In the United States, there are homeowners with very low incomes. Their housing costs are high when compared with those incomes. Even for someone who owns their home without a mortgage, there are still recurring expenses such as utilities and property taxes.
There is also maintenance and capital repairs, such as fixing the front steps, replacing the roof or upgrading the wiring. Loans can sometimes be organized to pay for these larger expenses, but with a small income, lenders see these borrowers as a high risk. Lenders may also see the property to be fixed up as a high risk. When this happens, a loan might be offered at a higher rate of interest or simply not be offered at all.
With a small income, any of these costs can spell a financial crisis which could lead to homelessness. This post discusses a few ways that help to prevent this from happening. These examples are from the United States, but there are homeowners with low incomes in other countries1. They may also be struggling to hang on to their housing. The initiatives discussed in this post may therefore appeal to readers in other countries as well.
In the United States, homeowners may be eligible for the federally funded Weatherization Assistance Program, which is designed to keep homes impervious to wind, rain and snow. It has a long waiting list.
There are also state and local programs that provide loans to low income homeowners for essential repairs. Some offer forgivable loans, which means the owner does not have to pay back the loan, provided they continue to live in their home after the repairs are done. Where these programs exist, homeowners would seem to have a pretty good deal. But the story really just starts here, because it can be tricky to qualify for the loans and grants.
Some of the programs are very specific about what they will pay for. As an owner, you might need a new roof. You might also need to have your wiring upgraded. If the loan program is for roofs, an owner would need to demonstrate that the house is in sound condition. The wiring upgrade could put the house out of the running for the roof repair funding, unless there’s a way to first pay for the wiring upgrade. Falling through the cracks like this is a very common story for homeowners with very low incomes.
Pennsylvania has come up with a program to bridge these gaps. It’s a loan/grant to pay for repairs that prevent owners from qualifying for other repair loans. It is a one time program that will be paid for with funds received from the American Rescue Plan Act. You can read more about it in Shelterforce: Sealing the Cracks in Weatherization and Home Repair
In Portland, a new app is connecting local residents to help their neighbours. Try: Thinking Small And Useful: Helping Senior Homeowners Sit Tight
The article linked below profiles another actor in the housing rehabilitation business: Community Development Corporations (CDCs), which got their start in the 1960’s. CDCs began to support communities that had been torn apart by urban renewal. They are frequently centred on areas where many residents were Black and poverty was widespread. Today, smaller communities and rural areas with high levels of poverty are also taking an interest in CDCs.
Homeowners with low incomes face similar challenges, regardless of where they live. Some of the CDCs in smaller centres and rural communities are giving priority to repairing and upgrading housing stock. You can read more about these developments in Shelterforce: CDCs Are Having a Moment. Can the Momentum Last?
