The U.S. Department of Housing and Urban Development (HUD) this week announced a new rule aimed at bolstering the department’s Section 184 Indian Housing Loan Guarantee program, with the goal to increasing lender participation and ensure access to potential Native American beneficiaries.
The final rule, published in the Federal Register on March 20 but formally announced this week, aims to strengthen the program by “clarifying rules for stakeholders” and cites increased demand as one reason for pursuing the rule.
There are a total of 30 program changes listed in the rule’s Federal Register entry, but it is summarized by explaining how the new rule “adds participation and eligibility requirements for lender applicants, direct [and non-direct] guarantee lenders, […] holders and servicers and other financial institutions,” according to the entry.
The new rule also clarifies governing rules for tribal participation in the Section 184 program and “establishes underwriting requirements, specifies rules on the closing and endorsement process, establishes stronger and clearer servicing requirements, establishes program rules governing claims submitted by servicers and paid by HUD, and adds standards governing monitoring, reporting, sanctions, and appeals.”
HUD acting secretary Adrianne Todman said that this new rule has been issued in an effort to provide more access to homeownership for tribal communities.
“Homeownership is key to building generational wealth. By enhancing the Section 184 program, we are ensuring homeownership and wealth-building opportunities are available to Native American borrowers,” Todman said. “[This] announcement emphasizes the Biden-Harris administration’s dedication to strengthening the Nation-to-Nation relationship with Tribes and making key investments in Indian Country.”
Miki Adams, president of CBC Mortgage Agency — a correspondent investor wholly owned by the Cedar Band of Paiutes of the Paiute Indian Tribe of Utah — expressed support for the final rule in a statement shared with HousingWire.
“The Section 184 program is a vital tool for so many Native American homebuyers,” Adams said. “The new regulations will bring more clarity and predictability to this important program, and we applaud the administration for the improvements and their efforts to work closely with Tribal leaders and other stakeholders. There is still more that must be done to modernize the program and we look forward to working collaboratively with HUD on future improvements.”
During the public comment period, several opposition comments were submitted to the department. HUD provided rebuttals to many of the expressed concerns in the final rule’s entry, including on issues such as the onerousness of the rule’s requirements, sanctions and penalties that critics said could reduce the intended participation from tribal communities.
“HUD appreciates all the concerns raised by the commenters. HUD does not believe that the proposed rule will deter Tribes and Direct Guarantee and Non-Direct Guarantee Lenders from participating in the program,” the department responded in part. “Most of HUD’s proposed rule codified current program practices.”
The effective date for the new rule is June 18, 2024.
“The California Mortgage Relief Program has achieved remarkable success by preserving homeownership opportunities which are so vital to ensuring our most vulnerable populations have a shot at building generational wealth,” CalHFA executive director Tiena Johnson Hall said in a media release. “This program stands as a testament to CalHFA’s commitment to building a more equitable … [Read more…]
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Jessica Mendoza: Well, good morning, Harston.
Harston Jones: Good morning. How are you?
Jessica Mendoza: I’m well. How are you?
Harston Jones: Oh, just fine. Considering.
Jessica Mendoza: Yesterday I had a call with a man named Harston Jones. He’s 62, recently retired, and is based in Atlanta, Georgia. He lives in a home he bought in 1998.
Harston Jones: It’s a ranch style home, on about a half acre. It’s a very diverse community. It’s very convenient to a lot of important areas of Atlanta.
Jessica Mendoza: Right. And location, location, location. You have to choose the community that you want to live in.
Harston Jones: Absolutely. I got lucky on that.
Jessica Mendoza: Like a lot of people, Harston took out a mortgage when he bought his home. A few years later, he got a second mortgage on the house. It was a home equity line of credit for up to $50,000 and Harston used that money to renovate his property.
Harston Jones: Some major repairs had to be done. All the windows had to be replaced. I needed to put a roof on the house. I needed to fix the driveway, it’s a pretty long driveway. Things like that I needed to get done.
