After the birth of her twin daughters, Elizabeth and Victoria, 12 years ago, Elena “Elle” Borneman promised them a home that they could call their own-though she didn’t know how or when she would be able to deliver. Motherhood forced Borneman, then a 19-year-old college freshman at Santa Fe Community College in Gainesville, Florida, to delay her education for full-time employment. Without a college degree or support from her parents, she struggled to pay her rent and keep food on the table. But Borneman was determined to leave a financial legacy for her children and grandchildren, and she was optimistic that one day her dream would come true. So, when Earl G. Graves Sr., chairman and publisher of black enterprise, told her on a conference call that she was the 2007 winner of the Own Your First Home Contest and would receive $10,000 toward the down payment on her first home, she exploded with excitement.
“I screamed. I was pacing my apartment. I was jumping and I was crying,” Borneman recalls. “I thought about how far I had come. When he said I was the winner, that feeling was like having everything come together in my life.”
After the call, Borneman raced to her daughters’ school to break the news. While Victoria broke down in tears, Elizabeth was elated at the idea of having her own room and plenty of space to spend time together as a family. “My mom is always trying to give to other people all the time and it was just great that it was actually our turn to get something,” says Elizabeth.
Victoria, who is five minutes older than her sister, says homeownership meant finally having an opportunity to put down roots. “My mom was always moving around a lot so when she told me [that she won the contest] I felt like I was on top of the world,” she says. “I was crying and laughing and smiling all at the same time because we had some place to call ours and we didn’t have to move around anymore.”
Borneman, 31, was chosen as the contest winner from more than 1,000 applicants. And on Nov. 30, 2007, she used her prize money, along with a $15,000 loan from the city of Clearwater, Florida, to help her close on the purchase of her $140,000, three-bedroom, three-bathroom, tri-level townhouse complete with a deck and sizable backyard.Borneman’s road to homeownership has been long-and paved with obstacles that may have broken those less driven. But through planning, exercising patience, financial discipline, and an unshakable determination to achieve her piece of the American dream, she has given her daughters a permanent place of their own-and a foundation upon which to build wealth for future generations.
Becoming Buyer-Ready
Purchasing a home requires a level of preparedness that many first-time home buyers struggle to achieve. As a director of various homeownership programs for the past five years, Borneman has educated legions of potential home buyers. So once she decided to begin the process, knowing how to navigate its tough terrain was not particularly difficult for the Florida native. Getting past life’s challenges to make her buyer-ready, however, proved a bit more daunting. “Homeownership was something that I always felt was achievable, and I believe that my path professionally truly set me up for this moment,” says Borneman, a former homeownership center manager for Clearwater Neighborhood Housing Services Inc., a NeighborWorks organization (www.nw.org) that provides home buyer education, financial assistance programs, and wealth-building classes. “As things happen in life, you face different challenges that you don’t expect and it goes from a survival situation to stability and then investing.”
For starters, Borneman didn’t anticipate that her parents would pull their financial and emotional support after she decided to forgo an academic college scholarship in favor of having her twins-but they did. (She has since mended fences with her parents.) On her own, Borneman moved to Washington, D.C., in 1997. There she worked by day as a receptionist, executive assistant, and accounts payable clerk for an engineering firm making $400 a week. By night she managed a small apartment building in a southeast
D.C. housing project in exchange for a discount on her rent. “Because I was managing the building my rent was only $575 a month, but all we had was carpet, a pillow, our clothes, and a blanket,” she says. “I remember turning on the oven so I could get heat into the apartment. I was in a rough area and scared out of my mind.”Borneman has also attended college part time thoughout the years and is about a year and a half from earning her bachelor’s degree.
Thoughts of a better life kept Borneman motivated and moving from one job to the next. With each new position came more money and a better apartment. Over the next five years Borneman bounced from Washington, D.C., to Maryland to Virginia. By 2002 she had moved back to Florida, where she made $600 a week working for a NeighborWorks organization in Gainesville. Borneman says she couldn’t have asked for a better job. Thoughts of homeownership still weighed heavily on her mind, so while she helped others position themselves for homeownership she also began preparing herself.
