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Investments in Affordable Housing

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Winter 2023   


Investments in Affordable Housing


      • Through targeted initiatives to close the wealth gap, the Atlanta Neighborhood Development Partnership, Inc., uses capital from various sources to acquire and rehabilitate vacant housing and connects families to downpayment assistance.
      • The Housing Partnership, Inc., offers residents of Louisville's West End a lease-to-purchase program, which holds a mutually agreed-upon sales price of leased homes to purchase until families have completed homebuyer education courses and are financially stable.
      • Acts Housing's homebuyer coaches prepare families for homeownership, and its acquisition fund will help maintain a pool of affordable houses in Milwaukee for low- to moderate-income families to purchase when they are ready.

With their access to capital, for-profit investors can purchase and renovate distressed housing and return units to the market at higher resale prices and rents, which prices out low- to moderate-income (LMI) residents.1 Several local nonprofits, however, are counteracting these practices and preserving affordable housing opportunities in their communities. The Atlanta Neighborhood Development Partnership, Inc. (ANDP) is taking measures to reduce the wealth gap between Black and White households, especially in neighborhoods hit hard by the 2008 foreclosure crisis. Through its loan fund and targeted initiatives to expand homeownership, ANDP acquires, renovates, and preserves affordable single-family and multifamily units and provides downpayment assistance to qualifying homebuyers. To preserve homeownership opportunities for LMI residents in Louisville, Kentucky, the Housing Partnership Inc. (HPI) maintains a pool of rehabilitated housing and prepares residents for homeownership through a lease-to-purchase program. In Milwaukee, Wisconsin, nonprofit Acts Housing launched the Acts Homeowner Acquisition Fund to purchase and preserve affordable single-family homes for LMI families. These nonprofits also have received HUD funding and program support for acquisition and homebuyer education, which are critical to expanding homeownership opportunities for LMI households and stabilizing neighborhoods.

Investing in Affordable Housing in Atlanta

Neighborhoods in the Atlanta metropolitan area were hit hard by the 2008 foreclosure crisis, which resulted in thousands of abandoned properties. As the values of these foreclosed homes dropped, many loan servicers quickly sold the properties to investors, who often left the homes vacant for years or sold them to other investors as rentals.2 During the fourth quarter of 2021, investors bought 41 percent of all homes sold in the city of Atlanta — the highest share in the nation.3 This increase in investor activity has made it more difficult for LMI households, many of which are households of color, to purchase a home. According to 2020 American Community Survey 5-year estimates, 35.4 percent of the city's owner-occupied housing units are owned by Black households, whereas 55.6 percent are owned by White households.4 Nonprofit organizations such as ANDP are devising solutions to preserve access to homeownership for households of color and stabilize distressed neighborhoods.5

Raising Capital

ANDP was founded in 1991 through a merger between the Atlanta Chamber of Commerce's Housing Resource Center and the Atlanta Economic Development Corporation Neighborhood Development Department. A particular focus of ANDP was to acquire and rehabilitate single-family homes that became vacant because of the 2008 foreclosure crisis.6 HUD funding was a large source of support for this work. The city of Atlanta and eight surrounding counties received $93 million from the first round of HUD's Neighborhood Stabilization Program (NSP) in 2008 and $31 million in the third round in 2010, which helped local municipalities purchase, rehabilitate, offer downpayment assistance, and sell or rent vacant homes in communities impacted by the foreclosure crisis.7 ANDP leveraged more than $34 million in NSP funds for its single-family housing portfolio across seven jurisdictions of the Atlanta metropolitan area. After the final round of NSP funding, ANDP sought certification as a community housing development organization, which allowed it to compete for federal funds from the HOME Investment Partnerships program. HOME funding enabled ANDP to scale up its efforts to acquire and rehabilitate single-family homes with less risk. Approximately 60 percent of the sales from HOME-funded single-family homes financed the rehabilitation of additional HOME projects.8 HOME funding was an "important part of the genesis of our single-family work," said Jay Perlmutter, ANDP's managing director of single-family development, and, combined with NSP, the two programs financed approximately 90 percent of ANDP's work in its early years.9 ANDP also is approved to participate in the Federal Housing Administration's (FHA's) HUD-Approved Nonprofit and Governmental Entities Program, including FHA's real estate owned (REO) sales program.10 From 2013 to 2018, ANDP also acquired more than 50 single-family REO properties donated from private banks as well as Fannie Mae and Freddie Mac, which gave ANDP "first look" opportunities to submit offers. ANDP renovated REO homes and sold them to veterans and LMI households. As of September 2022, ANDP acquires fewer than 10 percent of its homes using HOME program funding.11

As federal funding decreased, staff at ANDP began to pivot to other sources of capital and examine how philanthropic organizations and banks could fund program-related investments. In addition to its development work, the organization also distributes capital to other developers of affordable housing through its ANDP Loan Fund, which operates as a separate nonprofit subsidiary of ANDP.12 The fund issues loans ranging from $500,000 to $2 million to local affordable housing developers for predevelopment, acquisition, construction, rehabilitation, gap funding, and lines of credit. The ANDP Loan Fund prioritizes projects serving LMI residents in the Atlanta metropolitan area and throughout Georgia.13 Reinvestment Fund, a leading national community development financial institution (CDFI), co-lends and provides loan underwriting services.14 Because of the partnership with Reinvestment Fund, the ANDP Loan Fund has grown from $3 million to $16 million and is a top CDFI lender to small, minority, and women-owned developers in Georgia.15

