AFI Success Story! American Dream Realized in Racine, Wisconsin

Vicky* began saving with the City of Racine Weed & Seed Individual Development Account program in September of 2007. In March, 2009 she closed on a home of her own. “In so many good ways it was such an adventure for me”, she noted.

This was a long way from where Vicky had found herself eleven years ago. She has bipolar disorder and went through some rough times back then, scared and even briefly homeless. Little by little Vicky gained a foothold. First, she got an apartment. She had no furniture, or even eating utensils, but over time things improved. Vicky found a job, purchased some household items, and kept making progress.

Eventually she moved to a subsidized apartment. Vicky’s apartment had a market value rent of $715. She paid $395 which included heat after the subsidy, plus $32 per month for electric.

She lived there for seven years. But it never felt like home to her. There were the routine inspections. Notice was given, but things had to be in order, and if something was five inches from the wall instead of six inches, it had to be moved. Vicky never felt like she could really relax and spread out a sewing project. Conditions in the building got worse. There were drugs, alcohol, prostitution, domestic violence, and cockroaches. Vicky was frightened when she heard someone beating up his girlfriend.

Vicky thought about moving to a different building. Then she saw a flyer in the lobby about the IDA program. “I could never afford a house”, she told her boyfriend. “Sure you can”, he said, being a homeowner himself. Vicky collected her personal information, applied for the IDA program, and was accepted.

She saw that the IDA approach was similar to the one she had used to improve her life; taking things step by step. As soon as she could complete a part of the IDA program, she did so. She took financial and homebuyer training and met her savings goal, with additional savings set aside for earnest money and repairs.

“The classes were so useful”, Vicky commented. “I found out things I could use whether I was buying a home or not; such as keeping an eye on my credit, watching out for predatory lenders, and even the advice from an investment advisor to deposit your tax refund into a retirement account. I felt so safe with the IDA program when I learned that I would not be allowed to buy a home I couldn’t afford or that would need too many repairs. I learned to use a budget. I shared the budget format with my grown kids, and they use it now, too. There were lots of great ideas.”

Vicky began looking at homes late last fall. Her financial situation qualified her to spend up to $50,000. Initially she just looked at homes from the outside. Most of what she saw in her price range didn’t seem suitable.

There were many large older homes with four or five bedrooms. They were not in the best of shape and would be far too large. Other smaller homes seemed to be in need of major upgrades. Many places had foundation problems or water damage, or needed a coat of paint. Vicky kept looking, checking real estate websites every couple of days.

Then she saw a home listed at $53,000, just over her limit. But Vicky wanted a look inside anyhow. When she went in the door, she thought to herself, “This is my home.” It was in the best shape of any she had seen so far. It had a solid foundation, and a couple of contractors who were checking things commented on what a nice home it was.

The housing market continued to undergo substantial changes, sometimes daily. Suddenly, the house Vicky had her eye on was listed at $39,900. She quickly made an offer.

Vicky now has a mortgage payment of principal, interest, taxes and insurance of $251 per month. Her budget utility bill is $134 per month. Her interest rate is 5.125%.

Eager to enjoy yard work, Vicky plans on a vegetable garden. She is painting her rooms soft, warm colors. She’s enjoying the additional space tremendously. She has lots of room for her sewing projects. Vicky will even be riding a bicycle more, now that she has a garage in which to store it.

Vicky felt bad that someone lost the home through foreclosure, but was thrilled to be able to purchase at a price she could afford.

For more information about the City of Racine Weed & Seed IDA Program, contact Tanya Canady via email or by telephone at 262-636-9596 or Mary McIlvaine via email or by telephone at 262-636-9574.

* Vicky’s name has been changed to protect her privacy.

This article originally ran in the IDAresources.org Update Newsletter on 06/25/10 and is available for archival purposes.
For updated information on asset building and the AFI program, please see www.IDAresources.org.