Presented by Larry Garcia Border Community

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Presented by Larry GarciaBorder Community
Economic Development Summit San Francisco CA

• Serving The UnderservedCommunity Development
  Investment Strategies

l
aso
ffordable
ousing
El Paso Affordable Housing CUSO, 4707 Montana
Ave, Suite 202, El Paso, TX 79903 epaffordablehous
ing_at_sbcglobal.net phone [phone] fax
915-838-8085
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El Paso Affordable Housing Credit Union Service
Organization

• Formed in late 2001 as a credit union initiative
  to serve the underserved, and empower members of
  the El Paso community to realize the American
  dream of family wealth, access to capital, asset
  development, home ownership, and to join
  mainstream America in the level of quality life.

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AHCUSO Partner Owners

• El Paso Area Teachers FCU
• El Paso Employees FCU
• One Source FCU
• First Light FCU
• West Texas Credit Union
• GECU
• Golden Key FCU
• Mountain Star FCU

Members 500,000 Assets 2.5 Billion
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El Paso Demographics

• El Paso County has a population of 800,000 and is
  approximately 82 Hispanic
• Market segment is in lower income percentage of
  US. (Area Household income 29,500 - 6th lowest
  in U.S.)
• 43 or Area Households make less than 25,000 in
  annual income.
• 35 of Area Households receive means-tested
  public assistance or non-cash benefits.
  Recipients are afraid savings will disqualify
  them from assistance.
• There is a 40k-50k shortage of
• Affordable housing stock

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Design and Implementation of AHCUSO programs

• More than an affordable Home loan was needed.
• The Financially Underserved and un-served
  community needed deeper assistance. Families are
  so underserved, that we needed to take a Holistic
  Approach in servicing their financial needs.
• Financial Empowerment for the underserved market
  had to be focused on Family Asset Development
  through Financial Education, Credit Management,
  awareness of, and assistance with, family asset
  development strategies,
  including Savings and
  Home Ownership.

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EL PASO AFFORDABLE HOUSING CUSO

• Promote Wealth Creation Strategies
• Proactive Outreach Financial Education /
  Assessment
• Offer Housing Credit Counseling
• HUD Approved Housing Counseling Agency
• Family Asset Development Strategies
• Promote Savings through El Paso Saves Campaign
  focusing on Emergency Funds IDAs
• Earned Income Tax Credit Campaign
• Avoiding Predatory Practices
• Access To Low Cost Financial Products
• CU Development Of Low Cost Financial Products
• Homeownership

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Asset Development Promote Savings
PARTNERED WITH DIFFERENT ORGANIZATIONS TO
FORM EL PASO SAVES SOCIAL MARKETING CAMPAIGN
TO PROMOTE SAVINGS LOCAL INITIATIVE FOR THE
HISPANIC AMERICA SAVES CAMPAIGN SPONSORED
BY THE CONSUMER FEDERATION OF AMERICA
And Network of Latino Credit Unions
Professionals
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Asset Development EITC Program
Promote Savings using EITC refunds secured by
VITA Free Tax Preparation Program Partner with
VITA site EITC program
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Asset Development EITC

• EITC CTC refunds offer greatest return on
  investment.
• In 2004, Approximately
• 280,000 tax returns filed in El Paso Area.
  208,000 tax returns considered low income.
  110,000 returns claimed EITC CTC.
• 98,000 low income returns did not claim EITC or
  CTC.
• Est. 40,000 qualified families did not claim EITC
  for approximately 80,000,000 and
• Est. 20,000 qualified families did not file CTC
  for
• approximately 20,000,000.
• Potential 100,000,000 annually not coming to the
  low income community and not being used for
  family asset development.

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Asset Development EITC (Results)

• The El Paso Coalition for Family Economic
  Progress was formed and CUSO became managing
  partner for EITC tax preparation coalition.
• (2004, 2005, 2006, 2007 tax years Coalition
  prepared 36,000 tax returns for 45,000,000 in
  refunds)
• Of 35 VITA tax sites, 4 were asset development
  sitesCould open savings accounts for unbanked on
  site.
• Saved families 6,000,000 in tax prep fees
• Serves as referral network for AHCUSO, Credit
  Union Savings Accounts and IDA programs all
  other partner services.-Some sites open Credit
  Union Savings accounts

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Results so far

• 5,400 families counseled for Housing counseling,
  credit counseling, foreclosure prevention, over
  the past 4 years
• Over 450 families placed in homes by AHCUSO
  using program loans, Credit Union loans, or other
  sources.
• 10,800 new savings accounts documented
• Enroll 100 individuals per month to Asset
  Development programs.