As ANDP scaled up its development efforts, the organization was also able to secure low-cost enterprise debt to acquire and renovate existing homes or build new homes. In 2012, ANDP sought enterprise-level loans from private banks and social impact organizations in Atlanta and across the country to finance its single-family development work. From 2014 to 2022, ANDP's enterprise loans increased from $200,000 to $14 million and grew from just 2 investors to 10.16 The enterprise capital saves ANDP approximately $14,000 per home, resulting in lower home prices for homebuyers. Enterprise-level investments allow ANDP to make all-cash offers, facilitate quick closings, and remain competitive for New Markets Tax Credit (NMTC) program and Capital Magnet Fund (CMF) equity. ANDP has had four suballocations of NMTC totaling $40.5 million that it has used to develop more than 220 single-family homes.17

Front view of a small single-family home.
An array of capital sources allows ANDP to list its homes at prices lower than the market rate so that low-income households can become homeowners. Photo courtesy of ANDP

Programs Expand Affordable Housing

ANDP staff were aware of the many place-based community development strategies being enacted in the city of Atlanta, but very few of these were happening in the suburbs, where many LMI families faced considerable needs. The organization focused on 15 ZIP Codes in DeKalb County (located east of the city of Atlanta) that had low homeownership rates as a result of the lingering effects of the foreclosure crisis.18 During the Great Recession, more than 18,000 homeowners in south DeKalb County lost their homes to foreclosure, and about one-third of them experienced negative equity.19 By 2012, DeKalb County as a whole had approximately 7,000 vacant properties.20 In 2019, ANDP partnered with Reinvestment Fund, Kaiser Permanente, and The Kendeda Fund, among others, to launch the Home South DeKalb program, which committed financial resources to acquire and rehabilitate 100 single-family homes over a 3-year period and improve homeownership rates, household wealth, and neighborhood stability in south DeKalb County.21 ANDP and its partners invested a total of $20 million, and by the end of the program, ANDP had exceeded its goal, acquiring and preserving 109 single-family homes, of which 83 were affordable homeownership units and 26 were affordable rentals.22

In July 2020, ANDP launched its Closing the Gap initiative, a 5-year plan to invest $450 million to create or preserve at least 2,000 affordable homeownership and rental units in predominantly Black neighborhoods across the Atlanta metropolitan area and its surrounding counties. The initiative is financed through several sources, including enterprise-level debt; social impact funds; philanthropy; and federal sources such as NMTCs, CMF, and low-income housing tax credit (LIHTC) equity.23 George Burgan, senior director of communications and technology at ANDP, explained that "While affordable homeownership is of utmost importance to us, there have to be more players in the market addressing single-family rentals and affordable apartments, because 98 percent of [the apartments] Atlanta has built in the last decade have been luxury apartments."24 Out of the 2,000 units of affordable housing in the program, 1,250 will be affordable multifamily rentals, 500 will be single-family homeownership units, and 250 will be single-family rentals.25 ANDP is on track to meet its 2,000-unit goal by 2025. Of the 2,000 single-family homes and apartment units planned for the program, 1,116 of them were either completed or in development as of September 2022.26

Developing Equitable Opportunities

Burgan explained that encouraging the growth of minority-owned construction businesses is as important as closing the homeownership gap. Half of ANDP's contractors and construction partners are Black-owned businesses, many of which struggled during the Great Recession. Burgan noted that "By 2025, [ANDP] will have invested $50 million in Black-owned businesses in the real estate sector." He indicated that partnering with ANDP has helped businesses hire staff, who, in turn, have become homeowners. "Success is breeding success in that situation, and ANDP likes to incorporate equity and economic opportunity in every phase of our work, whether it's our lending, our development work, who's on our board, [or] the communities we serve," said Burgan. "It has to be part of the fabric of who we are." ANDP's risk-sharing partnerships help private, minority-owned and -operated contractors grow their businesses with low-cost loans and direct contracts to finance their development work. ANDP reviews project proposals from partner contractors and holds the property title in its name. After ANDP closes on the property, the contractor can begin renovating immediately. ANDP manages the utilities and insurance on the property so that ownership costs do not overburden the small business developer. This arrangement helps local developers expand their businesses and allows them to subcontract certain aspects of the project to others if needed. As Perlmutter explained, ANDP and its contractors operate under a shared risk model; if the projects do well, the proceeds are evenly split, and if the project falters, both parties share in the loss. "It's a risk-based model based upon mutually agreed upon benefits and rewards," Perlmutter explained.27

The varied sources of capital help ANDP price its homes affordably, ensuring that potential homebuyers do not have to compete in the mainstream housing market and are able to access financial assistance to make homeownership a reality. Although ANDP targets households earning no more than 120 percent of the area median income (AMI), most of its clients earn about 70 percent of AMI. Among its homebuyers, 71 percent are Black, 15 percent are veterans, and 79 percent receive downpayment assistance. The average annual household income of ANDP's homebuyers is $43,000. Whereas median sales prices in the Atlanta metropolitan area were approximately $395,000 as of September 2022, ANDP sold its homes for approximately $270,000, roughly 30 percent less than the market rate. The renovated homes also include energy-efficient fixtures and appliances, which help families save an average of $427 per year and keep homeownership more affordable for LMI households over the long term.28

In 2019, the ANDP Loan Fund became a financial member institution of the Federal Home Loan Bank of Atlanta, which allowed ANDP to participate in the bank's Affordable Housing Program (AHP).29 ANDP can access AHP funding to assist clients and other buyers with downpayments, closing costs, and other housing finance needs. In 2019, ANDP determined that 93 percent of its buyers had remained in their homes for 5 years or more, contributing to neighborhood stability and student retention at local schools. As of 2021, the buyers had an average monthly mortgage of $717 and had gained more than $135,000 in equity. As Burgan explained, this equity is an important piece of upward mobility, enabling homeowners to improve their homes, finance higher education, or start a small business.30

