DS News

74 I N D U S T R Y I N S I G H T / M I C H A E L H A R R I S The right tools and partnerships are the key to rehabilitating communities from the ground up. TECH+TEAMWORK By most accounts, 2016 was a good year for the housing industry. Property values increased in most communities across the country. e availability of credit increased for many American homebuyers, and interest rates remained low. Some reductions in FHA insurance premiums kept the refi business strong. Lenders across the country benefitted from all of this, and we saw some decent growth last year industrywide. Consumers also shared in this good fortune, with many seeing the equity in their homes increase. Others lowered their monthly mortgage payments with well-timed refinances. Default and foreclosure activity continued to fall, and more Americans now owe less on their home than their property is worth. It's still a seller's market and is expected to be more so this year, as millennials finally start to enter the market and become homebuyers. But things weren't great everywhere. Lenders are still paying historically high costs to originate loans, and borrowers are still wading through a lot of paperwork to close a loan. Short sales are still tough, and disposition of properties subject to government-insured liens is still a difficult business. But overall, most parties in the housing industry did better in 2016, with one notable exception: our lower-income communities. THE COMMUNITY STRUGGLE Not everyone is recovering at the same rate, and many communities, particularly in our larger cities, are having a hard time coming out of the Great Recession. As Maya Brennan pointed out in early January, writing for the John D. and Catherine T. MacArthur Foundation's How Housing Matters program, "Communities with large populations of marginalized groups are particularly vulnerable, as the shortage of decent and affordable homes gives low-income households few options." Traditionally, it has fallen to community- based organizations working in these communities to help the underserved become homeowners. But with fewer properties move-in ready and scant funds available on the part of the organizations or the new homeowners to rehabilitate them, these organizations are struggling. e answer is a new form of partnership that our industry has not seen in the past. LIMITED RESOURCES, LIMITED IMPACT Let's be clear: the work community-based organizations have done in underserved communities has never been easy. ey typically work with very limited funds to help borrowers that most lenders ignore get into homes that most Americans would probably not consider

• Cover