Buyer's Readiness Survey
The City of West Palm Beach kicked off its first-time homebuyer's program in December of 1994. Known as the Mayor's Renaissance Fund (MRF), the program was created to provide home ownership opportunities to first-time low/moderate-income homebuyers. The MRF provides first mortgages at reduced interest rates and fees and also supplements the private mortgages with gap second mortgages from city grant funds to make the purchase of the homes more affordable. The program is open to any income-eligible first-time buyer wanting to buy a home within the city limits and it has proven to have enormous appeal in our community.
By the end of the first year, over 350 people had applied. Of the 350 applicants, 13 closed on loans and 15 were actively shopping for a home. Over 275 applicants, however, had serious credit deficiencies, lacked employment histories or sufficient income and/or lacked the personal savings required to participate in the program. Unfortunately, since applicants were processed on a first come, first served basis, the mortgage barriers that the 275 had were not uncovered until many months into the process. The process was lengthy and entailed federal income certification, credit screening and counseling, mortgage pre-qualifying, savings counseling, pre- and post-homebuyers training as well as individualized assistance through purchase contract negotiations and the bank loan application process.
Each of the 275 applicants went through this very detailed process as if they were ready to buy -- when they were not. The 13 applicants who were excellent candidates and ready to buy were held up waiting in line for their turn while staff processed the 275 applicants whose ability to buy was one or two years down the road. From a production standpoint, this did not make sense. While the goal of the MRF is to serve both clientele, it was clear that a more efficient, practical way of doing so had to be found.
The solution to the problem turned out to be a "Buyer's Readiness Survey." This survey asks 10 simple questions related to employment history, credit character and personal savings which are essential to obtaining the private mortgage under the program. The survey takes a matter of minutes for the applicant to complete and less than one hour for staff to review and analyze. Since this technique was implemented, 90 surveys have been received. Of the 90, 20 applicants have been put on the fast track and hopefully will quickly proceed with their purchase. The other 70 applicants have credit, savings or employment barriers. They have been provided with a customized home purchase plan and immediately linked with appropriate services needed so that they can buy a home in the future.
This simple screening technique has had a tremendously positive impact on the program. We now know up front what it used to take us five to six months to find out, and applicants can be fast-tracked through the proper path in the system. Additionally, we have eliminated the lengthy waiting list we had in the first year. Moreover, the survey immediately gives applicants a much clearer picture of their ability to buy a home. They no longer spend months getting their hopes up only to learn they are not ready. Instead, the idle months previously waiting to find out if they qualify are now spent accomplishing those tasks identified in their home purchase plan. The end result is that they can come back through the program and buy a house, and do so at least six to 12 months sooner than before.
Contact: Office of the Mayor, (407) 659-8025
The United States Conference of Mayors
J. Thomas Cochran, Executive Director
Copyright ©1996, U.S. Conference of Mayors, All rights reserved.