Innovative new program helps first-time homeowners clear hurdles

For the first time in their lives, Chris and Melissa Owens have decorated their own home for the holidays.

And so has another Pittsburg family.

Soon, thanks to a local pastor, a newly formed team that wanted to make a difference, and Pittsburg State University, more families hopefully will follow.

Breaking the cycle

The Owens had always been renters — first in Joplin, where in 2011, an EF-5 tornado picked the roof up off of their house, and then in Pittsburg, where they wondered if they’d ever be able to afford a home of their own.

For a decade, the Owens have worked at Pittsburg High School, where Melissa is a cook in the cafeteria and Chris does a bit of everything, from laundry for athletic teams to transporting students to working in the announcer booth at games.

“They had no problems, they just didn’t have a down payment. They had a car and were paying almost 26 percent interest on it,” said Bishop Walter Simpson, the pastor at Lighthouse Temple Ministries.

Simpson understands the challenges associated with getting a bank loan; in 2008, he needed one for his church. The church qualified on paper with a bank. And then Simpson went to the bank for an in-person visit. He didn’t get the loan.

“It’s difficult,” he said, “when race is involved.”

Simpson talked with local leaders about system barriers, like removing the race category from lending applications.

And, he began brainstorming ways that members of his congregation could become homeowners rather than home renters.

“When people own a home, they don’t move, they don’t leave, they stay and build up a community,” he said. “I needed to find a way to help people get past the down payment, to move from renters to owners, to keep them in our community.”

In return, he said, it would break a bad cycle for those who can never seem to get ahead financially.

In 2020, he found a willing partner in a local business leader who saw the value of his idea.

“The average family net worth for renters is $6,000,” Simpson said, “while the average family net worth for homeowners is $250,000. This is about helping people, but it also makes good economic sense that will benefit the city, the county, the state.”

From his idea of helping people become homeowners, Level Playing Field Homes (LPF) was born.

How it works

Level Playing Field Homes helps do exactly what its name suggests, Simpson said: it levels the playing field by allowing members of the community who may not qualify for home ownership through traditional means to create family wealth.

With the help of financial sponsors, LPF Homes essentially became the bank, with a mortgage agreement signed by the new homeowner at a reasonable interest rate and amortized over an acceptable period of time. If anyone ever skips out, the LPF Homes still has the asset. LPF Homes also helps each participant establish a home equity line to pay off all or a significant portion of their outstanding debt, and to open up funds with which to put new furniture in their home.

In the case of the Owens, chosen by Simpson and LPF Homes as the first participants, doing all of this helped them go from being in the negative about $300 each month to having almost $600 a month left over.

“Financial sponsors, or benefactors, take the risk with the banks and put their credit score on the line for LPF applicants,” Simpson explained. “We are addressing the largest hurdle to home ownership, and that’s the down payment and high interest debt on credit cards, payday loans, cars, and such. We’re showing them how they can afford it by moving money in the right way.”

Then, it goes one step further, and that’s where PSU comes in.

Expertise and resources

“LPF Homes and Bishop Simpson realized the tremendous resources that exist at Pitt State and asked Dr. Scott if the university could help,” said Randy Robinson, executive director of EnterprisePSU.

It's a division of the university that promotes innovation and growth in Southeast Kansas and provides business support services, including the Kansas Small Business Development Center.

Students and faculty in business, marketing, and other related disciplines have gotten involved. Experts were tapped on campus, from those in Kelce College of Business who can provide advice about taxes, to those in the School of Construction who can provide annual walk-throughs to help prevent repairs with things like guttering, or those in the Automotive Technology Department who can do a free vehicle check once a year.

A structure was given to the program so it can be scaled and modeled in other communities.

A Facebook group was started so that participants could network.

Training began in the form of monthly educational events at Block22 for new homeowners: they can learn how to repair credit scores, and how to set and keep a monthly budget including allocating a portion for future repairs.

“We’re not just getting them in their homes; we’re educating them once they get in there so they can continue to be successful,” Simpson said.

“A growing experience”

Melissa said they were given a price range of affordable homes, and the fourth one they looked at they knew was “the one.”

“It’s so scary saying ‘let’s go to the bank and see if we can get approved to buy a house’,” she said. “But from there on out, it was the smoothest process."

They've gotten to know their neighbors, feel as if they’re beginning to put down roots, and this year put up Christmas lights for the first time.

“The people involved in the LPF Homes program have coached us, and it’s been a growing experience, a learning experience."

Now, Simpson and Robinson are encouraging other members of the community — individuals and businesses — to participate and help grow the program. 

"The number one thing we can do is help people who grew up without any financial literacy mentor, who never learned how to make right financial decisions, who have a renter’s mentality. We needed to figure out how to get above that. What’s keeping them down is credit scores and lack of a down payment,” Robinson said. “But those things are solvable. We can help them solve it.”

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