Arrive Home’s Tai Christensen: The House That Built Me
Tai Christensen is President at Arrive Home, a national affordable housing program providing Down Payment Assistance and alternative credit solutions in underserved communities.
Country music star Miranda Lambert sings one of my favorite songs of all time, called “The House That Built Me.” It’s a song about her childhood home, and how it shaped her into the woman she is today. During the second verse, sung with a hint of heartbreak and longing:
“Momma cut out pictures of houses for years
From Better Homes and Garden Magazine
Plans were drawn and concrete poured
Nail by nail and board by board
Daddy gave life to Momma’s dream.”
I had the opportunity to visit my childhood home last summer and the rush of memories and emotion that flooded my soul was a truly magical experience. I had visions of days long since passed: barbecues in my parents’ massive backyard, swimming for hours with my sisters and friends in our pool, my grandparents laughing on our back patio, and hugging my sister goodbye as I left for college. This brick-and-mortar structure gave me more than shelter. It provided a firm foundation — emotional, spiritual and physical — for me to move forward in the world with confidence. This small piece of earth in Southern New Jersey was truly the House That Built Me.
Sadly, for an alarming number of American families, the dream of owning a home is far out of reach as Census Bureau data reveals that homeownership rates fell in 2020 to a low not seen in 50 years. Further, the median price of a single-family home in the U.S. has continued to climb and is now 5.6 times greater than the median household income, according to a study by Harvard’s Joint Center for Housing Studies.
And while one would expect these challenges in high-cost markets like New York City and San Francisco, Pandemic-generated moving trends have meant that even lower-cost markets, where one might expect more reasonable prices, are becoming increasingly unaffordable for low-to-moderate income prospective homebuyers.
But while the situation is dire, it is not irresolvable, and the onus to find a solution rests squarely on the shoulders of the lending community. Millions of would-be borrowers are locked out of homeownership because they cannot qualify for a loan, and the mortgage business has seen its borrower pool spiral as a result. But I believe there is a path forward, and one solution is enabling people to earn equity through an Earned Equity Program. Here’s how it works.
What is Earned Equity?
An earned equity program allows consumers who do not qualify for a traditional mortgage to select a home of their choice and enter into a 40-year homeownership agreement to acquire control of it.
Per the terms of the agreement, the consumer can use and enjoy the home as their own, with the intention of eventually buying or assuming the loan on the property. At any time during the term of the homeownership agreement, the program participant may buy the home at a price that was fixed when the contract was signed. With each monthly payment, the amount owed under the agreement is reduced, similar to a 40-year mortgage.
During the 40-year term, the customer has time to improve their credit rating and eliminate other obstacles preventing them from qualifying for a home, eventually buying the property outright using a traditional mortgage loan.
Innovate for Change
Plagued by high interest rates and deepening affordability issues that are bringing business to devastating lows, the mortgage industry is in a rut. But I don’t think that is all-together a bad thing. Challenging times force us to get creative, they inspire new ideas and innovation. They force us to think outside the box and re-evaluate how we do business. How can we still help prospective borrowers in these conditions? How can we help the significant number of consumers out there who cannot achieve their dream of owning a home?
To me, this is one answer, one solution that will help the industry connect with a broader segment of prospective buyers. But it’s imperative that we continue the conversation about how we as an industry can push for greater innovation — not just because our livelihoods depend on it, but because homeownership is critical to the development of generational wealth. And generational wealth should not be enjoyed by a select few, but accessible to all hard-working American families who want to advance their family’s financial security.
I am blessed to have been born into a family of generational homeowners. I understand the pride of homeownership and the comforting feeling of being able to go back to your family home. We at Arrive Home are committed to expanding opportunities to all credit-worthy individuals who want to become homeowners for themselves and their families. We are proud to play a small role in giving life to the dream of homeownership and in the creation of countless fond memories. As Miranda Lambert proudly sings:
“If I could walk around, I swear I’ll leave
Won’t take nothin’ but a memory
From the house that built me.”
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
