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The Power of Home: Giving first-time homebuyers a path to the middle class


Husband and wife Jonathan and Courtney Hooper sit on the front step of their first home, which they bought with the help of the Ohio Housing Finance Agency.
Courtney and Jonathan Hooper bought their Columbus home three years ago through the Ohio Housing Finance Agency. First-time homebuyers like the Hoopers could benefit from Power of Home's resources to help maintain and improve the value of their homes.

Three years ago, the Hoopers bought their home for stability — and for the value it could provide in the future.

“It was an investment for us, a secure place for our family,” said Courtney Hooper, whose first child with her husband, Jonathan, is due in September. “We wanted something we could put our work into so it would pay off later — whether that’s 20, 30 or 40 years.”

That sentiment might feel uneasy to those still haunted by the 2008 housing market collapse. But experts say homeownership remains the primary way middle class families build wealth throughout their lives. That’s why Power of Home, an Ohio State partnership spurred by Schmidt Futures’ Alliance for the American Dream challenge, aims to help new homebuyers on the edge of the middle class increase the value of their properties.

In 2018, philanthropic initiative Schmidt Futures challenged U.S. communities anchored by public research universities to dream up big ideas that would bolster the middle class — specifically, by increasing the incomes of 10,000 local households by 10 percent by 2020.

Among the competition’s first round of winners was Power of Home — a collaboration of Ohio State, the Ohio Housing Finance Agency, the social enterprise Framework Homeownership and other partners — which received an investment from Schmidt Futures to get the project off the ground. Power of Home, a digital tool chockful of resources and support, targets homeowners who have incomes of about $40,000 and median savings of $1,200 — and little room for unexpected expenses like a broken furnace. These homeowners are also often the target of financial scams and pay more for their mortgages and other debt than higher income homeowners.

"A home is a place to live, but it’s also (many families’) biggest asset,” said Stephanie Moulton, associate professor and director of doctoral studies within Ohio State’s John Glenn College of Public Affairs and team lead for the Power of Home. “By the time they retire, it will most likely be their primary source of wealth. So how do we help them maximize and manage that and put them on the path to build income and wealth?”

Moulton’s been working to answer that question since 2012.

‘We saw millions of people losing their homes’

As the dust was settling on the U.S. housing crisis, Moulton and the Ohio Housing Finance Agency, a state agency that helps find housing for low-to-moderate income families including the Hoopers, were evaluating strategies to help homeowners keep their homes.

 Using a pilot program called My Money Path, they gave 500 new homeowners one year of free financial coaching. It reduced the default rate on those mortgages by 20 percent.

“It demonstrated how effective support after purchase can be,” Moulton said. “Since then, we’ve been thinking about ways to design something on a much bigger scale.”

Also in 2012, Framework launched with its first product, an online course for homebuyers, to increase access to unbiased information about the mortgage process. A year later, Framework CEO Danielle Samalin connected with Moulton to learn more about supporting homeowners over the long term.

“Stephanie and I came at this from different angles,” Samalin said. “Mine was consumer product development, and hers was academic research. We both shared a deep commitment to increasing access to affordable homeownership, and we were looking at ways to scale to as many homeowners as possible through technology.”

Moulton’s research informed the design of Framework’s second product, Smart Start for Homeowners, a content series that addresses typical challenges and questions. In the years since, Framework has helped more than 500,000 homebuyers navigate the first years of ownership. Meanwhile, Moulton and the Ohio Housing Finance Agency continued to study the problems that plagued new homeowners.

The Schmidt Futures challenge arrived at the perfect time.

“The housing crisis is 10 years ago. Our volume of first-time homebuyers is back to pre-crisis levels,” said Jim Durham, director of homeownership at the Ohio Housing Finance Agency. “A lot of moms and dads and grandmas and grandpas may have lost a lot of the equity in their home, so maybe they have a bad taste in their mouths about housing. But we can make it a great experience.”

For Durham, Moulton and Samalin, this project is about more than winning a contest.

“We saw millions of people losing their homes," Samalin said. “That’s the ‘why’ behind what I do. It’s grown out of favor to think of homeownership as the American dream. But we have an opportunity to prove them wrong and remind people homeownership is a powerful tool.”

Surrounded by trees and tidy landscaping, Courtney and Jonathan Hooper stand on the front lawn of their first home.
The Power of Home project team will try to enroll 10,000 local first-time homebuyers, like Courtney and Jonathan Hooper, into the program by the end of 2020.

Designing a platform for Ohio and beyond

First-time, middle class homebuyers are often challenged by the exhausting details of home maintenance and expenses. The Hoopers know this well — especially when you’re not your home’s first owner.

“We have had to fix a lot of things the person before us didn’t do correctly,” Courtney Hooper said. “Fortunately my husband is very talented (and has help from YouTube). When our furnace went down, he fixed it himself. When we’ve had to install fans, he figured out wiring — and if he can’t figure it out, he gets professional help.”

 The Power of Home project’s digital platform, designed by Framework, will help homeowners like the Hoopers navigate common challenges to build income, reduce expenses and buffer against unexpected costs.

The platform will include several features, such as a maintenance planner with information about when to service a furnace, clean the gutters or check the roof for leaks — preventive work that reduces expenses long-term.

It will also deliver tailored messages and reminders, and participants can receive customized real-time financial insights on homeowner concerns such as interest rates, home value and repair and improvement costs.

“They can check to see if it’s time to refinance their mortgage, if they can get a lower interest rate and how much that would save them,” Moulton said. “These customized financial insights are designed to help them manage equity in their home but also help their monthly cash flow.”

The plan includes what Moulton calls “shock protectors,” such as falling behind on payments, losing a job, or dealing with a medical event or major home repair. Home experts will refer homeowners in trouble to financial counselors. Apprisen, a nonprofit financial services agency, will counsel struggling homeowners. Those enrolled in Power of Home will have access to a low-interest loan pool for emergency home repairs.

“Typically, people who don’t have savings rely on credit cards with high interest rates to finance repairs,” Moulton said. “That causes even more financial stress.”

By reducing monthly expenses and increasing property value, Moulton estimates homeowners in the program could increase their net incomes by an average of $4,000 each year, or by 10 percent for the median household with an income of $40,000 per year. The platform’s first elements should be rolled out in August. The team has identified 40,000 homeowners to recruit to the program, with a goal to have the first person enrolled by October and 10,000 enrolled by the end of 2020.
It won’t end there.

The Power of Home’s creators hope to expand the project beyond Ohio. There are housing finance agencies like Ohio’s throughout the country, and Durham said they regularly communicate and share ideas. While they aim to serve individuals, ultimately they hope to lift communities.

“There’s a lot to gain through this program,” Durham said. “Helping new homebuyers prosper helps the whole community. If we lower foreclosure rates by increasing people’s property values, wealth and sustainability, that helps everyone.”


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