In San Antonio, CU-Backed Housing Keeps Growing

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When the San Antonio Alternative Housing Corporation purchased a 23-acre site for a new housing development, little did it know it would become such a hot commodity. Two months after sealing the deal, Toyota announced plans to open up shop nearby with a major manufacturing plant.

"We had two or three offers to purchase the property at three and four times its value," said Rod Radle, executive director of SAAHC. "Our board said no."

At least 133 families will be grateful they did. For the fourth time since 1996, SAAHC and San Antonio FCU (SACU) have teamed to create a community that provides wealth-building opportunities through homeownership to low- and moderate-income families.

Like the three developments before it, it will offer all the amenities of a well-manicured community and the necessary financial tools to help the new owners become financially stable.

But, unlike the previous, quaint communities of 24 to 36 homes, the new Palo Alto Affordable Subdivision is much grander with lots for 133 families.

"We figured that if we are going to take the time to do it from scratch, doing it on a larger scale would be much more sufficient," Radle said. "Whether it's 24 houses or 133 houses, you still have to do a lot of the same things in the same way and the same manner."

It certainly helps, he said, that the previous developments have had nary a single foreclosure. "We did have one home returned to us, but instead of a foreclosure that would have destroyed the family's credit record, we let them give us the house back." The family was moved into a nearby rental and the home was renovated for a new family.

"We identified the right people and have taken chances on the right people," said Charles Smith, first VP of lending and senior credit officer.

SAAHC develops the communities with financial assistance from financial institutions. For this particular development, Frost Bank, CHRISTUS Foundation, the City of San Antonio and Bexar County are providing infrastructure funds. SACU is a major lender for the subdivision. Countrywide, JP Morgan Chase and Bank of America will participate future financing.

SAAHC and SACU said teamwork with everything from finding affordable land and building the homes to providing the funding and teaching the financial education classes has made their unique communities work.

"Our role is really pretty easy," Smith said. "We've got the money and we've got the services to assist with the loans. Rod really does all the hard work. He does the pre-qualification and the home ownership counseling...We're just a happy participant."

Radle, in turn, called SACU a "trendsetter" in working with clients. Since the two became partners with the first subdivision, the $341.8-billion SACU has provided more than 200 families in excess of $10 million in loans.

To qualify for one of these two- and three-bedroom properties-some with their own white picket fences-applicants must go through the SAAHC's People Helping People Program," which includes seven weeks of financial training.

"Folks come in and fill out a two-page questionnaire asking about employment history, family size and income," Radle said. "Then, during the initial meeting, we talk about what their needs are."

Because many typically do not have good credit, they are evaluated via non-traditional means such as bill payment histories-even if the payer has only used cash. From those indicators comes a credit score that determines their eligibility for either the seven-week financial training course or one-on-one remediation to bring them up to par. He said 80% are below the average median income range, making it impossible under other circumstances to qualify for home ownership.

The latest round of homes range in price from $65,000 to $84,000. Comparatively, the average home price in San Antonio sells for about $114,000. As the homes go up, buyers can choose everything from lot location within the subdivision to floor finishes, paint colors and whether they want a garage or an additional room. "The smaller homes are 787 square feet up to 1,066 square feet," Radle said. "Our largest is 1,250 square feet."

These "green builder certified" homes have standard features, and some offer vaulted ceilings, wood shelving in the closets and window seats.

Radle said all of the Palo Alto homes would be wheelchair accessible and include double paned windows, brick and hardy plank.

And homeowners there will qualify for special mortgage financing under the Smart Commute initiative, which includes public transportation incentives. This partnership with Fannie Mae and the VIA Metropolitan Agency gives homeowners a $250 credit for having their home within a quarter of a mile of a bus stop. In addition, one member of each household gets a free one-year bus pass, preventing the need for a vehicle.

A contract between the two agencies provides a safety net on the CU's investment by allowing SAAHC to take a role in intervening in delinquencies. "We are here to meet the needs of the community and not to satisfy the quotas for affordable housing," Radle said.

Radle, who is already working on plans for a 60-unit subdivision in one of San Antonio's poorest neighborhoods, is not discouraged.

"Based on who I am, I am frustrated that we can't perform faster," he said. "There are a number of families that need quality and affordable housing. As it stands, we're cranking out 50 (homes) a year. We need more than that."

Radle and Smith said they would like to encourage other credit unions and non-profits to be "wild and crazy." "It's worth it," Radle said.

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The backers of the San Antonio housing effort say, "We are willing to go anywhere and meet with anyone who's interested in seeing how this works." For info: Rod Radle at 210-258-1492.

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