Front view of a two-story house with number "2202" on one of the porch columns.
Through its Beyond 9th initiative, HPI has acquired more than 370 homes, and as of August 2022, it had renovated 120 homes using public and private sources of capital. Photo courtesy of Marian Silliman

Adapting to Market Fluctuations

Lower mortgage interest rates during the COVID-19 pandemic allowed potential homebuyers to purchase homes even if the sales prices were high. During the pandemic, higher-income households began purchasing second homes, and investors bought up a greater percentage of the housing supply. As interest rates dropped, "everybody wanted in while those numbers were good," said Burgan, "so you have almost this perfect storm of demand, [but the] supply wasn't meeting the need before the perfect storm" — and it is still considerably behind.31 With mortgage interest rates above 7 percent as of October 2022, their highest rate in 15 years, ANDP is shifting its focus to new construction to help increase the supply of affordable housing and because "it's hard to do renovations and make the numbers work," explained Perlmutter.32 The combination of rising interest rates, high home prices, and the difficulty involved in estimating renovation costs for distressed properties will make future property acquisition difficult. In addition, households typically make their purchase decisions based on their estimated monthly payment, and potential homebuyers likely will have difficulty purchasing homes over the next year because of these market shifts. The recent increases in interest rates and, in turn, the cost to buy a home, means that creating additional affordable rental units is even more critical to ensure that households can budget and save for homeownership.33

Stabilizing Housing in Louisville's West End

The history of west Louisville begins in the late 1830s, when free Black families began purchasing property west of 9th street in what would become the West End neighborhood.34 Unable to live in other areas of Louisville because of racist housing policies, Black families settled in the West End and built a thriving community with their own businesses, grocery stores, and theaters. Home to Muhammad Ali and other prominent Black individuals, the area has a rich history.35 Beginning in the 1960s, however, urban renewal programs demolished many of the area's businesses and constructed large-scale public housing projects.36 Today, the large number of abandoned properties and the low rates of homeownership are reminders of the area's segregated past. In 2021, half of the area's residents earned less than approximately $25,000 per year, and approximately 40 percent of the population lived below the federal poverty level.37 The area has struggled to rebound from the foreclosure crisis, and it has endured an onslaught of out-of-state investors who purchase vacant properties and landlords whose high rents displace existing residents.38 In the West End, the homeownership rate is approximately 24 percent, with investors owning most of the housing stock.39 Founded in 1990, the Housing Partnership Inc. (HPI) is a nonprofit real estate development organization with a mission to expand affordable housing opportunities for LMI residents in the West End through real estate development and acquisition, a lease-to-purchase program, homebuyer education, and affordable home sales with affiliated downpayment assistance.40

A man and a woman posing in front of a two-story brick building and holding a large wooden key with the words "Sold by The Housing Partnership Inc." and a phone number on it.
In addition to maintaining a pool of renovated and affordable homes in Louisville's West End, HPI helps families achieve homeownership through downpayment assistance and HUD-certified homebuyer education courses. Photo courtesy of Marian Silliman

Preserving Homeownership Opportunities

Federal, philanthropic, city, and private funding sources have enabled HPI to successfully acquire, renovate, and preserve homes for families in west Louisville. In 2017, HPI began participating in the FHA Mortgagor program, which helped the nonprofit acquire and renovate single-family homes in the West End.41 The program allows HUD-approved nonprofit organizations such as HPI to apply for the same FHA-insured financing as individual homebuyers.42 In 2017, HPI became the first nonprofit in the United States in more than a decade to obtain a single-family FHA 203(b) loan in its name.43 The FHA 203(b) mortgage insurance program is FHA's primary mortgage insurance program for residential properties consisting of one to four units.44 Serviced by the Kentucky Housing Corporation (KHC) — the state housing finance agency and a key partner of HPI — the FHA 203(b) loan program helped preserve affordability for five houses in the West End neighborhood.45 According to Andrew Hawes, president and chief executive officer of HPI, residents purchasing homes with the FHA loan could spend $300 to $400 per month less than they were paying in rent. This savings is "impact money for a very low-income family. [It is] additional food they can provide to their family, or furniture, or transportation," said Hawes. The FHA Mortgagor program allowed HPI to "fix the [monthly] cost and show the residents in true form, here's what your payment will be," said Hawes. The loans totaled roughly $60,000 per house. As of October 2022, HPI had sold two of the five homes to families.46 HPI is also a member of the Housing Partnership Network (HPN), a collaborative composed of more than 100 nonprofit housing and community developers. To support nonprofits striving to increase homeownership among LMI families, HPN created the Housing Partnership Fund (HPF), a CDFI certified by the U.S. Department of the Treasury.47 Financing from HPF has also helped HPI acquire and renovate properties in the West End.

