Ohio gives $1M to 11 nonprofits to save homes

The program targets middle-class homeowners.

COLUMBUS (AP) — The state has given an additional $1 million to a group of nonprofit organizations that have been able to keep more than 500 Ohio families in their homes by providing no-interest loans.

The 11 nonprofit groups around the state have targeted low-income and middle class families with loans up to $5,000 as the country’s mortgage foreclosure crisis has worsened amid a slumping economy and downtrodden housing market.

The success of the nonprofits in keeping 515 families in their homes is a bright spot in a state that is one of the hardest hit in terms of the number of homes in foreclosure. But the recipients of the aid are just a tiny percentage of those facing foreclosure.

The amount of time it took to help the 515 families — about two years — shows there is still a long time to go before the state and country gets out of the crisis, said Lou Tisler, executive director of Neighborhood Housing Services of Greater Cleveland.

“This definitely is not a silver bullet,” Tisler said. “It’s going to take a lot more tools in the toolbox, and more than just a rescue fund.”

Tisler’s organization is one of the 11 nonprofits that make up the Neighborworks Ohio Foreclosure Prevention Initiative. The nonprofits are dispensing state funds from two different sources, one targeting homeowners whose incomes are 65 percent or below that of the median of their communities, and the other for homeowners whose incomes are between 65 percent and 115 percent of the median.

The state, through the Office of Housing and Community Partnerships in the Ohio Department of Development, has just given an additional $1 million to the program targeting the low-income homeowners, which generally gives $3,000 loans. That program has saved 400 homes with $1.5 million in previous state funding since it began in 2006.

The program targeting middle-class homeowners, through the Ohio Housing Finance Agency, is in the second year of a three-year, $3.1 million state funding stream. Less known than its counterpart targeting low-income homeowners, the program has saved 115 homes since it began in 2007 by providing loans up to $5,000.

Tisler said low-income homeowners are more aware of assistance programs than those in the middle class, which has also been hit hard by the foreclosure crisis.

“They are, one, not accustomed to asking for help, and two, they don’t know help is available,” he said.

“The first thing they do is take out cash advances or exhaust their 401k before calling for help. They should call for help first.”

Karla Washington, a middle-class homeowner in Richmond Heights, saw her mortgage lender go bankrupt last year.

Her loan was sold to a new servicer, and her mortgage rate began adjusting every six months. Foreclosure hearings on her blue, two-story home in the quiet Cleveland suburb began in January.

“I felt angry and frustrated because even though you try to talk to the lender, it seems like you are always one step behind,” Washington said.

“They kept telling me, ‘You can’t.’ That just made me more and more determined to keep my house.”

She tried various avenues for help before finding out about the Neighborworks program through the office of U.S. Rep. Stephanie Tubbs Jones of Cleveland.

She received $1,800 from Tisler’s organization to put toward a loan modification payment, which enabled her to lock in her mortgage rate at 5 percent for 27 years.