Jessica Mendoza: Soon after Harston took out that second mortgage, the financial crisis of 2008 happened.
Banks were getting bailed out, home prices were crashing, and a lot of people, like Harston, lost their jobs. Many stopped making payments on their home loans. Some banks stopped sending out statements for those loans, giving people the impression their loans had been canceled. Harston was one of them.
Harston Jones: And I thought it was over. And then I got this surprise letter in exactly three years ago this month.
Jessica Mendoza: Since then, Harston has been embroiled in a legal fight to keep his home, a fight that other homeowners across the country are also going through.
Welcome to the Journal, our show about money, business, and power. I’m Jessica Mendoza. It’s Friday, June 23rd.
Coming up on the show, how zombie mortgages are coming back to stalk American homeowners.
The financial crisis was a chaotic time for the housing market. Home prices were falling, people were losing their jobs, struggling to pay their mortgages, and that led to a wave of foreclosures. Here’s our colleague Ben Eisen.
Ben Eisen: A lot of people lost their homes, because when you don’t pay your mortgage, the lender has the right to foreclose on your house and so there were tons of foreclosures. There were a lot of people that went to their mortgage company and modified their loan. Basically got the company to change the terms of the loan so that they could get back on track with payments. And then there were some loans that just kind of disappeared.
The lender, for whatever reason, wasn’t going to foreclose on the house, but they also weren’t going to get repaid back. And so a lot of these banks, they just kind of wrote down the value of the mortgage, basically saying, “We are going to recognize a loss on her own balance sheet for having made these mortgages.” And at that point, depending on just what the lender does with that mortgage, they might stop sending statements to the borrower.
Jessica Mendoza: And why would the bank do that?
Ben Eisen: Banks were under pressure to clean up their balance sheets. They had tons and tons of these loans and that had all soured at once. Not every bank had the appetite to kind of go through with all of these foreclosures, so sometimes they didn’t do that, and instead they basically just kind of ignored the loan for a bit.
Jessica Mendoza: Banks call this charging off a loan.
Ben Eisen: This is basically the technical term for what a company that is in the business of lending money does when they’re not going to be able to collect money on that loan and they need to basically get it off their balance sheet. They charge it off. They just basically take the losses on it.
Jessica Mendoza: Banks all over the US started charging off second mortgages because it seemed like homeowners wouldn’t be able to repay. And this is what Harston says he thought happened to his second mortgage.
He had stopped payments on his second mortgage during the time when he was out of a job. When he was able to restart payments, he got back in touch with his bank.
Harston Jones: I called them when I got stable again, and they told me the mortgage is charged off. And I thought it was over.
Jessica Mendoza: Your bank said that it was charged off?
Harston Jones: Yes. When I saw charge off, I said, “Hey, it’s charged off.”
Jessica Mendoza: But Ben says there’s actually a big difference between canceling a loan and charging it off.
Ben Eisen: That doesn’t mean the loan went away. That simply means the bank is deeming that mortgage uncollectible.
Jessica Mendoza: So just saying like, “It’s not worth the trouble. We’ll take the loss. Moving on.”
Ben Eisen: Exactly.
Jessica Mendoza: Many homeowners, including Harston, thought they could move on too. Then one day, in the spring of 2020, a letter arrived for Harston. It was a pretty ordinary looking letter.
Harston Jones: It wasn’t clear from the outside. I said, “Why are these people contacting me?” And I opened it up and it was an official accelerated foreclosure letter with all the mouse print for like four or five pages.
Jessica Mendoza: The letter was from a law firm representing an investor called IslandCap. It said that IslandCap was now the owner of Harston’s second mortgage. And because Harston had missed a decade of payments, IslandCap was threatening to foreclose on his home.
As you were reading it, what was going through your mind?