Launched in 2016, the "Beyond 9th Initiative: Revitalizing West Louisville through Strategic Homeownership & Affordable Housing Opportunities" focuses on rehabilitating vacant properties in distressed areas west of Louisville's 9th street.48 A major goal of the initiative is to rehabilitate houses near existing owner-occupied houses to ensure that entire blocks can reap the positive benefits of increased property values.49 Since the launch of the Beyond 9th Initiative, HPI has acquired more than 370 vacant single-family homes with financing from private bank loans, HPF and other national CDFI grants, Louisville Metro Government, KHC Affordable Housing Trust Fund, and the Louisville Affordable Housing Trust Fund. As of August 2022, HPI had completed the renovation of 120 houses to be preserved for single-family homeownership and lease-to-purchase.50 To finance renovations, HPF allocated $6 million in NMTC equity to HPI in December 2020. Several homes previously were single-family rental units subsidized with LIHTC equity, and the Beyond 9th Initiative represents the first time in Kentucky that NMTC equity had been used to convert single-family rental units to owner-occupied homes.51

As Hawes explained, "It's really necessary that we look at the whole transaction — not just [at] development … [but also] homebuyer downpayment assistance and anything [else] we can do for mortgage affordability."52 To further reduce barriers to homeownership, HPI receives funding for downpayment assistance from regional Federal Home Loan Banks and KHC. In addition, HPI uses grant funding to provide an HPI Home Access Forgivable Loan.53 HPI also refers clients to the Louisville Metro Down Payment Assistance Program offered through Louisville Metro's Office of Housing and Community Development and connects clients to the Louisville Metro Housing Authority Homeownership Program, in which eligible public housing residents and housing choice voucher recipients receive subsidies toward a monthly home mortgage instead of rent.54 As of October 2022, HPI had awarded an average of $10,800 in downpayment assistance per purchase for a total of $692,277 allocated through the Beyond 9th Initiative.55

HPI presents families with the option of a lease-to-purchase program called PATH to Homeownership, which the organization has been operating since 2007. Upon entering the program, residents and HPI agree on a sales price for the home, and HPI holds that price for the family until they are ready to purchase. PATH to Homeownership participants typically lease for approximately 5 years or longer depending on their readiness to purchase the home. While leasing, families meet regularly with homebuyer counselors for advice on how to achieve and maintain good credit, reduce debt, and save for homeownership.56

West End residents learn about HPI's services through social media, community events, "refer-a-friend" campaigns, and word of mouth among family members and neighbors.57 In addition, HPI board members represent local affordable housing stakeholders such as Habitat for Humanity of Metro Louisville, community leaders, and local banks, which can refer clients to HPI for homebuyer counseling.58 All of HPI's residents, including those in multifamily rental units, have access to homeowner education and financial literacy classes.59 Residents enrolled in PATH to Homeownership must participate in HPI's HUD-certified NeighborWorks America homebuyer education and financial counseling program.60 The free courses cover topics such as short- and long-term budgeting, saving, improving credit scores, mortgage readiness and affordability, the appraisal process, hiring a real estate agent, home inspection, and home maintenance.61 In 2018, HPI offered these courses to 305 new and potential homeowners.62 As of October 2022, 65 houses in the Beyond 9th Initiative had been sold, 10 had active listings, and 5 were pending closing or under contract.63 An HPI executive attends every home closing, and Hawes stated that "The lease-[to]-purchase sales are always the most rewarding, because the families have such a sense of accomplishment."64 The total value of these home sales is approximately $6.7 million, with each home selling for an average of $104,000, which allows HPI to at least break even with its NMTC investment.65 KHC services loans from institutions such as FHA and the U.S. Department of Veterans Affairs as well as conventional loans, and homeowners' mortgage payments range from $360 to $628 per month.66

Realizing Positive Outcomes

By reducing barriers to homeownership, HPI is paving the way for increased home wealth in neighborhoods that historically have witnessed disinvestment because of redlining and other racist housing policies.67 For many of the programs, residents must stay in the home for a minimum of 5 years, which reduces resident turnover and improves neighborhood stability.68 As of October 2022, most of the homebuyers served through HPI's Beyond 9th Initiative were female (70%), unmarried (86%), and Black (91%) households earning at or below 49 percent of AMI.69 The combination of purchase agreements in leases, homebuyer education, credit counseling, and downpayment assistance is vital for helping LMI residents and homebuyers of color achieve successful outcomes. HPI's Beyond 9th Initiative is proving that purchasing, rehabilitating, and preserving houses for affordable homeownership is an achievable goal. These efforts have gained the attention of the investor community, philanthropy, and local government partners. Completing renovations on 120 houses simultaneously and achieving positive outcomes gives donors and partners confidence that, with their support, HPI can continue this work on a larger scale.70

A family of four with one of them holding a rabbit and standing in front of a kitchen counter.
With its acquisition fund, Acts Housing can maintain an inventory of affordable houses for families to purchase once they are financially ready. Photo courtesy of Acts Housing

Overcoming Challenges

HPI aims to acquire and renovate 100 housing units per year over the next 10 years to address blight and reduce property abandonment. Rather than acquiring one or two properties at a time, HPI plans to collaborate with the local government and the local land bank to acquire more properties across full blocks. HPI plans to acquire 40 to 45 homes in 2022 through master commissioner sales, which are often scattered homes throughout the city. The nonprofit is making progress by developing a $10 million capital fund with its philanthropic and financial partners to buy, build, and sell affordable housing. HPI hosted a capital campaign to raise funds to acquire and renovate homes to create homeownership opportunities. Because interest rates are currently high, however, many families will need affordable rental properties for longer periods of time.71

The jump in 30-year fixed mortgage interest rates from around 3 percent in 2021 to more than 7 percent in fall 2022 constrains HPI's ability to increase inventory and hold houses for long periods.72 In addition, maintaining lease-to-purchase agreements for long periods can be risky when interest rates and property maintenance costs are high. "The longer we have to keep the house in a lease-[to]-purchase relationship," the more expensive it becomes, Hawes explained. HPI will pivot toward offering affordable rental opportunities to ensure that families can remain stably housed. "If we were only a homeownership development [organization] and we did not have the ability to do lease-[to]-purchase, we would be somewhat stuck with our development pipeline with rates being at 7 percent," Hawes said. HPI's lease-to-purchase approach adapts well to fluctuations in the housing market, especially as rising interest rates depress home sales. Rather than possibly being unable to sell a house because of a lack of eligible buyers, HPI can rent the house to preserve it for the community's benefit and sustain it over a longer period. By ensuring that funding is available, HPI can begin renovations immediately after purchasing a home, which can save money in the long run. "Letting houses sit vacant for too long…can happen in… [the] blink of an eye," said Hawes. Time spent creating a development plan for a property can also leave the property open to theft and vandalism, which can increase the risks and costs of a project. In addition, properties that are vacant for more than 60 days are at risk of losing insurance coverage unless construction activity is occurring, noted Hawes.73