When Borneman began getting ready, she was $25,000 in debt-including $10,000 in student loans and several thousand on credit cards. Her credit score was around 500 and she had virtually no savings. In fact, Borneman says she had to use her 401(k) to pay off some of her debt.
One important step was that Borneman spent time disputing inaccuracies on her credit report. “For example, I had health insurance when the twins were born, but the hospital didn’t apply both authorization codes to each child, so on my credit report it said that I owed $3,000,” she says.
All told, Borneman spent five years eliminating all of her bad debt and was able to raise her credit score above 600. By March 2007 she had also established a solid work history with NeighborWorks, having been recruited to its Clearwater organization, and was making nearly $60,000 a year. But she was paying $1,415 a month, plus utilities, to rent a three-bedroom, two-bathroom condo that was 45 minutes from her job. This left little to no room for savings.
“Like most people she had the attitude of ‘I don’t want to rent anymore,’ says Teresa Cintron, an assistant vice president at Bank of America and board member for Clearwater Neighborhood Housing Services. “So, when she called me we put her on a buyer-ready application which allows an underwriter to review an application and give us conditions for approval before the property is found. Then I contacted one of the realtors I work with [and we had a] conference [with] Elle on the phone,” Cintron says.
Borneman prequalified for an $180,000 mortgage loan through Bank of America. With a loan commitment letter in hand, she began her house hunt, touring eight houses in a single day. Borneman knew exactly what she wanted: separate bedrooms for the girls; plenty of outdoor space for them to run around; and a location that would put her closer to her job, shopping, and other attractions. But Borneman also wanted a mortgage payment that she was confident she could handle. She says some home buyers fail to do all the math-forgetting to factor in expenses such as insurance, taxes, utilities, and maintenance-and end up borrowing more than they can afford. So, although she prequalified for $180,000, she looked for houses that cost about $40,000 less and made an offer $5,000 below the $145,000 asking price. Within three hours her offer was accepted.
Pooling Your Resources
The clock was ticking. Borneman had qualified for a mortgage and found a house. But, she still needed money for the down payment.
While first-time home buyers naturally have a range of financial concerns, Cintron advises checking with a Housing and Urban Develop
ment certified counseling agency in your area to see what first-time home buyer programs are available. “There are many different programs, whether it’s 100% financing or down payment assistance,” she says. Also, check with your local municipality to inquire about housing loans and other down payment assistance.
Borneman had been notified that she was a finalist in our contest. But with
no savings and no guarantee that she would win the contest, she filled out an application with the city of Clearwater for down payment assistance. She applied for a program that required mortgage approval for the buyer, a house located within Clearwater, and a purchase price of less than $180,000. One other wrinkle: The program required that the median income for a family of three not exceed $57,800. At first glance, Borneman got a little nervous. Luckily, her annual salary of about $57,000 put her right under the income threshold, and she was approved for a $15,000, 30-year deferred Federal Housing Administration loan at a fixed-rate of 6.5%.“With the $15,000 down payment assistance that I got, and the $10,000 [from the contest], that gave me $25,000 to put down, so I only had to finance $118,000 at 6.5% for 30 years, making my payment $1,175 every month,” Borneman explains. “Had I not gotten the $10,000 I would be paying more like $1,400 or $1,500 a month.”
Building a Future
Borneman and her daughters are steadily making their house a home. Elizabeth has painted her bedroom yellow and white, and has sheets and a comforter to match. Victoria, who is partial to pink, has her favorite color plastered everywhere from the flowers on the wall to the canopy above her bed. To help build equity in her 1985 home, Borneman plans to renovate the kitchen, install hardwood floors, screen in the deck, landscape the front and backyard, and replace the front door. Sounds like a long to-do list for a single mother of two, but Borneman is up for the challenge.
As for advice, Borneman says prospective home buyers should first be certain that homeownership is what they really want. Next, develop a plan and put it on paper. Also, take a home buyer education class and see what type of first-time home buyer programs are available in your area.
“Buying a home is not just about homeownership. It’s so much more,” she says. “It’s security. It’s family. It’s wealth. It’s success.”