Harston Jones: I couldn’t believe it. I was saying, “How could this happen?” I was very confused, but when I tell you that was one of the lowest points of my life to get that notice. It was awful. It was awful. It was a nightmare.
Jessica Mendoza: It turns out that Harston’s second mortgage hadn’t died. His bank had sold his loan to new owners. Banks do this all the time.
Ben Eisen: Often what they do is they just sell them off, to whoever wanted to buy them. They might say, “This loan is no longer worth 100% of its original value, but we might be able to sell it for 5% of its original value.” And then all of a sudden it enters this new world of investors who are buying it because they think there’s some value to be squeezed out of it.
Jessica Mendoza: These investors buy the mortgages for pennies on the dollar, waiting for a day when house prices go back up and it makes sense to start collecting monthly payments again.
Ben Eisen: And that’s what happened with a lot of these mortgages. They changed hands, sometimes many times, and went from an investor to investor. At some point, it lands in the hand of an investor who says, “You know what? I’m going to go to the homeowner and tell them that they have a new mortgage company and they have to start paying again or they have to make up for all those missed payments or I’m just going to foreclose on the house.”
Jessica Mendoza: But Harston wasn’t going to give up his home without a fight.
That’s coming up.
After receiving that letter from IslandCap’s lawyers, Harston says he jumped into action. He started contacting attorneys to figure out what his options were.
Harston Jones: What else could I do? I needed help. I needed representation. I needed somebody who understood what’s going on.
Jessica Mendoza: At first, IslandCap didn’t say how much money Harston owed. But they eventually asked for about $95,000, which included interest and late fees on top of a $43,000 loan. Harston’s attorney tried to negotiate with IslandCap over a repayment plan or settlement. When the Wall Street Journal reached out to IslandCap, the company said it’s in the business of buying defaulted mortgage loans from banks at a discount. And that if the borrower simply restarts loan payments, IslandCap would take no further action. But Harston and IslandCap couldn’t reach an agreement.
Harston Jones: And we tried to negotiate with something reasonable, but they won’t budge. And I knew why they were doing it, because in one of the last correspondences we had with them, they said, in clear writing, “because he has so much equity in the property.” I knew that’s what it was all along. But they even said it out loud that the reason they’re not given up on this, in so many words, they said it clear as day, “because of the amount of equity he has in the property.”
Jessica Mendoza: We ran this point about Harston’s home equity past IslandCap, but didn’t get a response. Our colleague Ben says that higher home prices are the reason so many zombie mortgages are coming out of the woodwork now.
The US housing market has been on a tear lately. Home values have been soaring. And after years of making payments on their first mortgages, homeowners have built up a lot of equity in their homes.
Ben Eisen: And the equity is important because that is the value of your home and if somebody owns the right to foreclose on that home, the thing that they’re foreclosing on has gotten a lot more valuable or the thing that they’re using to demand payment has gotten a lot more valuable.
Jessica Mendoza: In other words, the more valuable a house is, the more profit there is for the second mortgage holder, after all the other home loans have been paid off.
Ben Eisen: So what we’re seeing today really kind of comes from this place of there’s a lot of value in these homes so it’s now worth my while to go and try to use that old loan to squeeze some money out of it.
Jessica Mendoza: This experience left Harston feeling like the system is unfair. He tried to settle with IslandCap, but he also sued them. Harston argued that IslandCap hadn’t shown proof that it had the right to foreclose on his home, but his case hasn’t succeeded.
Harston Jones: My attorney made it clear the statutes don’t support us, but something needs to be updated. And that’s what I was hoping somebody would step in and say, “Okay, this is something that needs to change. It’s not fair to these people who didn’t realize this was going on, that their charged off loans were being sold again.” I just thought by principle, somebody would see this is clearly wrong. At one step or the other, I thought one jurisdiction or another would say, “Okay, we have to stop this. But nobody stepped up.”
