A roof over their heads, but much hardship beneath it

from The Fort Worth Star Telegram

With an annual income of about $27,600, Terri Rushing knows how difficult it can be to keep a roof over her family's head.

Four years ago, the Grapevine mom was certain that she and her three children were destined to live out of the family's rickety old van. She was running out of money to pay for the family's room at an extended-stay motel, and she had already lived with her brother for a few months. She sought help from the Fort Worth Housing Authority only to be told that there was a four-year waiting list.

Her church at the time couldn't offer her support. And she didn't qualify for a 24-month transitional-housing program for victims of domestic violence.

"It was so emotional and hard for me that when I think back on those times I feel tired and stressed, like I'm in it again," Rushing said. "I realize what I could have lost had things gone differently."

Housing officials say families should spend no more than 30 percent of their income on housing. But that goal is out of reach for many working poor families.

In Tarrant County, the fair market rent for a two-bedroom apartment is $745, so meeting the 30 percent threshold would require an annual household income of at least $29,800, according to the National Low Income Housing Coalition.

The share of renter households paying more than 30 percent of their income on housing grew from 34 percent to 40 percent between 1980 and 2000, to as much as 49 percent by 2005, according to "The State of the Nation's Housing," a 2007 report released by the Joint Center for Housing Studies at Harvard University. The number of American households spending more than half their incomes on housing is also rising rapidly, according to the study.

Rushing found assistance after her manager at the Embassy Suites where she worked told her about the Grapevine Relief and Community Exchange, or GRACE. The nonprofit relief agency provides food, clothing and financial assistance for low-income families.

Expecting another dead end, Rushing had begun to plan where she would park the van for the night and where the family could shower in the morning. But she heard the words "I think we're going to be able to help you" during the interview at GRACE. She still gets choked up when she recalls hearing the "magical" phrase.

Rushing filled out a Grapevine Public Housing application and was placed on the waiting list. GRACE paid for the family to live in an apartment for two years as part of a transitional-housing program.

Four months before her lease was up, Grapevine public housing had an opening. She has lived there with her kids for more than a year and pays $465 a month. With gas, electricity and rent, Rushing sometimes pays as much as $700 every month. She has had her electricity shut off several times for late payments.

Rushing plans to stay as long as she needs to.

"They charge you rent based on how much you make," she said. "I have been on the move so much that you have no idea how much stress this takes off me."

Federal subsidies

There are 4.4 million housing units in the nation that are being used to assist working poor families through Housing and Urban Development programs, such as Section 8 rental assistance and public housing, according to the Fort Worth regional HUD office.

At some point, working poor families have to put the cost of housing over other expenses, including the health of their children, said Peter Dreier, a board member with the National Housing Institute, a nonprofit group that studies affordable-housing issues.

"Most families pay the rent first because they have to have a roof over their head," he said. "That means their kids' health suffers, their transportation to get to work suffers, and other parts of their life suffer."

Bobby and Edwina Lockwood are among the families relying on HUD assistance.

After being in the Arlington Life Shelter's housing assistance program for two years, they enrolled in the Arlington Housing Authority's Housing Choice Voucher Program. Their three-bedroom home in southwest Arlington normally rents for about $1,000 a month, but they pay $557. The rental assistance program pays the balance of a negotiated rate.

The Arlington voucher program has a budget for 3,300 households. There are more than 13,000 households on the program's waiting list. Families coming out of the transitional-housing programs run by the housing authority and the Arlington Life Shelter -- like the Lockwoods -- are given preference if they meet certain requirements, said David Zappasodi, the housing authority's executive director.

"They've got to demonstrate to their service-provider agency that they're making good signs of progress," he said.

To qualify for the program, families must make half or less of the median income for the Fort Worth-Arlington metro area, or $31,700 a year for a family of four. The Lockwoods earn about $28,000.

The Lockwoods' three-bedroom home with tile floors, a fireplace and a back yard seems like a dream compared with where they had been living. It wasn't long before Edwina found a $26 plastic gymnasium for Clayton, 3, and Robert, 5, to clown around on.

