A District-based nonprofit is working to match low- and middle-income residents with appropriate home loans in an effort to protect them from foreclosure.
Jim Gray, vice president of NCB Capital Impact, said the recent meltdown in the subprime mortgage market is proof potential homeowners with limited means need to be careful when taking out home loans.
Foreclosure rates on subprime mortgages — home loans given to people with less than stellar credit — have spiked, with many predicting these rates will continue to increase as the housing market flattens.
In the District, Gray said, concerns about a sharp spike in foreclosures are mounting because subprime instruments were popular with people trying to cash in on the recent housing boom.
Now that the market is softening, some who took out these type of loans are having difficulties making payments.
“We’re trying to help people figure out for themselves what housing solutions work best for them,” he said in an interview with The Examiner. “We’re trying to avoid default approaches that are so often problematic in this marketplace.” The organization is focusing on fixed interest rates and loans with predictability, he added, to give homeowners greater stability.
Gray said one option often ignored by homeowners is housing cooperatives. Last month, NCB, along with Delegate Eleanor Homles Norton and City Council Chairman Vince Gray, hosted a clinic to educate people on co-op ownership opportunities for low-income residents, as well as how to manage co-op buildings.
“The co-op clinic represents a big step for our efforts to assist Washington, D.C. in creating long-term sustainable and affordable housing in this increasing unaffordable market,” said Terry Simonette, president and chief executive office of NCB.
In addition, last week NCB received $400,000 in grants from the federal Housing and Urban Development Department to fund research on other ways to secure affordable housing for working families.