Jessica Mendoza: In Washington, the Consumer Financial Protection Bureau has started looking into this issue of zombie mortgages and held a hearing about it in April. But for now, Ben says there isn’t usually much homeowners can do if investors threaten foreclosure.
Ben Eisen: And I think what’s so jarring for people is just to go from this place of, “I haven’t thought about this debt in 10 years,” to, “Oh wow, all of the financial gains that I’ve accrued since I thought that debt went away are now in jeopardy.” It really shows sort of the flip side of rising home values. We think of the housing market rising being mostly a good thing. You’re building generational wealth and such. If you have some sort of zombie or ghost in your closet or whatever it can kind of bring that out of the woodwork because all of a sudden you have something that is a lot more valuable than it was. And that’s really what we’re seeing here.
Jessica Mendoza: At this point, Harston has been fighting to keep his home for three years. And now he’s exhausted most of his options. He says he sometimes gets calls from property developers who want to buy his home. Selling would potentially give Harston a way out, by giving him the money to end his dispute with IslandCap. But-
Harston Jones: I just say, “I’m not interested.” I just say, “No, thank you.”
Jessica Mendoza: And so you wouldn’t consider selling your home to an investor, like that’s not-
Harston Jones: No.
Jessica Mendoza: -that’s not a path you’re-
Harston Jones: Not in my plans.
Jessica Mendoza: Harston says his last resort might be to declare personal bankruptcy. He still hopes to find a way to keep his home.
Harston Jones: I was told to contact a bankruptcy attorney. So I did pay a bankruptcy attorney. I went through the process. My attorney said, “Do you want to have that ready just in case?” Because he and the bankruptcy attorney both said, “We’re not going to let you lose your house, Harston.” So that gave me, once I got over the fact that I might have to file bankruptcy, it was easier to deal with. I have resolved the fact that if I have to, I have to. I’m a different person than I was three years ago. I’m not freaking out about anything. I’m not freaking out about if that’s my last option. I’m okay now. I’m okay. I’m not losing any sleep anymore because I know it’s like the kill switch. If I have to pull it, I will. And I’ll file bankruptcy.
Jessica Mendoza: That’s all for today, Friday, June 23rd. The Journal is a co-production of Gimlet and The Wall Street Journal. Additional reporting in today’s episode from Nicole Friedman. The show is made by Mahara Dhoni, Annie Baxter, Arianna Beau, Katherine Brewer, Maria Byrne, Pia Gadkari, Rachel Humphreys, Ryan Knutson, Matt Kwong, Kate Linebaugh, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinoza, Heather Rogers, Jonathan Sanders, Pierce Singgih, Jeevika Verma, Lisa Wang, Catherine Whelan, and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singhapok, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Peter Leonard, Bobby Lord, Nathan Singhapok, Griffin Tanner, and Blue Dot Sessions. Fact checking by Sophie Hurwitz.
Thanks for listening. See you on Monday.
Buying and selling a home can be a confusing, intimidating process. From fine-tuning the initial listing to completing the mountains of paperwork needed for closing, homebuyers and sellers can find themselves juggling a wide range of issues. Real estate professionals can help by hosting educational workshops to help make the transaction easier. Here are 11 tips to make these workshops more effective.
1. Find your audience
Not every real estate transaction is the same because not all buyers and sellers are the same. Before you plan your workshop, consider who your target clients are. Do you specialize in helping first-time buyers and sellers, or are you leaning towards working with real estate investors? Maybe you are focusing on empty nesters looking to downsize or clients looking for vacation homes they want to rent out in the off-season.
Your audience will determine the focus of your workshop. It’s the first step to making your workshop a success, and also influences how you will market your event (more on that below).
2. Organize relevant topics
Your audience determines the topics you cover. Veteran investors don’t need a lecture on what to bring to the closing table, but first-time buyers do. First-time home sellers might be interested in learning how to prep their homes for sale, while rookie buyers might want a step-by-step outline of the entire process.
