally in an eligible home, thanks to a $4.7 million commitment from Wells Fargo. Preusch and Martin Sundquist, head of the Wells Fargo Housing Foundation, spoke about the commitment at The Atlantic Heartland Summit, which focused on the question, “How is the Heartland faring in 2018?”

At the summit, which was sponsored by Wells Fargo, Preusch and Sundquist discussed the importance of homebuyer education, neighborhood revitalization, and Wells Fargo’s new commitment in Des Moines. The LIFT program provides $15,000 in down payment assistance grants for eligible low- and moderate-income homebuyers; $17,500 in down payment assistance grants for military service members, veterans, teachers, law enforcement officials, firefighters, and emergency medical technicians; and homebuyer education.

Since the program launched six years ago, Wells Fargo has committed $404 million nationwide to bring it to more than 60 communities. As a result, the program has created more than 18,375 homebuyers and provided more than 52,500 people with homebuyer education.

“With bringing NeighborhoodLIFT into many markets, we’ve seen a ripple effect occur,” Sundquist said. “We know we can’t do everything to change the market or improve affordable housing issues that may exist within a market, but if it can be a drop in the bucket and help a ripple effect, that’s great.”

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