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FINANCIAL EDUCATION HOMEOWNERSHIP WORKSHOPS

• FINANCIAL LITERACY HOMEOWNERSHIP WORKSHOPS HELD
• WORKSHOPS HELD IN SPANISH
• TOTAL ENROLLEES TO WORKSHOPS

450 (65) 6200
PROGRAM HOME MORTGAGES

• NUMBER OF CUSO MORTGAGES
• FOR CUSO MORTGAGES MADE
• LEVERAGED AMOUNT

300 17,000,000 25,000,000
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Typical Housing Program Components

• Non-Profit or Govt Partner
• Downpayment Assistance through Grants
• Low LTVcredit enhancement --IDAs
• Layered programs
• 2nd Lien/Community Seconds
• NO PMI
• Variances on Modified First Time Homebuyer
  program
• Medical delinquencies -Non-Medical Delinquencies
• Predatory loans -Length of employment
• EITC used -Alternate Credit
• Higher Debt Ratios -No Credit Score

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EPEZ-AHCUSO LOAN

• 5,000 Down Payment Assistance
• EPEZ 0 Interest Loan Blended 50/50 With
  Conventional Loan Sold To Fannie Mae
• Terms
• 20 Yr Fixed, 3.75 Intr. Rate, 98 CLTV

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EPEZC-AHCUSO LOAN
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EPEZC-AHCUSO LOAN
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TORNILLO COLONIA HOUSING PROGRAM PARTNERS

• Alianza Para el Desarrollo Comunitario
• El Paso Affordable Housing CUSO
• El Paso Empowerment Zone Corp
• El Paso Collaborative
• HUD
• University of TexasEl Paso
• Fannie Mae
• Credit Unions of El Paso

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TORNILLO COLONIA HOUSING PROGRAM

• HUD RHED Grant
• Mission Is To Replace Dilapidated Trailer With
  New Construction To Convert Contract Of Sale To
  Deed
• Homes Energy Efficient
• 20,500 Total Per Family
• 15,000 To Pay Contract Of Sale
• 3,000 For Trailer Removal
• 2,500 For Closing Costs
• Terms 30 Yr Fixed _at_ Mkt Rates, 70-80 LTV
• 1,400 Sqft, 4 Bedroom, 2 Bath

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TORNILLO COLONIAHOME LOAN PROGRAM
Typical Tornillo Housing
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TORNILLO COLONIA HOUSING PROGRAM
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TORNILLO COLONIA HOUSING PROGRAM
Typical Tornillo Housing
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TORNILLO COLONIA HOUSING PROGRAM
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SAN ELIZARIO COLONIA HOUSING PROGRAM
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Section 8 Housing Program Partners

• El Paso Affordable Housing
• Housing Authority of the City of El Paso
• Fannie Mae
• GECU
• Credit Unions of El Paso
• City of El PasoCommunity Development Department
• United Cerebral PalsyHOYO program

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Section 8 Housing Program

• Use Section 8 Homeownership Voucher to income
  qualify family
• Layer with down payment assistance
• Layer with Home of Your Own funds for persons
  with Disabilities (if qualify)
• AHCUSO makes Loan sell to Fannie Mae
• AHCUSO Collects payment from Housing Authority
  combines with borrower payment, then sends PITI
  to servicing Credit Union
• Terms 30 yr fixed, Mkt rates, 80-95 LTV

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Section 8 Home Program to Person with Disability
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Section 8 Home Program to Person with Disability
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HACEP-AHCUSO HOPE VI HOMEOWNERSHIP LOANS
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LEASE PURCHASE HOME LOAN PROGRAM
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LEASE PURCHASE HOME LOAN PROGRAM

• Credit Challenged Families are Income Qualified
  for a Mortgage but placed in a home under a
  lease with an option to assume the loan after 2
  years.
• The lease is for the same amount as the mortgage
  PITI.
• The mortgage is made to non-profit builder at
  market rate with the tenant having the right to
  assume the loan, if they meet certain credit
  goals established at the time of closing and
  increase their credit score to a target amount,
  usually 620.

