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Homeownership

Zuckerberg’s initiative helps teachers to buy homes

(HOMEOWNERSHIP) If any of your clients are teachers, you should know about the Landed program that pays it forward.

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CZI investments

The Chan Zuckerberg Initiative (CZI), the $45 billion philanthropy vehicle created by Mark Zuckerberg and his wife, Priscilla Chan, has recently pledged $5 million to Landed, a Y Combinator startup dedicated to helping educators buy homes.

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The most recent in a number of programs seeking to assist educators with the ever-increasing housing prices in the San Francisco Bay Area, Landed seeks to connect investors with educators that would otherwise be unable to afford a house on their own.

First things, first

The startup offers to pay up to half of the standard 20% down payment required to purchase a house featuring zero interest or monthly payments for the buyer aside from the mortgage.


graphic courtesy of TechCrunch

Instead, Landed makes a return on its investment whenever the homeowner decides to sell or refinance the house, taking a cut of up to 25% of the appreciation or depreciation of the home’s value.

It also makes money in the meantime by taking a cut of the standard realtor referral fee, who in turn pay nothing extra for using Landed’s services.

Being a lifelong Bay Area resident and the son of an educator, I can assure you that it’s a pretty sweet deal. Not that it’s much easier around the rest of the country, but finding housing in the Bay Area on a teacher’s salary is no joke.

How it works

After applying online, educators are paired with a lender who then determines whether or not they qualify for a mortgage. If approved, they are then linked up with a real estate agent that helps them find a home.

Once they have found a home, Landed pays up to 50% of the down payment in return for its equity stake in the house.

Viewing Landed as a “stair-step to ownership,” CEO Jonathan Asmis hopes that educators helped by the startup will earn enough from the home’s appreciation to purchase their next home without assistance.


graphic courtesy of TechCrunch

Paying it forward

CZI’s $5 million pledge to Landed will help roughly 60 educators working at schools near Facebook’s headquarters in Menlo Park afford down payments on homes.

Any money earned if the homes appreciate in value will be put back into CZI’s fund for Landed to help future educators.

According to a post on CZI’s Facebook page, their “hope is that [their] partnership with Landed will help create a sustainable model to help make home ownership a reality for more educators and others at risk of getting priced out of the communities they serve.”

Diversifying the portfolio

Thus far, CZI has primarily focused on donating and investing in health science and education, such as their $3 billion BioHub initiative focused on ending disease. However, this is not the first time the initiative has diversified, as it has also began funding programs for the underprivileged.

A prime example of this is the $3.1 million it gave in February of this year to Community Legal Services in East Palo Alto, which offers legal services pertaining to immigration, housing and economic advancement.

It seems that CZI is aware of the economic disparities in the Bay Area that are largely due to the region’s “tech bubble,” and are in turn taking action to aid increasing number of families that are getting priced out of their homes.

Educators interested in purchasing a home with Landed’s help can apply on their website.

Andrew Clausen is a Staff Writer at The American Genius and when he's not deep diving into technology and business news for you, he is a poet, enjoys rock climbing, monster movies, and spending time with his notoriously naughty cat.

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Homeownership

FHFA extends rent moratoriums through August

(HOMEOWNERSHIP) Don’t freak out about the FHFA extending the moratorium, while many in the pay chain are affected, here’s what it means for Real Estate.

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FHFA moratorium

As millions of Americans lost their jobs at the beginning of the Coronavirus pandemic, the FHFA announced a temporary prohibition of evictions and foreclosures that was set to expire on June 30. After reevaluating the job market and the record low unemployment rate, the FHFA extended this moratorium through August 30.

However, never did the FHFA nor the federal government put a hold on the rent, utility bills, or car insurance. Instead, most peoples’ bills have become endless. It’s a full circle here, those who can’t pay their rent impact their landlords ability to pay rent, so on and so forth.

The FHFA moratorium extension allows Americans to attempt to catch up on their bills as their jobs open back up. That said, there will be a glut of rental inventory as thousands of residents have been laid off or furloughed and can’t possibly come up with several months’ worth of rent. The long term effects will ripple through the sector, from rent decreases in some areas, to vacancy levels plummeting in others.