But financially, things haven't been so easy since September. In the transitional-housing program, the Lockwoods didn't pay any rent, and they got a $115 utilities reimbursement. Paying both a portion of the rent as well as the electric and water bills is proving difficult.

What savings they had were eaten up by a $300 electric-service deposit and moving expenses, they said.

"I feel more comfortable" in the house, Bobby said. "It's just these bills."

Market rate

Living in a small apartment is difficult for Vedat Lika and his two children. Lika sleeps on a futon in the living room, and the children sleep on twin beds in the apartment's only bedroom.

Lika, 52, said that he wants a place to work on old cars and that the children need a place to burn off excess energy.

Lika pays $575 for the apartment, which includes the utilities. He earns $40,000 teaching cooking classes to low-income adults through the Tarrant Area Food Bank's community kitchen program.

Finding a house will be a challenge. Lika was unemployed for eight months and declared bankruptcy last summer after he accumulated $27,000 in credit card debt.

He is opposed to subprime loans, which would be the most likely option if he sought a mortgage.

Subprime mortgages carry higher interest rates to cover risks associated with lending to people who have had problems with making payments and who may choose not to state or confirm their incomes and assets when they apply for a loan, according to "The State of the Nation's Housing" report.

The mortgages are one of the root causes of the current financial crisis in the housing market.

At least 7 percent of homeowners, or more than 5 million households, have subprime loans, according to the report.

Paula Moten, vice president of underwriting for Colonial National Mortgage, a division of Colonial Savings, said when people declare bankruptcy, they must wait two to four years before they can qualify for a mortgage.

"They went through a bad period. The time frames give them time to re-establish their credit and to prove they have the ability and the willingness to pay a mortgage," she said.

Instead, Lika said he's hoping to find a lease-to-own arrangement where he does not have to work with a real estate agent.

Moten said a lease-to-own arrangement is a viable option for people in Lika's position to consider because they can sign a contract to buy the home after a certain number of years and lock in a sale price. But pitfalls exist.

If the property owner doesn't pay the mortgage, the home could be foreclosed upon, and the tenant would be forced to move. Also, the property owner could decide to sell to someone else once the lease period is up.

Lika said that he wants to be out of his apartment by January 2009 and that he is saving money toward buying a house.

"I don't want to make a mistake; I want to do this right," he said.

Homeownership

Ofelia, 40, and Antonio Luevano, 37, consider themselves lucky in some respects. They bought their Haltom City home in July 1995 for about $45,000. But they're cramped in the three-bedroom home as they raise seven children.

The children sleep in bunk beds in two of the bedrooms while the couple has the other bedroom.

The home will be paid off in August 2025.

The Luevanos have a 30-year fixed-rate loan with Washington Mutual Bank with a 7.7 percent interest rate, Ofelia said. The Tarrant Appraisal District lists the home's current market value at $65,900.

Ofelia said she sometimes dreams of having a bigger home, but she knows the trade-off is a larger mortgage payment that her family can't afford. Ofelia works part time at a Fort Worth bridal shop, and her husband works as a welder; they have an annual income of about $31,000.

Homeownership has had its bumps. The Luevanos have had problems meeting their monthly mortgage payment of $548, Ofelia said. They sometimes have to pay their mortgage past the 16-day grace period, she said.

"Years back, we had to go to our church to get help to make a house payment," she said. "We went to another church that helped with utility payments."

In the Luevano household, utilities can sometimes reach as high as their mortgage payment. Each month, the family spends about $45 on gas, $200 on electricity and $185 on water, Ofelia said. They also spend about $26 for three months of basic Internet service, she said.

"I have the Internet for the kids because it saves me time from having to go the library for them to use the computers," she said.

Ofelia said Antonio pays the bills. "I used to do it, but it was too stressful when bills would get behind," she said.

Even with problems in the past paying for their mortgage, Ofelia said it's better than renting.