NEW ORLEANS (WGNO) — Habitat for Humanity warns that over 100 residents may face foreclosure as homeowners across the state struggle with rising insurance rates.
At a city council meeting on Monday, Marguerite Oestreicher, the regional executive director for Habitat for Humanity New Orleans, stressed the reality of the situation. “I have over 100 elderly homeowners who are facing imminent foreclosure, and this is not an exaggeration,” she said.
Habitat for Humanity, both builder and lender, offers 0% interest loans to these families, making refinancing impossible. “These are 0% interest loans. So, it’s not as though they can renegotiate the terms of a mortgage,” Oestreicher explained. Insurance premiums for some Habitat homes have surged by $2,000 to $5,500 per year.
The steep hikes are especially devastating for long-time homeowners. “If you purchased your home 20 years ago and you were at 30 percent of the area median income, your income then was roughly $17,000 to $20,000, and there’s no way to catch up,” said Oestreicher.
Many residents are now facing homelessness. “I get phone calls every week from desperate people who are literally going without medications, skipping meals and asking us what help is out there,” she added.
The problem began around the start of the COVID-19 pandemic and has been exacerbated by hurricanes. “It’s a confluence of events beyond everyone’s control,” Oestreicher noted.
While Habitat for Humanity has been able to offer temporary deferrals, this is not a long-term solution. “We need to catch people up so that they’re then stable, and they can at least move forward where there’s some kind of a path,” said Oestreicher.
In Monday’s meeting, council members committed to seeking solutions. Councilmember Lesli Harris suggested the Housing Trust Fund as a potential lifeline.
Approved last November with an initial deposit of $17 million, “It’s a mechanism to hold money that would support initiatives around affordable housing, the creation of affordable housing, making sure that blighted housing is repaired, rental rehabilitation, and things like this, where there may be a group of people who need additional assistance,” Harris explained.
Looking ahead, a ballot measure in the upcoming November election will ask residents to approve an annual 2% deposit from the city’s budget into the Housing Trust Fund. “That amounts to approximately $17 to $20 million year over year,” Harris said. She emphasized that it is not a tax; the funds come from the city’s general fund.
For information about how to help the families served by Habitat for Humanity New Orleans, visit the Habitat for Humanity New Orleans website.
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