Habitat for Humanity Treads Fine Line to Keep Poor in Houses

Habitat for Humanity installed the Tolbert family in a brand-new, three-bedroom house in West Palm Beach, Fla.--a dream house they expected to own someday.

It’s not working out that way.

Not that Habitat--the organization that marshals presidents and plebeians to build houses for the poor--didn’t try to make it work. It tried, and the Tolberts tried, but sometimes trying isn’t enough, even for a group that specializes in happy endings.

Dorothy and John Tolbert and their four kids were wedged into a one-bedroom apartment when Habitat came to their rescue in 1989. The new house was rented to the Tolberts with the expectation that they would someday take title to it.

But over the years, the family grew until the Tolberts had 10 children, with another due in March. At the same time, the couple fell behind in their $350-a-month rent, until they owed thousands of dollars.

Homeownership--Habitat’s shining ideal--was out of the question. But so was eviction. “We’re just not going to put a family with 10 children out on the street,” said Kenneth Weda, the local Habitat director.

So Habitat lowered the Tolberts’ rent to $150, and reluctantly took on the responsibility of permanent landlord.

In just 20 years, Habitat for Humanity has become a benevolent fixture. It has built 50,000 houses in 47 countries--13,685 in the United States.

Turn on a television and you’ll probably see Jimmy and Rosalynn Carter, Newt Gingrich, Reba McIntyre--even Bill Clinton and Al Gore--donning hard hats to help build Habitat houses.

Habitat provides the house, simple but solid, and an interest-free mortgage. But that’s the easiest--and most popular--part of Habitat’s job. Its little-known struggle is deciding how far to stretch the bounds of compassion to help families keep those houses.

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Among the many statistics that make Habitat so appealing as a charity is this one: Only 0.8% of Habitat’s U.S. homeowners default.

One secret behind that number is Habitat’s practice of sticking by families for months--even years--after they’ve fallen behind. Habitat tolerates failure as long as families show a willingness to improve.

Another secret is that in many cases, families remain renters until Habitat decides they are ready for ownership.

It’s known as the economics of Jesus.

“This is not charity. We like to say that all we give to low-income families is an opportunity . . . [but] you would never want to throw people out in the street who are trying,” said Millard Fuller, the lanky, 61-year-old former millionaire who founded Habitat 20 years ago in rural Americus, Ga.

When families in a much-ballyhooed Habitat project on the West Side of Chicago repeatedly failed to make their payments--and one became verbally abusive--Fuller demanded that the local Habitat chapter not evict them.

“My response was: I don’t care if she spit in your face and cursed you--you don’t throw a single mother in the snow with her children in January,” said Fuller, still agitated.

Eventually, though, Habitat surrendered and dropped the project. The townhouses--awash in sewage, graffiti and vandalism--were sold to another developer.

The Tolberts of West Palm Beach are not that kind of problem. In fact, they haven’t missed a payment since it was lowered to $150, and John, a custodian, is training to become a truck driver, a job that should double his $7.80-an-hour pay.

“We didn’t take Habitat for granted,” the 33-year-old Dorothy Tolbert said. “I don’t go around abusing people’s help.”

The handbook sent to Habitat’s 1,314 U.S. chapters recommends that they begin foreclosure when homeowners fall three months behind. But few of its chapters follow the book, and some are unaware that Habitat even has a delinquency policy.

“Well, I guess we’re in violation of that one,” Los Angeles Habitat Director Barry Witmer said when a reporter spotted the policy in his handbook. “Thanks for finding that.”

Seven of Los Angeles’ 35 Habitat homeowners--or 20%--were behind in their mortgages in November, including two who were at least six months behind because they had been laid off.

Habitat said 11% of its U.S. families were behind in payments in 1993, the last year Habitat took a survey. A spot check of 20 large and small chapters across the country in November and December showed 15% to 25% of families at each were behind.

The number changes month to month because poor families have little financial cushion to weather setbacks, and frequently fall behind.

“If we did it all by the book--no exceptions, no more than two late payments--we’d foreclose on half of our homeowners,” said Larry Arney, director of Habitat in Atlanta, the largest U.S. chapter with 350 families.

Instead of foreclosing, Habitat typically customizes a new budget plan. Habitat will let families catch up over a period of time, toss missed payments onto the end of the mortgage, or lower the monthly payment and extend the length of the mortgage.

If none of this works, Habitat has other ways to avoid foreclosure. Families may voluntarily return their houses to Habitat, or find outside financing to pay them off.

The key to handling delinquency, Habitat leaders said, is establishing late-payment rules before emotional attachments to families prevent them from being able to draw the line.

Strong ties to the Figueroa family in Hammond, Ind., kept Habitat from taking serious action for more than a year after trouble began.

The family of eight had faithfully paid a $250 mortgage on its four-bedroom house for five years, then stopped paying completely in 1994 when Robert and Rebecca Figueroa divorced and he moved out. A few months later, Rebecca Figueroa became so intimidated by her teenagers’ gang activity that she moved out and let them take over the house. Habitat’s phone calls and letters went unanswered.

Not until two of the Figueroa boys were hit by gunfire at the house in a drive-by gang shooting in 1995 did Habitat begin foreclosure. The kids eventually just abandoned the house. Habitat found graffiti on the walls, dog feces on the floors and beer bottles everywhere.

“We loved them and did everything to make excuses for them,” said the Rev. Richard Rogers, former president of Northwest Indiana Habitat. “We didn’t want to believe what was happening because they represented a dream of ours.”

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In return for a house and an interest-free mortgage, families must agree not only to make monthly payments, but to become an active member of Habitat.

The local chapters have committees that screen applicants for Habitat houses: What is their situation? Can they be counted on to pay the rent or mortgage? To work with Habitat as partners in improving their lives?