That said, industry experts maintain that while the industry will slow due to the global pandemic, the housing sector will be revived toward the second half of the year. It is not expected to be at full steam within this calendar year, however.

NAR President Vince Malta recently commented on existing home sales, “Although the real estate industry faced some very challenging circumstances over the last several months, we’re seeing signs of improvement and growth, and I’m hopeful the worst is behind us.”

But landlords are in a different boat than the rest of the sector, and have a certain struggle ahead. Some refused to be flexible with renters, while others have sought ways to retain residents without having vacancies or having to invest in turning a unit. This moratorium helps many renters, but landlords, particularly private landlords (not multifamily) will be hard hit.

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Homeownership

4 million homeowners skip mortgage payments as forbearance requests slow

(REAL ESTATE) It is no surprise that mortgage payments are being skipped across the nation, but it’s not all a total loss…

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home mortgage payments

Over 4.1 million American homeowners are currently skipping their mortgage payments on a temporary basis as COVID-19 keeps the economy shut down, according to the Mortgage Bankers Association (MBA).

Meanwhile, forbearance requests have slowed – the MBA’s weekly survey indicates that 8.16 percent of total loans are now in forbearance plans, up from 7.91 percent the week prior, and while the share of loans in forbearance is rising, the trend is toward requests decreasing.

Mike Fratantoni, MBA’s Senior Vice President and Chief Economist, said in a statement, “There has been a pronounced flattening in loans put into forbearance – despite April’s uniformly negative economic data, remarkably high unemployment, and it now being past May payment due dates.”

Congress passed the $2.22 trillion CARES Act (the Coronavirus Aid, Relief, and Economic Security Act), under which homeowners holding a federally backed home loan may delay mortgage payments for up to a year, but politicians are quick to remind folks that the money is still due, and fees may still apply during the forbearance period.

This relief effort is the primary reason so many did not pay their mortgage this month. People are still unsure of whether or not they will be employed in the near future, and are managing their finances accordingly, particularly while lenders are still in the mood to negotiate. Economists believe that difficulties will be ongoing, and homeowners will continue to struggle as a whole.

While our economy hasn’t been hit this hard since the Great Depression, and unemployment numbers reveal widespread economic devastation, slivers of hope remain. Forbearance requests slowing isn’t the only housing hope – new home construction levels are down, but nowhere near at the same pace as other sectors harder hit.

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Homeownership

Find out if your rental home is under the 120-day federal eviction moratorium

(HOMEOWNERSHIP) COVID-19 has thrown many certainties into chaos, but heres a beacon of light if you are worried about paying rent and if you will fall victim to eviction.

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Proactively prevent foreclosure eviction

The Texas Supreme Court extended a moratorium on evictions through April 30. Dallas County’s moratorium runs through May 18. Tarrant County, next to Dallas County, has an indefinite moratorium. Meanwhile, cities, counties, and states across America have different moratoriums.

The CARES Act includes a federal eviction moratorium that begins on March 27 and lasts for 120 days.

Federally subsidized housing cannot evict tenants for non-payment for 120 days. If you’re like most renters, you may not know if your property is backed a federal program, such as HUD, FHA, USDA or Fannie Mae and Freddie Mac.

Here is a searchable database helps renters identify if their home is covered by the CARES Act

The National Low Income Housing Coalition offers a searchable database of homes that are covered by the CARES Act. Please note that the database is not comprehensive. Just because your home isn’t listed, doesn’t mean that the CARES ACT doesn’t apply.

The NLIHC offers updates on COVID-19 housing issues. They also have a page for state housing assistance. Low income households in Austin may qualify for assistance through the Austin Tenant Stabilization Program. Share that program with tenants and landlords to prevent evictions.

Eviction moratoriums do not mean that tenants don’t have to pay rent or late fees.

Tenants and landlords need to work together to find a solution to paying rent during the COVID-19 pandemic. The eviction moratorium is not a rent freeze. When life gets back to normal, tenants will still owe back and current rent or risk eviction.

We wrote that the National Multifamily Housing Council is recommending that its members waive late fees and administrative costs and help residents with payment plans.

It’s going to take everyone working together to keep families stable after the pandemic. We will do our best to keep you updated on any new options and helpful programs.

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