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Housing Counseling: For first-time homebuyers, ‘the dream is still there’

Competitive market heightened the need for housing education

On the heels of the COVID-19 lockdowns of 2020 came the hottest real-estate market that Pittsburgh has seen in decades. Although it didn’t change what first-time buyers were looking for in a home, it did increase the challenge for them to make a purchase, says Jonathan Weaver, Mon Valley Initiative’s housing counselor since 2013.

“The dream is still there—people are still hopeful, people are still interested in homeownership, but I think they realize their journey might be slower, not only because of their own problems, but because of the market,” says Weaver. “Lenders have tightened up a bit. Conventional credit scores have ticked up a little bit. Credit lines have been reduced.”

And sellers—seeing unprecedented demand—began pressuring people to make their purchases quickly, skipping home inspections and bypassing programs that offer low-interest loans and grants to first-time buyers. One such program—First Front Door, offered by the Federal Home Loan Bank of Pittsburgh—provides up to $5,000 towards a down-payment and closing costs for qualified buyers.

That pressure on homebuyers to rush a purchase frustrates Weaver, who each year helps applicants through the First Front Door process. “I think of how financially impactful that decision is—how long will it take them to save the $5,000 they just passed up?” he says. “What could that five grand have meant in their retirement plan, all because their seller wanted to close in 30 days instead of 60 days? All of those little things that you miss make a difference.”

Educating buyers about the “little things”—and not so little ones—is Weaver’s mission, and has been the goal of MVI’s housing counseling program for two decades.

Economists have long pointed out that for many working families in the United States, the path to long-term financial stability is through homeownership. For middle-class Americans, owning a home provides more than shelter—it’s also their most important asset. To help stabilize Mon Valley real estate values and encourage homeownership, MVI offers pre-purchase housing counseling—not just for people who are buying homes that MVI has constructed or renovated, but for homebuyers throughout Western Pennsylvania.

Support for MVI’s housing counseling program comes from lenders such as Citizens Bank and Huntington Bank, as well as the U.S. Department of Housing & Urban Development and Pennsylvania Housing Finance Agency and grants and donations from charitable foundations. The HUD-certified program guides potential homebuyers through the process—beginning with whether or not homeownership is the right choice for them.

According to the U.S. Census Bureau, the median household income in the counties served by MVI ranges from $60,471 to $63,043. Most of the clients who come to Weaver for help make far less. They often have poor credit and are carrying large amounts of student or medical debt. Weaver reviews their credit report with them and advises them on ways to cut their expenses and increase their savings. He also explains what credit scores mortgage lenders want to see before they’ll approve a loan.

“About 55 percent of the people I work with make less than $30,000 per year,” he says. “I don’t know if someone who makes less than $30,000 per year can be a homeowner. But that person isn’t always going to be in that position. For the person who’s not ready yet, I say, ‘Keep acting as if you are ready.’ Let’s work on how to rebuild your credit. Let’s talk about whether or not you have a 401(k) retirement plan. Credit is the first thing clients have to work on, and savings is the second thing.”

Weaver is certified to provide pre-purchase housing counseling by both the Pennsylvania Housing Finance Agency and the U.S. Department of Housing & Urban Development. His personalized advice to a potential homeowner—and their successful completion of MVI’s housing counseling program—can allow them to qualify for a reduced-interest loan guaranteed by one of those agencies. On average, 500 people inquire about MVI’s housing counseling each year, and roughly 250 enroll and complete the program. After a busy 2019 for MVI’s housing counseling program, 2020 looked to be another good year, but due to the tight housing market and spiraling home prices, participation numbers were lower in 2021 than expected.

The arrival of the COVID-19 pandemic in the United States caused a statewide shutdown of all non-essential services, including real estate sales. So Weaver, like other MVI staff members, shifted his work to helping people who had been adversely affected by the pandemic. Then, as real estate agents and mortgage brokers gradually returned to work, he resumed pre-purchase housing counseling, using online tools, such as Zoom, to meet with clients.

In years past, Weaver has conducted informal question-and-answer sessions that he calls “Homebuyer’s Clubs” in which a group of potential first-time home purchasers can get together and ask questions of an expert—a loan officer, a home inspector or a real estate agent—and one another.

Due to the pandemic, only one in-person Homebuyer’s Club was held in 2020. Instead, Weaver and the MVI team moved the events online—and for the first time, also streamed them, live, on Facebook and YouTube. While the in-person events were attended by 10 to 12 people, the online events in 2020 and 2021 received many more views, and replays, by potential home purchasers who couldn’t attend in person.

“It’s almost an antiquated idea to tell people they have to come to a meeting at a certain time,” Weaver says. “People want to be able to access this information at a time that suits their schedule better. We can actually reach further by communicating over the phone and the Internet, and I don’t think we’re going to put this genie back in the bottle in terms of insisting on face-to-face meetings.”

With vaccines and safety precautions in place, Weaver has been able to resume some limited face-to-face interaction with clients, which includes accompanying them to the closing, when they sign the papers and purchase their new home.

Whether delivering services in-person or on the Internet, he says, the goals are the same. “We’re still trying to meet with people,” Weaver says. “We’re still trying to communicate information. I’m hopeful. People still want to be homeowners, and there is safe, affordable housing in our area. Many of the houses we’re looking at are fixer-uppers. But there are opportunities for people to buy homes in places like Elizabeth, Donora, Monongahela and McKeesport.”