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CUSO Partner Consumer Loan Programs

• Alternative Payday Loan
• No Credit Check
• Set up as LOC
• 18 Rate APR vs 390-700 APR
• Made 945 loans for 381,000 in 2007
• Avg Loan Amt 403
• Loss Ratio 2 so far

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CUSO Partner Consumer Loan Programs

• Refund Express Loan
• No Credit Check
• Based on Tax refund verified by IRS
• 18 Rate APR vs 390-700 APR
• Made 70 loans for 238,000 in 2008
• Avg Loan Amt 3403
• Avg Total Cost 27
• Loss Ratio so far 0
• Estimated Savings for families 20,000

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CUSO Partner Loan Programs

• Credit Reconstruction Loan
• Example Loan made for 2000 at 9
• 1000 left in interest bearing savings account
• 1000 cash given to borrower
• Loan repaid over 2 years as installment loan to
  build up credit.
• At maturity 1000 left in savings for emergencies

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Asset Development EITC Program
Promote Savings using EITC refunds secured by
VITA Free Tax Preparation Program Developed IDA
in partnership with NCUF, GECU, HHS, City of El
Paso, to use savings funded by EITC refunds and
match those 2000 with 4000.
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CFEP-Coalition for Family Economic Progress
The El Paso Coalition for Family Economic
Progress was formed in 2004 and AHCUSO became
lead partner for this EITC tax preparation
coalition.
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• MISSION
• To empower members of El Paso County
  low-to-moderate income community with the ability
  to develop family wealth, financial self-reliance
  and increase overall quality of life
• by providing and promoting free tax preparation,
  financial education, asset development, credit
  management and affordable housing,
• through a collaborative effort with other
  community stakeholders, government entities, and
  volunteers who recognize the value in family
  economic stability.

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WHO IS THE COALITION?
PARTNERSHIP OF COMMUNITY ORGANIZATIONS

• El Paso Affordable Housing CUSO
• Internal Revenue Service
• AARP
• Ysleta Pueblo Del Sur
• City of El Paso Neighborhood Services
• GECU
• West Texas Credit Union
• Teachers Fed Cr Union
• Project Bravo
• Catholic Church

• YWCA-Central
• El Paso Collaborative
• United Way of El Paso County
• Housing Authority of the City of El Paso
• El Paso Community College
• University of Texas at El Paso Center for Civic
  Engagement
• YMCA-Northeast

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Why is the EITC Important to the El Paso
Community?

• It helps individuals keep working and care for
  themselves and their children by allowing its
  use
• As Seed money to develop family wealth through
  savings, education, or homeownership
• To Pay for reliable transportation
• To Secure convenient child care options
• To Buy food and other basic necessities
• To Keep current on rent and utility payments

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Why is VITA Important? To Avoid Tax Preparation
Fees


90
25
20


300

150
15
Fees are approximate and will vary
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CFEP -EITC CAMPAIGN

• Free electronic tax preparation for low-income
  families (AGI less than 39,783)
• Taxpayers are also provided with information and
  access to asset development programs (home
  ownership, credit building, importance of saving,
  etc.)

• 35 sites opened in El Paso metropolitan area
  (2007)
• Over 80 volunteers, including IRS professionals,
  staff the sites

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Asset Development EITC (Results)

• (2004, 2005, 2006, 2007 tax years Coalition
  prepared 45,000 tax returns for 34,000,000 in
  refunds)
• Of 33 VITA tax sites, 4 were asset development
  sitesCould open savings accounts for unbanked on
  site.
• Est. saving families 10,000,000 in tax prep
  RAL fees
• Serves as referral network for AHCUSO, Credit
  Union Savings Accounts, IDA programs, all other
  partner services.-Some sites open Credit Union
  Savings accounts

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El Paso EITC Coalition Results
Year Sites Tax Returns EITC claimed in Millions Total Refunds In Millions Estimated Savings in Fees
2003 26 5186 2.95 4.4 1,074,000
2004 31 7311 4.0 9.25 1,513,000
2005 31 7755 5.12 10.25 1,605,000
2006 33 8533 5.8 11.21 2,005,000
2007 33 8421 5.55 11.25 1,980,000
2008 35 13000 5.8 11.85 3,770,000