Since 2017, HPI has been advocating through HPN and the Homeownership Alliance for a cash-out refinance on its housing stock. Although rehabilitation loans through the FHA 203(k) program allow borrowers to purchase and refinance a home that needs considerable repairs, Hawes indicated that the program's guidelines are too cumbersome for nonprofits. Resource sharing and open dialogue among partners and other nonprofit organizations will be critical for developing future portfolios. Collaborating with other nonprofit organizations on where to develop can help spread impact and have the benefit of added security, Hawes suggested, because nonprofits can assist each other in property management, preserving affordable housing, and protecting the West End from outside interests.74

Milwaukee Nonprofit Works To Increase Homeownership

A 2022 Wisconsin Policy Forum study compared homeownership inequities among 11 U.S. cities and found that Milwaukee had the largest racial disparity in homeownership — a difference of 26.9 percentage points in owner-occupancy rates between White households and combined Black and Latinx households.75 Since 2010, Milwaukee has been losing 1,000 minority homeowners per year because of investors who target minority communities for home purchases and convert owner-occupied housing to rental housing.76 Approximately 40 percent of Milwaukee homes listed at $125,000 or less are purchased by investors, who quickly convert them to rentals.77 In 2022, 3 out-of-state investor companies purchased approximately 400 Milwaukee homes.78 These investors often make cash offers with zero contingencies, outcompeting individual buyers with traditional financing who may want a home inspection before purchase.79

Launched in 1997, Acts Housing (Acts) is a nonprofit housing organization working to reverse these trends in Milwaukee through homebuyer coaching and lending services for LMI households. In 2021, Acts began developing its strategic plan, and with board approval in January 2022, the nonprofit decided to expand its real estate department to increase the number of acquisitions. In spring 2022, the Community Development Alliance approached Acts to develop an acquisition fund, which became part of a broader strategy to increase Black and Latinx homeownership in Milwaukee and a key component of the city's Collective Affordable Housing Plan.80 Acts launched the homeowner acquisition fund in summer 2022 and set a goal to purchase 100 single-family homes and duplexes per year and resell them to LMI households for $90,000 to $140,000.81 Acts' goal for the fund is to raise $11 million for property acquisition, utilities, insurance, and operational support. Most of the financial support for the acquisition fund will come from philanthropic organizations. In August 2022, the Zilber Family Foundation issued Acts a $1 million grant, which Acts used to hire the staff needed to launch the fund. As of September 2022, the nonprofit had received a $2 million award from Wells Fargo, and the city of Milwaukee's Housing Trust Fund and Milwaukee County had contributed $2.5 million each. The remaining $3 million likely will come from other foundations or banks. Dorothy York, vice president of real estate at Acts, explained that the funds collected thus far are being allocated toward one-time startup costs. The acquisition fund will be self-sustaining because Acts will sell the properties it acquires, and the funds generated from property sales will be used to purchase more properties.82

Making Homeownership a Reality

According to York, a significant barrier to homeownership in the Milwaukee area is the shortage of affordable homes. Acts estimates that approximately 17,000 minority households in the Milwaukee area want to purchase a home, but only approximately 1,500 homes in the more affordable $125,000 price range are available each year. As the acquisition fund is brought to scale, Acts will be able to reserve several homes at once for families to purchase when they are ready. In addition to acquiring homes, Acts prepares prospective homebuyers for homeownership through its homebuyer program, which includes HUD-approved homebuyer education courses, homebuyer coaching, rehabilitation coaching, downpayment assistance, and loan programs. These services predate the acquisition fund and will continue to be critical tools to help families become homeowners. York explained that these efforts must work in concert because clients must be ready to purchase and maintain a home, and, at the same time, an inventory of affordable homes must be available for them.83

York noted that word of mouth is one of the most effective methods for potential homebuyers to learn about Acts' homebuyer program. Clients who have purchased a house and worked with Acts often share information about their homebuying experience with friends and family members. In addition, social media platforms and radio stations have helped many families become aware of the services that Acts offers. Senior staff members discuss the organization on local radio shows and answer questions about services, which generates interest from potential homebuyers. Real estate agents, local banks, and community partners also refer families to the nonprofit.84

A man and a woman standing with a mattress bag and plastic storage box in front of them.
Acts Housing helps prospective homebuyers achieve homeownership through HUD-certified homebuyer education courses, financial counseling, downpayment assistance, and loan programs. Photo courtesy of Acts Housing

Prospective buyers interested in purchasing a house through Acts must first attend a virtual homebuyer orientation session to learn more about the organization's homebuyer program, services, and timelines. Next, clients must set up an online homebuyer portal and pay for a credit report.85 Clients then complete a HUD-approved homebuyer education course, which has been a longstanding component of Acts' homebuyer program. The homebuyer education course covers topics such as financial management, affordability, occupancy, and foreclosure prevention. Clients who complete all the modules will be connected to an Acts homebuyer coach to discuss their finances and overall readiness to purchase.86

