This article first appeared in the St. Louis Beacon, Nov. 21, 2011 - Valerie Rayford and family members built a screened-in summer room outside her Habitat for Humanity home in Hamilton Heights. She says she learned invaluable skills while performing hours of "sweat equity" during the construction of her home.
As Valerie Rayford prepares to spend her 13th holiday season with her family in the home built for them by Habitat for Humanity St. Louis, she acknowledges that holding on to her American Dream has sometimes been a challenge.
But she is adamant about this: Her solidly built three-bedroom ranch home in the Hamilton Heights neighborhood has also been a priceless -- and life-altering -- blessing.
When Rayford, 48, moved into the house in December 1999, it was one of the first Habitat homes to be completed on the street. Rayford, who grew up in south St. Louis, said she wasn't immediately taken by the neighborhood when she and her mother visited the build site for the first time.
"It was kind of rough when I first got here, and it was kind of scary to me," Rayford said. "There was a vacant apartment complex, and this was a different side of town for me. I told by mother, 'Oh, no.' "
But Rayford said her mother advised her to avoid making a hasty decision -- that she should sleep and pray on it.
"I woke up the next morning and called her. I said, 'The house could be on the moon, and I'm going,' " Rayford said, laughing as she recalled the experience.
Seated on a comfy, overstuffed couch in her family room, Rayford was fending off the affections of Stewy, a rescued dachshund, who now makes his home with Rayford, her daughter and grandson. She pointed to the tile floor that she laid herself and the walls she painted as part of the 350 hours of "sweat equity" that Habitat homebuyers and their families are required to perform during the construction of their homes.
It was hard work but worthwhile, Rayford said, because it prepared her to tackle the minor repairs and upkeep that all homebuyers face. She is proud of her home and grateful that she could rear her family here instead of in the cramped one-bedroom apartments she rented before being accepted into the Habitat program.
Rayford, then a single mother of a young son and daughter, said Habitat offered her something she knew she could never get on her own, something that she had grown up knowing as a child and wanted for her children: a home with a front yard, a back yard, privacy -- and a Stewy.
But Habitat homes don't guarantee fairy-tale endings, Rayford said. Despite what she describes as a bargain zero-interest mortgage payment -- about $350 a month -- she has at times struggled to pay it. She said she has never missed or been late on a payment, but she did turn to Habitat for help in 2005 when her battle with breast cancer left her unemployed.
She credits Habitat for helping her to negotiate a six-month forbearance with her lender at a time when the foreclosure crisis was beginning to take hold in the nation.
"I've been blessed," she said, repeating once more a statement she would make several more times during the interview. "I could be homeless. I think about that. So many people end up homeless. I could be homeless. I wouldn't trade this for nothing. I do what I have to do. Work with what I have to work with."
Rayford would like people to know that Habitat homebuyers must work hard to turn opportunity into success.
"People have actually asked me if I got a free house," she said, shaking her head and smiling. "They don't even think we have a mortgage."
Rayford says that Habitat homebuyers confront the same issues that all homeowners face.
"You struggle just like everybody else," she said.
Rayford said she knows several people who either lost their Habitat homes due to unemployment or because they refinanced their original zero-interest mortgages to access the equity in their homes and then couldn't afford the new interest rate and payments.
Habitat offers the American Dream, she said, but the nonprofit can only take homebuyers so far.
"Common sense is supposed to take you even further," she said.
'We Don't Go Away After Passing of the Key'
Kimberly McKinney, CEO of Habitat for Humanity St. Louis, said she enjoys driving through Habitat neighborhoods this time of year to see how families who have been in their homes for a while decorate for the holidays.
Most Habitat homebuyers represent the first generation in their families to own homes, and it takes them a while to adapt to the concept, she said.
"They have been conditioned as renters," McKinney explained. "They sit at the table at [the mortgage] closing and ask permission to paint a room. We tell them, you're going to own your home. Don't do anything to violate building codes, but paint whatever color you want to paint."
And just as adapting is vital for homebuyers, Habitat -- which is celebrating its 25th anniversary in St. Louis -- has also been adapting to meet the changing needs of homeowners and the marketplace, she said.
"We had adopted a goal in 2005 to build 50 houses annually by 2015. Well, the economy looked very different in 2005. So we've had to adjust that. We said, 'Let's stop focusing on the numbers and focus on serving as many families annually as we can possibly afford to serve,' " she said.
The St. Louis chapter of Habitat -- an international nonprofit ecumenical housing ministry -- has built more than 300 homes through the years, together with corporate sponsors, volunteers and families who work side by side at construction sites. In recent years, Habitat has focused on producing energy-efficient and environmentally friendly houses certified by the U.S. Green Building Council.
As Habitat has "grown up," as McKinney puts it, the organization has also expanded its social service programs that prepare buyers for the travails of homeownership. And the organization encourages buyers to keep in touch, particularly when they are dealing with financial struggles that might put their homes at risk.
"Some move in and make payments and we never hear from them unless there is a problem," she said. "We don't go away after the passing of the key."
The nation's economic recession has been a trying time for homeowners, in general, and low-income homeowners in particular, she said. The reality is that Habitat homebuyers have faced their share of unemployment and reduced income -- and a small percentage have lost their homes.
McKinney says fewer than 10 percent of the 300 homes built by the nonprofit over the past quarter century have cycled through default or foreclosure at some point. She said that the foreclosure rate has varied among Habitats across the nation. Some cities fared better while others fared worse in the economic downturn and housing crisis.
"Sadly, the bottom line is that if you can't make a mortgage payment -- or won't make a mortgage payment -- you will lose your house. It may take us longer to get that point, but we're not unlike a traditional lender in that we will eventually get to that point," she said.
