How Housing Stability Programs Can Help Protect Your American Dream

Family of four sitting together at the dinner table.

Millions of households are currently experiencing the financial fallout of the coronavirus pandemic. As our team here at MMI discussed during a recent webinar, that fallout has been especially harsh for low-to-moderate income, Hispanic, and BIPOC individuals. With multiple relief programs set to expire in the second half of 2021, these households will likely experience a new set of burdens, including payment shock as long deferred bills begin hitting their budgets. For homeowners in particular, the possibility of another major financial crisis is very real.

Thankfully, the American Rescue Plan Act of 2021 includes millions of dollars for housing counseling services aimed at those facing housing instability, including potential eviction, default, foreclosure, loss of income, or homelessness. In addition, up to $46.55 billion has been made available to states and local governments to provide financial support to eligible households though emergency rental assistance programs.

For me, each announcement of a new housing stability program hits close to home because a housing stability program changed the trajectory of my own recovery during the Great Recession. If you’re skeptical on the value of housing counseling, or simply unsure if it’s right for you, hopefully my story will help you understand how life-changing these housing stability programs can be.

Finding stability in a crisis

In 2007, I bought a 1930s bungalow at the height of the housing bubble. It was near the outer limits of my budget, given the inflated market at the time, but it was by no means extravagant. I fully financed the purchase and moved in, excited to start my life in a new neighborhood and in a new relationship.

But as life has a way of doing, a curveball was soon thrown my way. Just a year later, I was laid off from my union job at a global financial services company where I had worked for nearly seven years. In a panic, I cut expenses, added roommates, and downgraded my vehicle from a new SUV to a well-used economy car. But it wasn’t enough.

After a brief stint of unemployment, I found a new job, ironically as a financial counselor at a nonprofit called Clearpoint, which later became part of Money Management International. I was grateful to have a job with all the layoffs and downsizing across the country, but my new salary was significantly less than when I had purchased my home. I was one of the millions of Americans experiencing underemployment during a recession.

An Obama-era federal housing stability program was a significant part of my recovery. While I was not behind on my mortgage payments, I was struggling to balance all the financial commitments that come with homeownership. On top of adjusting to the true cost of owning a home, I also had student loans and credit card debt.

The Home Affordable Modification Program (a now-expired program known as HAMP) reduced my loan interest rate and made the monthly payment much more affordable. In addition, annual incentive payments were applied toward the balance over the course of the modification, helping to reduce the principle. I was so grateful that I volunteered to share my story to promote the program and, as a counselor, encouraged my clients to apply.

Now, more than a decade later, I have just sold the home I so desperately tried to keep during the Great Recession and am moving on to the next chapter in life. Thanks to a lot of hard work and a timely housing stability intervention, I was able to protect my credit and make my homeownership a success.

Last fall, I shared my experience once again with Money, in the hopes that it helps others find the encouragement and support they need during the current economic downturn. For those experiencing housing instability, whether due to the pandemic or any other unique situation, you aren’t alone. There are programs available to help you through difficult times. The best way to start is to openly communicate with your lender or landlord and connect with a nonprofit housing counselor right away. Help is just a click or phone call away.

Worried about losing your home? MMI has HUD-certified foreclosure specialists that can help you understand your options and find the best path forward for you and your piece of the American dream.

Tagged in Mortgages and foreclosure, Managing a loss of income

Thomas Nitzsche.

Thomas Nitzsche is Director of Media and Brand at MMI, where he uses his personal experience and professional expertise to create conversations about money and destigmatize debt.

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