Then Habitat tries to help for at least a year after families move in.

Chapters assign chores, appoint liaisons to befriend families and offer advice during tough times. Some conduct inspections to see if families are caring properly for their houses. Others hold ice-cream socials and holiday get-togethers for families.

More sophisticated chapters hold classes for homeowners on topics such as budgeting and home maintenance.

In Orlando, Fla., homeowners are required to attend classes for two hours a week for 20 weeks. Most important is the self-esteem class, said Orlando Habitat’s Mariana Loboguerrero, because it rids homeowners of “that victim mentality.”

The Habitat in Owensboro, Ky., is too small to offer classes, but it found a professional money manager willing to counsel Habitat families; each family pays a one-time fee of $25 for three years’ help.

When a Charlotte homeowner became addicted to drugs, Habitat found a donor to foot the bill for drug treatment.

Habitat believes “family nurturing” is crucial.

“The kinds of people who move into a Habitat house quite often have never dealt with success or obligations or duties,” former President Carter said. “You can’t just put them in a new house and walk off.”

But there is little consensus among chapters on how hard families should work before they move in, how long families should have to wait to become homeowners, or how far families should let Habitat pry into their personal lives.

Also, the level of help homeowners receive varies dramatically from city to city. Habitat leaders warn chapters not to overdo good deeds.

“This is about partnership, not paternalism. That’s a hard one for a lot of us to swallow,” Evie Kooistra of the Habitat Upper Midwest regional office in Sioux Falls, S.D., told Habitat leaders during a recent workshop.

Some families like having a close relationship with Habitat or would like even more support; others find it patronizing.

Habitat homeowner Sue McCoy of Charlotte, N.C., who moved into her three-bedroom house in 1989, said budgeting classes taught her to resist the offers of credit and loans that flood her mailbox. “When that stuff comes, I just throw it in the trash,” she said. “Ain’t nobody going to take this house away from me.”

Homeowner Michelle Miller of Atlanta, a 30-year-old divorced mother of two who moved into a house that Bill Clinton and Al Gore helped build in 1992, said Habitat threw her a lifeline for a year, then told her to swim on her own. She wasn’t ready.

Three years later, Miller still relies on hefty donations from her parents each month to make ends meet. And she has little confidence in handling typical homeowner headaches, such as a mix-up in her water bill that has cost her hundreds of dollars.

“It’s good and dandy that they give us these houses that we never would have had unless we won the lottery,” she said. “But they have to help us for more than a year.”

Former Habitat homeowner Fayth Graham of Buffalo, N.Y., a 41-year-old divorced mother of five who was evicted in 1995, feels just the opposite. She said Habitat became intrusive when she fell behind in payments.

Habitat made numerous visits to Graham’s house, questioned how she reared her children and suggested she seek psychiatric counseling. Habitat refused to deed the house to Graham for four years, then tossed her out when she cut off contact.

“I’ve always taken charge of my own life,” she said. “I didn’t need them to come out from the suburbs and tell me what I’m doing wrong.”

Buffalo Habitat leader Jean Wood said Graham might have avoided eviction “if she had just been willing to receive the hand that was extended to her.”

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One reason Habitat is so willing to help families with finances and personal problems is because it has so little power over another obstacle they face: their surroundings.

Affordable land is scarce and money is tight, and that often means Habitat families must settle in neighborhoods that are hostile to Habitat or downright dangerous.

President Carter and a host of celebrities drew much publicity to Habitat’s building project in the Watts neighborhood of Los Angeles in 1995, then left the Habitat families to deal with the gangs, drugs and a neighborhood synonymous with race riots.

About a third of the 21 Habitat homeowners in Watts had their homes burglarized within a year after moving in. Gang members stole homeowner Toni Miller’s pit bull while her teenage son was walking him. Twice, speeding cars have crashed into frontyard fences.

Some of the families said they will not stay long in Watts because they fear the pressure from the local gangs will prove too strong for their children to resist.

But several echoed the feelings of Miller, a 38-year-old divorced mother of three.

“This would not have been my first choice of neighborhoods, but the opportunity was here,” said Miller, sitting on the slipcovered couch in her immaculate three-bedroom house.

“I am a homeowner now. No one can take this away. It’s phenomenal.”

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Habitat by the Numbers

A glance at the Christian home-building group Habitat for Humanity:

Founded: 1976 in Americus, Ga., by Millard Fuller.

Homes completed worldwide: 50,000.

Homes completed in the United States: 13,685.

Habitat chapters in the United States: 1,314 in 50 states.

Habitat chapters outside the United States: 250 in 47 countries.

Total donations and house payments collected in 1995: $58.3 million.

Rank among U.S. home builders in 1995 (by Builder Magazine): 20th largest.

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The average Habitat house:

* 1,000 square feet.

* One story, three bedrooms, one bath, kitchen with stove and refrigerator, dining room, living room, front porch, modest carpeting, pastel vinyl siding. Some chapters add extras such as air conditioning or extra square footage.

* Some homes are spread throughout a neighborhood; others are built in clusters of 10 or more.

* Average cost is $37,898. Maine has the lowest average cost at $12,711. Nevada has the highest: $61,250. House prices are determined by the cost of the land and the cost of construction materials that aren’t donated. The labor is volunteer.

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Habitat families:

* About a third of homeowners are single mothers.

* About 55% of Habitat residents are under 18.

* About 56% of homeowners are black; 28% are white; 12% are Hispanic; fewer than 1% are Asian; fewer than 1% are American Indian.

* Most homeowners earn less than 50% of their city’s median income. For example, Atlanta’s median income is $48,500, but most Habitat homeowners earn less than $24,250.

Source: Habitat for Humanity / Associated Press