Cedar Rapids homeownership program refocuses after derecho

CEDAR RAPIDS - Hard work and a little help made Rhonda Esser's homeownership dreams a reality.

Esser, 63, rents an apartment in Hiawatha and has been hunting for a house for some time.

After her father died, she inherited his dog, Harlie, a 6-pound Chihuahua, which she said made it even more difficult to find a well-managed rental in her price range. Eventually, the apartment complex where she had lived folded, and she said she was notified she had a month to move out.

'When I was kicked out and only had 30 days to find a place to move, it's like, ‘No, I can't keep this. I want a place of my own,'” Esser said.

A colleague at Transamerica, where Esser works, told her about the Neighborhood Finance Corp., a program designed to spur reinvestment in neighborhoods and revitalize ones on the edge of decline. Large swaths of Cedar Rapids are eligible in the program.

Initially, Esser said her credit score wasn't high enough for the program, so staff provided her with tips to improve it. After a few months, she said she got her credit score up - and higher than it needed to be to participate in the program - so she began to search for a house.

She recently closed on a home in northeast Cedar Rapids. She said the program gave her a mortgage loan financed for about $112,000 and a $10,000 forgivable loan for home improvements provided she stays there for five years.

'In between my hard work and their help, it was a dream come true,” Esser said.

After a turbulent 2020 with the pandemic and especially the Aug. 10 derecho, the Neighborhood Finance Corp. is refocusing to meet homeowners' needs.

Stephanie Murphy, the executive director of the program, which is based in Des Moines and oversees the Cedar Rapids affiliate, said the team fell short of its lending goal for the year to serve 60 people and instead served 39.

Disruption from the pandemic was minimal as interest rates fell and stirred interest among those hoping to make repairs and refinance their loans, Murphy said.

But then the derecho's hurricane-force winds struck Iowa, and people's priorities shifted to more immediate needs such as fixing roofs and navigating insurance policies to make repairs. That paused or completely stopped people who had loans in process.

'We're 99 percent sure that we would have served those 60 if it hadn't been for the derecho,” Murphy said. 'We were definitely on track to meet that goal.”

Staff pivoted to help address community needs after the unprecedented storm. Separate from its typical lending programs, the organization partnered with other area groups for the Linn County PATCH program, which provides a revolving loan fund that homeowners can tap into to make derecho repairs.

While the community continues to recover from the storm, Murphy said staff are confident about reaching this year's target of serving 50 people.

'It's less than what we had planned on for last year, but we feel like it's realistic because it's just going to take some time for people to move beyond addressing those immediate needs and then sort of regrouping and looking at larger projects,” Murphy said.

The effort serves people of all incomes in the lending area, which was expanded last year. A map of this area is available at neighborhoodfinance.org/lending-map/cedar-rapids/.

From January 2019 to January 2021, the program provided 81 repayable and forgivable loans worth nearly $5.7 million. The Cedar Rapids City Council in 2018 agreed to commit $1 million a year for five years to cover the forgivable portion of loans.

Council member Scott Overland, who championed the public-private partnership as it got off the ground in the city, said housing inventory has been low in the local market so prices have gone up. This likely will entice people to sell and, in turn, help the Neighborhood Finance Corp., he said.

Overland anticipates pent-up demand from those looking to buy a house this year.

'We're very confident in 2021, barring anything out of left field, we'll hit our targets this year instead of 2020,” Overland said. 'But the way I look at it is any organization like that that can take a blow that certainly wasn't anticipated, we're going to come out of it stronger than we went into it.”

A better 2021 is on the horizon for Esser, too. Soon, she will fully move into her house with her son, Chris.

It needs some repairs to the roof, chimney, siding and gutters, among other things. But she's excited to move in, and in particular to decorate her living room. She plans to put plants in front of several windows.

And with a yard, her dog will have ample room to run around. She might add another pet to the family now that she has a home of her own.

'The monthly payments that I'm putting into the house is something that I own, instead of just kind of throwing it toward somebody else's mortgage payment,” Esser said.

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