Ed Henley was 23 years old and had a student loan when he became a homeowner in Nashville in 2013 with support from the Housing Fund's Shared Equity Program.

Eight years later, Henley still lives in the same house. He said the financial stability offered by his reasonable monthly mortgage payment enabled him to start and grow his own development company in Nashville.

The shared equity program is now entering a second phase funded by a $ 10 million investment from Pinnacle Financial Partners. The money will provide home loans to low and middle income home buyers in Nashville and Middle Tennessee.

"I am living proof of how effective and possible something like this can be for an individual and a family. The ability for The Housing Fund to implement this … (and) the number of home ownership opportunities that could facilitate (investment) could easily run into the hundreds, "said Henley, recently co-chair of the Affordable Housing Task Force Mayor of Nashville was.

The housing fund demands 1% of the purchase price of a house from home buyers. The program pays a 25% down payment and Pinnacle provides a loan for the remaining 74% of the home price, creating a reasonable monthly mortgage payment and allowing buyers to build equity at no additional cost such as mortgage insurance.

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If a program participant decides to sell their home, they must sell to another low to middle income buyer who qualifies for the program. The housing fund pays back its 25% deposit with no interest, and any increase in the value of the home is shared between the homeowner and the housing fund, which reinvest the money back into the program.

"We are ensuring the long-term affordability of these special units and now we are not losing the battle for supply and demand for affordable housing," said Marshall Crawford, President and CEO of The Housing Fund.

The shared equity program has helped 45 individuals and families purchase homes in the Nashville area since its inception in 2011. Crawford said it aims to bring that total to 100 homeowners through the new investment.

The second phase of the program is broader and allows the Housing Fund to review house prices and individuals on a case-by-case basis without restricting choice of location.

While the program is open to anyone meeting their income requirements, Crawford said the Housing Fund hopes more people in communities with historically low home ownership rates – including African American and Latin American residents – can use the program to build wealth.

"I think this is a game changer out there," he said. "I think it could have a big impact."

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Stability through home ownership

Henley owns one of 11 townhouses in the Chestnut Row development, the Housing Fund's first new development with shared equity units. Chestnut Row is still serving as a model for what the program can do, Crawford said, and the developers have shown interest in breaking up some shared equity units into planned subdivisions. But today's hot real estate market requires more flexibility, added Crawford.

"Part of the problem you have in Nashville, in particular, is finding real estate," said Hugh Queener, Pinnacle's chief administrative officer for community investments. "That is the greatest challenge."

Pinnacle and The Housing Fund plan to work with brokers, particularly those serving historically underserved populations, to identify individuals looking for homes that might qualify for the program.

Potential homeowners can identify homes that they want to buy. Pinnacle reviews each customer to ensure that the buyer can afford the home using the program, taking into account the size of the home and the customer's debt to income ratio. The Housing Fund will then review the case: "Is this a low to middle income person, and how do we help that person get their home successfully?" said Crawford.

The participants in the program are "real homeowners," said Queener. You are responsible for paying property taxes, insurance, and property upkeep.

A $ 2 million partnership with Amazon allowed the Housing Fund to offset property tax increases for homeowners in certain zip codes, and Crawford said the organization hopes the program can be expanded to include property taxes for shared equity participants Subsidize the program.

In addition to advice and information, the Housing Fund provides first-time home buyers with the option to only contact the organization again if they decide to sell the property or undertake a major renovation that could drastically change the property's value.

Henley sees the program as a strong, permanent solution that works within the existing system to create affordable housing for multiple families.

"It offers people with cost burdens the opportunity to move to a space where they have stability and hopefully disposable income at a level that enables them to enjoy a higher quality of life, be it saving, investing or starting a business To continue driving Nashville's economic engine, "said Henley.

"When we talk about all the great amenities and amenities we have as a city, now there are people who can enjoy them. Don't just live in Nashville, enjoy life in Nashville."

Reach reporter Cassandra at ckstephenson@tennessean.com or at (731) 694-7261. Follow Cassandra on Twitter at @ CStephenson731.

source https://seapointrealtors.com/2021/07/28/pinnacle-invests-10m-to-support-affordable-homeownership-in-nashville/

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