The homebuyer coach's role is to guide clients on their journey to homeownership by removing barriers and developing an action plan to help clients achieve their goals. Although clients must have a consistent monthly income, no income requirement or income verification process is needed to participate in the program. The homebuyer coach helps families manage their finances and build a downpayment by adjusting their budgets and creating debt repayment plans.87 Acts connects clients to the Milwaukee Home Down Payment Assistance Program, which offers forgivable grants of up to $5,000 to purchase a home in the city of Milwaukee and up to $7,000 to purchase a home in the city's community development block grant area. Acts also receives funding from the Housing Cost Reduction Initiative administered by the Wisconsin Department of Administration's Division of Energy, Housing and Community Resources to assist homebuyers with downpayment s, closing costs, and gap financing.88

An Acts' subsidiary, Acts Lending, provides mortgage and rehabilitation loans to families purchasing homes that are vacant, foreclosed, or in need of significant repair. Acts Lending was founded in 2013 in response to the fallout of the Great Recession, when many banks refused to lend to LMI families wishing to purchase distressed homes. Acts Lending's maximum loan amount per homebuyer is $75,000 to cover the purchase and rehabilitation of the home. The house must need a minimum of $20,000 in repairs to qualify. Families can use financing from Acts Lending to purchase their house from available inventory attained through Acts' acquisition fund and then renovate with the help of an Acts rehabilitation coach, who helps clients choose contractors, understand the process of pulling permits, collect bids, review contracts, and assess progress.89 Unlike traditional banks, Acts Lending will accept some nontraditional lines of credit. Acts also helps families searching for a home that is move-in ready arrange financing through bank partners. According to York, many bank partners have examined Acts' portfolio and determined that, in terms of the number of families repaying their loans on time, the nonprofit has actually outperformed banks. Traditional banks "looking at our portfolio have realized we're really preparing people for homeownership and for that financial responsibility," York explained, and they have begun offering financing to families who have completed Acts' homebuyer program. Most families (75%) who participate in the homebuyer program purchase homes that are move-in ready with traditional bank financing. The remaining 25 percent of homebuyers purchase homes with financing from Acts Lending to rehabilitate homes in need of repairs. York stated, "It's not just about getting people into houses but [also] getting them into houses that they can maintain and stay in as long as they choose to be there."90

A close-up of a woman and a girl in front of a siding and brick background and a scroll design black wrought iron column.
Acts Housing's homebuyers are required to stay in their homes for at least 5 years, which enables them to increase wealth through home equity. Photo courtesy of Acts Housing

Early Progress

Acts is striving to transform single-family rentals into owner-occupied homes. "There's a [night and] day difference [in] how people approach a home that they own versus a home that they rent…. When you own a home, you stay longer, [and] you stay in that community longer. You get to know the other people in the community," York said.91 Families who purchase homes through Acts must stay at least 5 years, which not only can help stabilize the community but can also increase their home equity. Through the acquisition fund, Acts will be able to compete with institutional investors by making cash offers without inspections or contingencies, leading to quick closings on properties. Holding houses will allow Acts to slow the pace of outside investor purchases, enabling families who want to make an offer with contingencies to still purchase a house.92

In 2021, 305 buyers purchased homes through Acts. Acts' new homeowners were predominantly women-headed households (65%), and women also made up most of the homebuyers (75%) who purchased tax-foreclosed homes. In 2021, Acts invested a total of $42.6 million to purchase and help families renovate housing. As of August 2022, more than 1,200 families had begun the homebuyer counseling process, paid for a credit report, and met with their homebuyer coach at least once. As of August 2022, a total of 198 families had purchased homes through Acts; according to York, Acts is on track for 2022 to surpass the number of families who purchased homes through the organization in 2021.93

As of September 2022, Acts had acquired two homes through its acquisition fund, and two additional homes were under contract. Although the acquisition fund is still in its early stages, Acts aims to acquire batches of houses rather than one house at a time to meet its goal of 100 houses per year. As of November 2022, Acts had hired three new staff who can bid, view houses, and support the operations of the acquisition fund. Once Acts has an inventory of houses, it will need to manage administrative aspects such as connecting utilities and paying for home insurance.94


Investors seeking to maximize profits can outbid individual homebuyers and put further pressure on an already tight affordable housing market. The work of nonprofit housing organizations such as ANDP, HPI, and Acts Housing to acquire homes in distressed neighborhoods is critical to combating investor practices and preserving affordable homeownership opportunities for LMI households. By renovating homes and offering assistance with downpayments and closing costs, homebuyer education, and counseling programs, these organizations are further reducing barriers to homeownership, which is key to stabilizing neighborhoods, closing the wealth gap, and increasing equity. Rising interest rates can push homeownership further out of reach for many buyers, however, so examining ways to preserve affordable rental housing is an equally important goal to give families the opportunity to save for future homeownership. Collaboration and resource sharing across nonprofits, the public sector, and social impact investors will be vital to sustaining progress.

