Barings, nonprofit Common Wealth Charlotte launch savings program for low-income homeowners
Written by Erik Spanberg – Managing Editor, Charlotte Business Journal. Appeared here on Feb 2, 2023.
Barings is teaming with nonprofit Common Wealth Charlotte on a pilot program to help low-income homeowners stay in their homes and build financial stability.
The two-year program, MyAffordableHome, will provide a combination of financial counseling and education with a matching savings program to help pay for home maintenance and fill in occasional gaps on mortgage payments. Homeowners who make $2,500 per month or less will be eligible, aligning with what is about 30% of area median income for a family of four ($28,250).
Barings, a $347 billion Charlotte-based financial services and investments management firm, is covering the financial costs of the program. Chuck Jones, Common Wealth Charlotte executive director, said the goal is to have participants save $20 per pay period, which would equate to $1,040, allowing a participant, with matching funds, to build a reserve fund of $2,080 over the course of the two-year program.
“One of the key missing components in the affordable-housing conversation is sustainable housing,” Jones told CBJ. “There’s a lot of good effort on getting people into affordable housing but they’ve got to stay there.”
Jones said establishing the habit of saving money for anticipated maintenance and repair needs is as important as the actual savings accrued as part of the two-year program.
And he pointed out, people who have rented most or all their lives are not used to paying for repairs and maintenance, making even routine expenses life changing.
“They’re targeting individuals who are very much living paycheck to paycheck,” Elizabeth Cooper, Barings head of social impact, told CBJ. “If you have a burst pipe, your HVAC goes out, those are daunting for someone not living paycheck to paycheck.”
Common Wealth Charlotte will vet the candidates and administer the various aspects of MyAffordableHome. Cooper said that Barings, through other community initiatives, including ones aimed at bridging the digital divide, will help find program candidates, too.
Jones said the concept of MyAffordableHome fits with the nonprofit’s mission: “We are about building financial capability, not financial assistance.”
Common Wealth Charlotte helps economically vulnerable people become more stable through financial education and counseling and access to interest-free loans.
Cooper and Jones said they were intrigued by the idea because, if successful, it can easily be expanded both in the number of people served locally and by introducing the concept to other parts of the country.
According to a survey by Cinch Home Services, 44.9% of homeowners said maintenance costs are higher than they anticipated. Last summer, the Federal Reserve found that 32% of adults could not cover an unexpected expense of $400, which was an improvement over previous years.
The Charlotte area is facing several housing crises at once, with rapid increases in apartment rent and home prices in recent years. Even with a recent softening in the housing market, affording a home or an apartment remains out of reach for many residents.
In November, UNC Charlotte’s Childress Klein Center for Real Estate released its annual State of Housing Report. It found that just 3.8% of homes sold in the Charlotte area cost less than $150,000. Between January 2020 and September 2022, median home prices increased to $420,000 from $273,500.
There is some good news amid the challenges. Last month, Mecklenburg County economist Brandon Simmons noted that between 2019 and 2021 the county’s homeownership rate grew to 60.3% from 58.3%. One of the biggest challenges is the steady increase in cost-burdened renters and homeowners, defined as those who spend more than 30% of their income on rent or mortgage plus utilities.
To learn more and to apply, visit myaffordablehome.org.