S.H.O.P. Program Helps College Grads Purchase Homes Without Debt
What’s the highest credit score one can receive? 300, 550, 900 or 1276?
What is the maximum one can contribute to a Roth IRA annually? $1000, $3000, $5,500 or $7,000?
What is the payment percentage of down payments? 0-2%, 3-5%, 8-10% or 5-20%?
These are some of the questions the Congressional Black Caucus Foundation is sending representatives to ask students at Historically Black Colleges and Universities for their housing initiative, Student Homeownership Opportunity Program (S.H.O.P.). The program began in February 2003 and seeks to educate college age students about purchasing homes at an early age without getting into “excessive debt” and having poor credit.
According to the website, the objective of the program is to educate young people about the importance of managing money smartly, establishing good credit habits, recognizing the potential hazards of easy credit, and building wealth through homeownership. The program is geared towards graduating seniors at HBCU’s and select community colleges across the country encouraging them to purchase homes within their first three years after graduation.
Some students are concerned, however, that through all the hype, some important facts are being left out that may impact student home ownership.
“I think this is a great idea,” said Anika Seals, a graduating senior from Howard University who hopes to own her own home within the next two years. “I’m just concerned that they are overlooking things such as taxes, finance charges and monthly mortgage insurance that go into getting a mortgage on a house. It’s beneficial if you have all of those things in order, but it may be a double edged sword for those students who haven’t necessarily gotten their finances in order within three years of their graduation.”
The program does include homeownership seminars that focus on financial literacy and preparation, the importance of homeownership, and the process of purchasing a house, but the main focus in the workshops is on credit and making oneself look good on paper. It also offers qualified students a chance to win certificate of $1000 towards the down payment and closing costs of their first home once they have participated in the workshop.
“Really the thousand dollars is extra,” said Floyd Mitchell, a junior marketing major from Howard University who hopes the program is still around next year. “Honestly, it’s a positive program regardless and I think that students should be attending the workshops for free. It’s a good opportunity for students to learn things such as credit and get their finances in order.”
But the CBCF is not doing this program just for the current benefits. Rather, according to the website, they are looking to the future, trying to create patterns of behavior within this target group to effect real change in the African-American homeownership demographic. “The Foundation believes this shift in demographics will improve the overall economic health and well being of young African American individuals and families,” they said.
The program has traveled to 27 universities so far and has plans to attend even more with the help of State Farm Insurance Companies, National Association of Home Builders, ING Foundation and Freddie Mac.