  1. James A. Crowder Jr., Chris Schildt, and Rick Jacobus. 2021. "Our Homes, Our Communities: How Housing Acquisition Strategies Can Create Affordable Housing, Stabilize Neighborhoods, and Prevent Displacement," 10–1.
  2. Dan Immergluck. 2022. Red Hot City: Housing, Race, and Exclusion in Twenty-First Century Atlanta, Oakland: University of California Press, 153.
  3. Joint Center for Housing Studies of Harvard University. 2022. "State of the Nation's Housing: 2022," 12.
  4. U.S. Census Bureau. "Demographic Characteristics for Occupied Housing Units," 2016-2020 American Community Survey 5-Year Estimates ( Accessed 4 August 2022.
  5. Atlanta Neighborhood Development Partnership, Inc. "Our Work" ( Accessed 4 August 2022.
  6. Atlanta Neighborhood Development Partnership, Inc. "About ANDP" ( Accessed 19 September 2022.
  7. Atlanta Regional Commission, Piece by Piece Foreclosure Response Initiative. n.d. "Overview of NSP 1 Implementation and Best Practices in Metro Atlanta," 4.
  8. John O'Callaghan and Mandy Eidson. 2021. "Tackling Vacancy and Abandonment: Strategies and Impacts after the Great Recession" in Tackling Vacancy and Abandonment: Strategies and Impacts after the Great Recession, Robert E. Finn, Lisa Nelson, Sarah Stein, eds. Center for Community Progress, the Federal Reserve Bank of Cleveland, and the Federal Reserve Bank of Atlanta, 154.
  9. Joint interview with George S. Burgan and Jay Perlmutter, 27 September 2022.
  10. "Nonprofit Organizations and Governmental Entities Program Guidelines," U.S. Department of Housing and Urban Development website ( Accessed 9 August 2022; "HUD-Approved Nonprofit (Roster)," U.S. Department of Housing and Urban Development website ( Accessed 9 August 2022.
  11. O'Callaghan and Eidson, 154–5; Joint interview with George S. Burgan and Jay Perlmutter.
  12. Joint interview with George S. Burgan and Jay Perlmutter.
  13. "Capital for Community Development," Atlanta Neighborhood Development Partnership, Inc. website ( Accessed 5 October 2022.
  14. "Capital for Community Development: ANDP Loan Fund," Atlanta Neighborhood Development Partnership, Inc. website ( Accessed 5 August 2022.
  15. Atlanta Neighborhood Development Partnership, Inc. n.d. "Addressing Metro Atlanta's Affordable Housing Crisis: The ANDP Loan Fund"; Email correspondence with George S. Burgan, 2 November 2022.
  16. O'Callaghan and Eidson, 158; Email correspondence with George S. Burgan, 2 November 2022.
  17. Joint interview with George S. Burgan and Jay Perlmutter.
  18. Ibid.
  19. "Home South DeKalb," Atlanta Neighborhood Development Partnership, Inc. website ( Accessed 5 August 2022.
  20. Immergluck, 155.
  21. "Home South DeKalb"; Joint interview with George S. Burgan and Jay Perlmutter; Email correspondence with George S. Burgan, 2 November 2022.
  22. Joint interview with George S. Burgan and Jay Perl- mutter; "2019 in Review: Home South DeKalb," Atlanta Neighborhood Development Partnership, Inc. website ( Accessed 5 August 2022.
  23. "Closing the Gap: ANDP to Develop 2,000 Affordable Homes by 2025," Atlanta Neighborhood Development Partnership, Inc. website ( Accessed 4 August 2022; Joint interview with George S. Burgan and Jay Perlmutter; O'Callaghan and Eidson, 155.
  24. Joint interview with George S. Burgan and Jay Perlmutter.
  25. O'Callaghan and Eidson, 152.
  26. Joint interview with George S. Burgan and Jay Perlmutter.
  27. Ibid.
  28. Ibid; Redfin. "Atlanta Housing Market" ( Accessed 7 October 2022.
  29. "Capital for Community Development: ANDP Loan Fund."
  30. Federal Home Loan Bank of Atlanta. n.d. "Affordable Housing Program: Homeownership Set-aside Program"; Joint interview with George S. Burgan and Jay Perlmutter; Email correspondence with George S. Burgan, 2 November 2022; Atlanta Neighborhood Development Partnership, Inc. 2019. "Creating Homeownership & Economic Opportunity: Study of Homeowner Savings, Retention, and Wealth Creation for ANDP Homebuyers in Metro Atlanta," 10; O'Callaghan and Eidson, 154.
  31. Ibid.
  32. Jeff Lazerson. 2022. "30-year mortgage rates soar to 6.7%, highest in 15 years." Los Angeles Daily News, 29 September; Freddie Mac. "Mortgage Rates Surpass Seven Percent" ( Accessed 31 October 2022; Joint interview with George S. Burgan and Jay Perlmutter.
  33. O'Callaghan and Eidson, 157; Joint interview with George S. Burgan and Jay Perlmutter.
  34. Jermaine Fowler. 2020. "The West End of Louisville (CA. 1835- )," Black Past, 21 April.
  35. Ibid; Oscar Perry Abello. 2018. "Louisville's West End Fighting to Own Its Future," Next City, 27 November.
  36. Fowler.
  37. Kentucky General Assembly. 2021. "House Bill 321, An Act relating to revenue."
  38. Fowler; Abello.
  39. Interview with Andrew Hawes, 27 September 2022.
  40. The Housing Partnership, Inc. "Our Mission" ( Accessed 9 August 2022; Housing Partnership Network. n.d. "Creating Homeownership Opportunities for Long-Time West Louisville Residents"; "Lease Purchase Opportunities," The Housing Partnership, Inc. website ( Accessed 25 October 2022.
  41. Interview with Andrew Hawes; Andrew Hawes. 2018. "Beyond 9th Initiative." Kentucky Housing Corporation.
  42. "HUD-Approved Nonprofit Organizations and Government Entities," U.S. Department of Housing and Urban Development website ( Accessed 30 September 2022.
  43. Hawes; Interview with Andrew Hawes.
