So, there they were –suddenly faced with an opportunity to do something that could make a significant impact in their community with an idea that completely aligns with their organizational mission, core values and slogan “Building Homes, Strengthening Communities.”
The long-term goals are to bring new construction back to the underserved neighborhoods in the city and build enough new homes over the duration of the program in these neighborhoods that will raise property values. Ideally, this could make it economically viable for builders to return to these neighborhoods without third party financial support. In the meantime, LISC and the HBA’s other critical partner, Kalamazoo Neighborhood Housing Services (KNHS), will provide education and financial tools and resources to make it possible to families to buy and keep their new home.
The concept has been named the Kalamazoo Attainable Homes Partnership (KAHP). The high-level view of the program works like this.
• Land Bank lots in sections of the underserved neighborhoods that appear to be best suited for redevelopment are made available to KNHS to purchase using funds and programs from LISC.
• KNHS contracts with HBA member builders who see the value and vision of the KAHP to construct a home with the plans developed by HBA builder members to the established high-quality specs included with the plans.
• LISC provides the construction loan to KNHS to build the homes.
• The HBA coordinates the construction of the homes by working closely with each contracted builder.
• As each KAHP home will be branded as an HBA home, all builders, sub-contractors and suppliers must be HBA members. High level underwriting ‘Champions’ are being sought to support the construction of the home through the HBA.
• No donations of time or materials is expected of those building a KAHP home, although most are working on smaller margins than normal in support of the vision of the KAHP.
• During construction, KNHS helps Kalamazoo residents reach their dream of homeownership through their proven educational programs that help families buy and keep their new home. These constituents are the likely buyers of a KAHP home.
• Homebuyers work with local financial institutions to secure a new home mortgage. LISC provides tools and resources to cover the appraisal gap (the amount between the appraised value of the home and the actual cost of construction).
• At closing the LISC funded construction loan is paid back and made available for the next KAHP home.
So why does this program matter to HBA members and the association itself? For the association, it’s the right thing to do. Their core values and mission demand that they work to make home ownership more accessible. The association sees this as a way to increase top-of-mind awareness in their community.
Building awareness also builds opportunity for all members to grow their business. When the community learns that they can trust and believe in HBA members who are licensed, insured and live by a strict code of ethics, member businesses will grow. Members (builders, sub-contractors and suppliers) will have an opportunity to showcase their craftmanship and demonstrate their support of our community by building a KAHP home. Their story will be told ‘loud and proud’, associating their brand with this impactful project. Requiring all who have a part of building a KAHP home has had the biggest unintended consequence to date –a significant number of new members joining the HBA so they can participate in building a KAHP home.
At the time of this writing, the HBA has four homes underway, with estimated completion between Thanksgiving and Christmas. They’ve just launched their KAHP website at www.hbawmi.com/kahp.Most importantly so far is the undeniable positive response from the neighbors of these homes. At first, they were skeptical, and some actually upset. Once they realized this isn’t the typical ‘affordable housing’ project that comes to mind to long-term residents, they’ve become supporters of the KAHP and actually want to help in any way they can.