Habitat sells most of its mortgages to a third-party lender; the mortgages are discounted because of the zero-interest rate, she said. The lender then services the mortgage, although Habitat will advocate for homeowners who get into temporary mortgage trouble.
"We tell homeowners to communicate with us. There is a difference in a homebuyer saying 'I've lost my job' or 'I am having a medical emergency, and I'm really struggling' versus the one who just doesn't pay and we don't know what's going on," McKinney said.
McKinney said the hardest-hit segment of the economy is comprised of the very people Habitat partners with.
"In any economy the people who feel it the hardest are the people who have the least," she said. "When layoffs are announced, we ask, 'Did we have people working there?' "
McKinney said that during the height of the housing bubble, some lenders specifically targeted Habitat homebuyers to convince them to refinance because the houses are historically worth more than they are sold for. Habitat works diligently to educate buyers about such refinancing schemes.
"It doesn't get any better than a zero-interest mortgage," she said. "Unless you find some lender who is willing to pay you interest on your mortgage payment, it just doesn't any better."
Goal is Long-term Success
Earlier this year Habitat tightened its requirements for homeownership with the goal of ensuring that buyers will not only succeed today but that they will be able to afford their homes five or 10 years from now.
While the tightened requirements shrunk the current applicant pool, McKinney said that Habitat has placed more than 200 prospective buyers into home readiness and credit counseling programs to prepare them for possible selection at a later date.
"Because of the recession, some people think they will not qualify and don't even try," she said. "We are always aggressive seeking home buyers."
According to the new guidelines, income may not include unemployment benefits, food stamps, temporary assistance, temporary employment income and Supplemental Security Income for dependents. Homebuyers must also provide evidence of a stable income and a good credit score --- and be able to make two mortgage payments as a down payment.
Income guidelines vary by family size. To qualify for a Habitat Home, a family of four, for example, must have a minimum income of $22,550 and a maximum of $37,565. Complete income guidelines are available on the Habitat website.
McKinney said that Habitat no longer allows nonpermanent income, such as child support or Supplemental Security Income, to apply to income because children will eventually age out of that income, and it will no longer be available for mortgage payments.
"You have to look at every piece of the puzzle," McKinney said. "If they're income reliant on something that someone will age out of, what happens next? "
As part of its strategy for long-term success, Habitat can go to bat for homebuyers such as Rayford, who face temporary setbacks, McKinney said.
"She had been a model homebuyer and just hit a rough patch. This is a partnership; we don't just go away, McKinney said. "Her proactive communication with us meant we could be the advocate on her behalf. "
A long-term partnership strategy might be part of the lessons learned during the housing collapse, McKinney said.
"While I think that what Habitat provides to our families is a hand up, not a handout, we're going to always be dealing with partner families who don't have an abundance of discretionary income," she said.
Like Rayford, McKinney said she is no longer surprised to find people in the community who believe that Habitat houses are given away free to deserving buyers.
"People still have that misperception. I correct it more than I care to remember," she said. "I am very intentional about using the word homebuyers because they are buying a house. The only difference between them and everybody else out there is it's a zero-interest mortgage, and we are selling the houses for less than it cost us to build them. We're taking a loss on every house -- and that's where the generosity of our corporate, faith-based and individual donors comes into play."
Affordable Housing Now on Radar Screen
In the worst-case scenario of foreclosure, Habitat often works to get the properties back so they can be resold to another family, particularly if the home was a recent build, McKinney said. Habitat also has a right of first refusal on properties during the life of the first mortgage and a shared equity right for 10 years should a home be sold.
"It's a complicated organization," McKinney said. "We're not your traditional nonprofit. We're a homebuilder, and right now we're a large homebuilder given what's going on with the economy. We're one of the largest in the area, but we're doing it as a nonprofit."
Historically, Habitat St. Louis has stuck to its mission of building new homes rather than rehabbing foreclosed properties, although an abundance of them is currently available at below-market prices. McKinney said the nonprofit is considering some rehab opportunities in neighborhoods without any options for new construction, but will approach that alternative carefully.
"At the end of the day, we have to look at it in the context of the houses we typically build -- a house that is 1,200 square feet. We don't go to neighborhoods that don't fit that model," she said.
While a rehabbed home might seem affordable now, a Habitat family might not be able to afford the utility payments on a larger house -- or higher property taxes -- four or five years down the road.
"A home is still the greatest route to material wealth," McKinney said. "If people want to work hard and become a homeowner they deserve that opportunity."
She thinks it is ironic that affordable housing didn't resonate politically -- until the mortgage crisis.
"You heard a lot about education -- and it's important -- but it's hard to educate a child who is moving four times a year," McKinney said. "And you heard about health care, but there are all sorts of health ramifications from living in a substandard environment. Housing should have always been equal to those two, and it never was. So then this big housing bubble burst, and now housing is on everybody's political radar for all the wrong reasons. We went from being the thing nobody talked about to the thing that everybody talks about -- but not from the platform we ever wanted them to."
The Rayford House
In her basement, Valerie Rayford keeps the sign that stood on the site during the construction of her home 12 years ago: The Rayford House.
"My kids helped. And friends and family members pitched in to help with the hours of sweat equity," she said. "Some days it was really hot, and then toward the end, it was getting cold. We found stuff to laugh about. It was fun times. Hard times. Hot times. Cold times."
Rayford, who for a time served on the Habitat board to offer the perspective of a homebuyer, reiterates once more how blessed she is to have this good home. The neighborhood has had its ups and downs, she says. And last summer she made the mistake of paying a repairman who failed to fix her air-conditioner properly. But, then she adds, it turned cooler -- and now the repair can wait until spring.
"You have to be a smart homeowner in order to survive," she says matter-of-factly. "It's not like hitting the lottery."