  44. Federal Deposit Insurance Corporation. n.d. "203(b) Mortgage Insurance Program."
  45. Interview with Andrew Hawes; "Homeownership," Kentucky Housing Corporation website ( Accessed 4 October 2022.
  46. Interview with Andrew Hawes.
  47. Housing Partnership Network.
  48. Ibid; The Housing Partnership, Inc. 2022. "Snapshot Report. Beyond 9th: Revitalizing West Louisville through Strategic Homeownership." Document provided by Marian Silliman, 28 September 2022.
  49. Hawes.
  50. The Housing Partnership, Inc. 2022; Email correspondence with Marian Silliman, 7 October 2022; Interview with Andrew Hawes.
  51. Interview with Andrew Hawes; Email correspondence with Marian Silliman, 7 October 2022 and 1 November 2022.
  52. Interview with Andrew Hawes.
  53. The Housing Partnership, Inc. 2022; Email correspondence with Marian Silliman, 31 October 2022.
  54. "Down Payment Assistance Program," Louisville-Jefferson County Metro Government website ( Accessed 4 October 2022; "Homeownership Program," Louisville Metro Housing Authority website ( Accessed 4 October 2022; Office of Housing and Community Development. n.d. "Down Payment Assistance."
  55. Email correspondence with Marian Silliman, 31 October 2022.
  56. Hawes; Interview with Andrew Hawes; Email correspondence with Marian Silliman, 7 October 2022.
  57. The Housing Partnership Inc. 2022. "Make Your Friends Your Neighbors!" Facebook post. Accessed 4 October 2022; The Housing Partnership Inc. 2022. "We had fun Saturday at the Parkland Plaza Grand Opening, coordinated by the Center for Neighborhoods!" Facebook post. Accessed 4 October 2022; The Housing Partnership Inc. 2010. "Learn from the Best: HPI Homeowners Talk About Their Experience," YouTube video, 5 November. Accessed 31 October 2022.
  58. The Housing Partnership, Inc. "Board" ( Accessed 4 October 2022.
  59. "Home Buyer Education," The Housing Partnership, Inc. website ( Accessed 4 October 2022.
  60. Interview with Andrew Hawes; The Housing Partnership, Inc. 2022.
  61. The Housing Partnership, Inc. n.d. "Homebuyer Education & Financial Counseling Program"; "Lease Purchase Opportunities."
  62. The Housing Partnership, Inc. 2018. "2018 Annual Report," 5; 6.
  63. Email correspondence with Marian Silliman, 31 October 2022.
  64. Interview with Andrew Hawes.
  65. Ibid; Email correspondence with Marian Silliman, 31 October 2022.
  66. Housing Partnership Network; "Secondary Market Funding Source," Kentucky Housing Corporation website ( Accessed 4 October 2022.
  67. Interview with Andrew Hawes.
  68. Limestone Bank. n.d. "Affordable Housing Program"; Housing Partnership Inc. 2022. "Step Up. To a Home of Your Own"; "Down Payment Assistance Program," Louisville-Jefferson County Metro Government website ( Accessed 4 October 2022.
  69. The Housing Partnership, Inc. 2022; Email correspondence with Marian Silliman, 31 October 2022.
  70. Interview with Andrew Hawes.
  71. Ibid.
  72. Interview with Andrew Hawes; Freddie Mac.
  73. Interview with Andrew Hawes.
  74. Ibid; "203(K) Rehab Mortgage Insurance," U.S. Department of Housing and Urban Development website ( Accessed 30 September 2022; National Community Stabilization Trust. "About Homeownership Alliance" ( Accessed 25 October 2022.
  75. Ned Littlefield, Joe Peterangelo, and Rob Henken. 2022. "Hitting Home: Milwaukee's homeownership inequities and how we compare to peer cities," Wisconsin Policy Forum, 5.
  76. Community Development Alliance. n.d. "Milwaukee's Collective Affordable Housing Plan: Process," 19; 26.
  77. Interview with Dorothy York, 23 September 2022.
  78. Talis Shelbourne. 2022. "ACTS Housing is launching an acquisition fund to combat investor landlord purchases in Milwaukee." Milwaukee Journal Sentinel, 8 August.
  79. Wisconsin Public Radio. 2022. "Milwaukee organization launching homeowner acquisition fund to help residents buy homes."
  80. Community Development Alliance, 15; 17; Acts Housing. "Our Process" ( Accessed 26 October 2022; Acts Housing. 2021. "Acts Housing Impact Report: January 1-December 31, 2021"; Interview with Dorothy York.
  81. Wisconsin Public Radio; Shelbourne.
  82. Shelbourne; Interview with Dorothy York; Wisconsin Public Radio.
  83. Ibid.
  84. Ibid; Acts Housing. "Work for Acts Housing!" ( Accessed 8 December 2022.
  85. "Homebuyer Counseling," Acts Housing website ( Accessed 26 September 2022; "Homebuyer Program Virtual Orientation," Acts Housing website ( Accessed 26 September 2022.
  86. Interview with Dorothy York; Wisconsin Public Radio; "Online Homebuyer Counseling," Acts Housing website ( Accessed 26 September 2022.
  87. Acts Housing. 2022. "Virtual Orientation Part 1," YouTube video, 9 March. Accessed 26 September 2022; Acts Housing. 2022. "Virtual Orientation Part 2 Homebuyer Coaching," YouTube video, 9 March. Accessed 26 September 2022; Acts Housing. "Work for Acts Housing!"
  88. Acts Housing. "Work for Acts Housing!"; "Milwaukee Home Down Payment Assistance," City of Milwaukee website (; "Housing Cost Reduction Initiative (HCRI)," State of Wisconsin website ( Accessed 28 September 2022.
  89. Interview with Dorothy York; Acts Housing. "Work for Acts Housing!"
  90. Interview with Dorothy York.
  91. Ibid.
  92. Shelbourne; Interview with Dorothy York.
  93. Acts Housing 2021; Interview with Dorothy York.
  94. Ibid; Email correspondence with Claire Britcliffe, 1 November 2022.


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