Kevin Nowak’s parents struggled to pay the bills. But, the Detroit police officer and his wife were able to draw on the equity in their house to send both of their children to college.
That education provided the foundation for Nowak to build an impressive career. He became an attorney and practiced corporate and real estate law at Thompson Hine, then accepted the position of national equity investment manager at Key Community Development Corp., a wholly owned subsidiary of KeyBank, so he could learn how to finance affordable housing projects and community development. His goal: to help others attain the American dream of owning a home and the economic advantages his own family derived from it.
“The power of homeownership, the equity that is available to homeowners, is something that really drives generational wealth in our communities, generates opportunity,” Nowak says.
In July 2019, Nowak became executive director of CHN Housing Partners, an organization whose very mission is leveraging the power of affordable housing to effect those changes. The nonprofit, headquartered at 2999 Payne Ave., is a developer of affordable housing and housing service provider that serves approximately 30,000 low-income individuals each year. Since its founding in 1981, CHN has developed more than 6,000 homes on vacant lots in areas such as Slavic Village, Clark-Fulton, Hough and the Detroit-Shoreway neighborhood.
CHN is nationally known for its Lease Purchase Program. Nowak explains that CHN uses monies provided by the Low Income Housing Tax Credit, a federal program that funds the building and preservation of affordable housing, to develop single-family homes, most of which are now new construction.
It then rents each dwelling for the initial federally mandated 15 years. At the end of the 15 years, the home is available for a renter earning less than 60 percent of the area median income — around $40,000 for a family of four, according to Nowak — to buy. Most tenants apply for an average $10,000 to $12,000 mortgage from CHN’s Lease Purchase Program loan fund, CHN Balance Sheet Capital, along with a small loan from the city of Cleveland or state of Ohio.
“We property-manage and maintain the home throughout the entire [15-year] period,” Nowak says. “We have a financial capabilities team who helps the family from the first time they come into our home through the time that they buy the home. We have a team who works with the family near the time of their purchasing the home to give them further homeownership coaching and to help them through the closing process.”
The program, which has yielded 2,189 homes to date, boasts an impressive success rate. Eighty-five to 90 percent of tenants become homeowners.
CHN is aiming to make homeownership a reality for more people with CHN Housing Capital, a new lending arm offering small-dollar mortgages to prospective Cuyahoga County homebuyers. The subsidiary, created with support from the city of Cleveland, Cuyahoga Land Bank, Congregation of St. Joseph and Enterprise Community Partners, will seek the federal designation of Community Development Financial Institution this year. Nowak observes that there is a lack of mortgages under $50,000 being made by banks. Plus, Dodd-Frank Act banking reforms have made it harder for financial institutions to loan money to people with less-than-perfect credit.
“It’s really continued to stop credit for people who are in the low- to moderate-income spectrum and oftentimes, unfortunately, impacts communities of color,” he says.
CHN’s months-old affiliation with Neighborhood Housing Services (NHS) of Greater Cleveland will facilitate CHN’s goal of filling that gap. Nowak notes that the nonprofit offers homebuyer counseling services to a broader segment of the public, as well as contracts with the city and county for home-repair and down-payment assistance.
“We find efficient ways to deliver the services that we provide and then to scale them to maximize impact,” Nowak says. “What we were able to do then, between the lending work that we’re doing and we’re growing and the services that NHS provides, is to really become a one-stop-shop for alternative mortgage lending here in Northeast Ohio.”