A HOME OF YOUR OWN GUIDE

National Home of Your Own Alliance

A HOME OF YOUR OWN GUIDE

The National Home of Your Own Alliance, established in 1993 at the University of New Hampshire's Institute on Disability, is a national technical assistance center and clearinghouse that focuses on homeownership and control for people with disabilities. The Alliance was created by a five-year cooperative agreement with the United States Department of Health and Human Services Administration on Developmental Disabilities. Twenty-three states receive ongoing support from the Alliance to develop pilot projects of homeownership.

A HOME OF YOUR OWN GUIDE

National Home of Your Own Alliance

Institute on Disability/University Affiliated Program University of New Hampshire 7 Leavitt Lane Durham, NH 03824-3522

TABLE OF CONTENTS

ACKNOWLEDGMENTS

i

PREFACE

ii

INTRODUCTION

iv

CHAPTER ONE: PREPARING FOR HOMEOWNERSHIP

1

Overview

3

Is Homeownership Right for You?

3

Advantages

3

Disadvantages

6

Chart of advantages and disadvantages of homeownership

8

What Will It Take for You to Buy a House?

9

Initial planning

9

Looking at current and future income and expenses

10

The cost of purchasing a home

11

What Types of Assistance Are Available?

15

Down payment and closing cost assistance

15

Renovation and rehabilitation assistance

15

Types of assistance that may be available

16

How Large a Mortgage Will You Qualify For?

17

Your income

17

Your expenses

17

Budget worksheet

17

Worksheet explanation

21

Examples of Joe's worksheets

23

Your credit record

26

How Can You Increase Your Borrowing Power?

28

Identifying need

29

Getting pre-qualified by a lender

29

Blending resources

29

Chart of resources Joe used to purchase his home

30

Trusts

31

Resources others have used

31

Alternative financing mortgages

33

Are You Ready for Homeownership?

36

Questions

36

Checklist

36

Summary

37

A Home of Your Own Guide

National Home of Your Own Alliance

CHAPTER TWO: PLANNING

39

Overview

41

A Person-Centered Approach

42

What is a person-centered approach?

42

Stage 1: Laying the Groundwork

43

Choosing a facilitator

43

Choosing a housing counselor/education provider

44

Deciding who will help

44

Creating personal profiles

44

Stage 2: Meeting With People Who Provide Assistance

50

The initial gathering

50

Subsequent meetings

50

Stage 3: Determining Your Wants and Needs

50

Creating a wish list

50

Stage 4: Turning Thoughts to Actions

57

Opportunities and obstacles

57

Action planning

58

Checklist

60

Summary

60

CHAPTER THREE: HITTING THE STREETS

61

Overview

63

Continuing on the Journey Toward Homeownership

63

Finding a Home

64

How a real estate sales professional can help

65

Comparison shopping

66

Negotiating the Purchase

69

Deciding how much to offer

69

Submitting the offer

71

Terms of the contract

72

The home inspection

73

Negotiating the Final Purchase Price

77

Accessibility issues

77

Reviewing the action plan

78

Checklist

78

Summary

79

A Home of Your Own Guide

National Home of Your Own Alliance

CHAPTER FOUR: OBTAINING A MORTGAGE

Overview Shopping for a loan

Understanding the language Applying for a Loan

The loan application The interview Loan processing Long-range planning Taking advantage of others' experiences Using your team members If your loan application is rejected Report suspected discrimination Have I used all my resources to find the right loan? Action plan Checklist Summary

CHAPTER FIVE: CLOSING

Overview Final review before setting the closing date

Pre-closing meeting Select a settlement agent Complete the title search Purchase title insurance Meet the conditions of the loan approval Obtain a property survey Obtain a termite certificate Establish an escrow account for long-term maintenance Secure probate approval Obtain accounting reports from representative payee Complete all state certifications Obtain commitment letters for funds and assistance services Document PITI reserves Review your long-term assistance plan Set the Closing Date Purchase property insurance Decide whether to have automatic payment for PITI Consider a homeowner's warranty Conduct a final house check Conduct a house tour with the seller Obtain a final estimate of closing costs HUD-1 Settlement Statement Allocation of closing costs Closing: The Big Day! What to expect at the meeting Who can I bring to the closing meeting? Explanation and signing of closing documents Recording the documents

81

83 83 84 87 88 88 90 93 94 95 95 96 97 97 98 98

99

101 101 102 102 102 103 103 103 104 104 104 104 105 105 105 105 106 106 107 107 107 108 109 109 112 114 114 114 114 116

A Home of Your Own Guide

National Home of Your Own Alliance

Getting the keys to your new home!

116

The media

117

Questions

117

Action plan

117

Checklist

118

Summary

118

CHAPTER SIX: LIFE AS A HOMEOWNER

119

Overview

121

A Homeowner at Last

122

Settling in

122

Defining roles for people providing assistance

125

Meeting Your Obligations as a Borrower

127

Understanding the terms of your loan

127

Transfer of servicing

128

Avoiding foreclosure

128

Maintaining Your Home

130

Seasonal inspection checklist

131

Keeping your energy bills at a minimum

131

Do-it-yourself repairs

131

Major repairs and home improvements

132

Household Budgeting

134

Creating a budget

134

Checklist

139

Summary

139

GLOSSARY

141

WORKSHEETS

151

ADDITIONAL RESOURCES

160

PHOTOGRAPHY COURTESY OF: National Home Of Your Own Alliance The Center for Universal Design Kelly Houk

All rights reserved

A Home of Your Own Guide

National Home of Your Own Alliance

ACKNOWLEDGEMENTS

This manual is dedicated to Ron Mace, the pioneers who have successfully purchased their own homes, and to the individuals who have assisted them. Ron Mace, an architect, industrial designer, and visionary, was responsible for the concept of Universal Design. Through their efforts, the dream of homeownership became a reality despite the challenges, attitudes, and financial barriers they faced. Without their vision, persistence, and belief in their dreams, A Home of Your Own Guide would not be possible.

Countless hours of writing, editing, and reviewing were devoted to this manual. We would like to thank the following people who worked tirelessly on its production: Jay Klein, the director of the National Home of Your Own Alliance, for his vision, foresight, and unwavering belief in justice and equality for all people. Jay's contributions of writing and editing are the very heart of this publication.

Kim Frederic-Klein, a consultant to the National Home of Your Own Alliance, who contributed to the writing and editing of this manual. Kim spent long hours late into the night, writing and re-writing sections of the guide. She never complained and never missed a deadline. We appreciate all of her efforts, which are reflected on every page.

Debra Nelson, the director of the Community Options project at the Institute on Disability, who spent hours carefully reviewing and editing this guide, and provided gentle advice and ongoing support.

The staff at the National Home of Your Own Alliance, specifically Dan Vachon, Margaret Caulk, Nancy Hoctor, Clare Sullivan, and Marcie Goldstein.

The creative talent of Kelly Houk enhances this guide. Kelly provided the artistic genius that is reflected in the design throughout the manual. We salute her patience, dedication, and flexibility during the production of this manual.

Last, but not least, our sincerest thanks to the consultants and experts who reviewed the first draft of the manual, including Debbie Berrey from Idaho, Jean Ann McLaughlin from Massachusetts, Edward Alley-Willard from Texas, Cathy Ficker-Terrill from Illinois, Judith Snow from Toronto, Canada, John O'Brien from Georgia, Karen Tamley from Illinois, and Diana Davis from Connecticut. Their insightful feedback and ongoing support were invaluable.

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A Home of Your Own Guide

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