Start planning your event by making a list of the subjects that might be confusing or complicated, and plan your workshop itinerary from there.
3. Choose a venue
Don’t plan to fail by failing to plan, especially when it comes to things like parking, accessibility, and capacity. The venue you select needs to be comfortable and accommodating for everyone. Consider things such as:
Parking (number of spaces and accessibility for those in wheelchairs)
Seating at the venue (tables, chairs, etc.)
Location (central to public transportation)
Some good workshop venue options include community centers, public libraries, and hotel conference rooms. If you’re hoping to reach clients who are relocating from out of state, consider hosting workshops online.
4. Market your event
You can plan a perfect event, but if your marketing strategy isn’t comprehensive, how will people know about it? Again, how you market will depend on your audience. Social media marketing is a great way to spread the word and can be coordinated so one post hits multiple platforms at a time.
Other ways to reach a wider audience include:
Posting on community bulletin boards (in physical locations or online)
Sending a note to your mailing list
Asking former clients to spread the word
Another way to market is to ask influencers on social media to help promote the event. They may also be able to attend the event, bringing their audience with them.
5. Provide take-home resources
Real estate transactions can be complicated, and some attendees may be overwhelmed by the amount of information you present. Help them better understand and retain information by providing resources they can take home.
These handouts can include:
Checklists for the buying and selling process
Definitions of real estate terminology
Outlines of how to prepare a home to sell
A basic step-by-step guide to buying a home
Lists of related real estate professionals (i.e., mortgage lenders, home inspectors, etc.)
Very few people can attend an hour-long lecture and remember everything they heard. For best results, present information in many different ways. Use short videos, slideshows, and small-group discussions and activities to deepen their understanding of the topic.
7. Highlight guest speakers
Guest speakers provide two primary benefits to your workshop. They bring specialized expertise. Real estate transactions involve a variety of professionals, each experts in their field. Inviting these experts to speak is a great way to help workshop attendees better understand each step of the process. For example, a mortgage lender can describe different types of mortgages and explain which might be best for the buyer or the type of transaction. Guest speakers can also offer a neutral third-party perspective on sensitive topics, like how to save money at closing.
They cross-promote the event. Guest speakers will promote the event on their social media platforms. This increases your potential audience and introduces you to more people you might not otherwise reach.
8. Make it interactive
Very few people enjoy sitting in a chair for hours being lectured to. Give participants a chance to engage with speakers and other attendees. You can do this by facilitating small group discussions, encouraging questions, and organizing breakout sessions on specific topics of interest.
9. Ask for feedback
Getting a real estate workshop right the first time is hard, so asking participants for feedback is key. This helps refine planning for future events and helps build relationships with attendees. Additionally, positive feedback can be used (with permission) as testimonials to promote future workshops.
10. Follow up with participants
Asking for feedback is just the first level of follow-up after the workshop. Send out thank-you notes or emails the day after the workshop. On day three post-workshop, reach out again with an invitation to engage. This might look like:
Asking attendees if they have other questions
Providing additional resources
Sending listings based on interest
Offering incentives for continued collaboration
This is not the time for a hard sell, but following up with attendees is an opportunity to develop positive relationships that might lead to more business opportunities in the future.
11. Keep the most important thing the most important thing
Homeownership remains a crucial part of what is commonly referred to as the American Dream. The primary goal of these workshops is to educate people on how they can be involved in the pursuit of homeownership. For homeowners looking to sell, your workshop can be critical in their path to building generational wealth.
The most important thing? Educating attendees and demonstrating your knowledge, professionalism, and trustworthiness. By doing this, you position yourself as a valuable resource in your community who genuinely cares about their clients and wants the best for them. Ultimately, that will build a solid foundation for professional relationships that continue to grow as your clients’ needs evolve.
Luke Babich is the co-founder of Clever Real Estate.
Homeownership is a hallmark of the American Dream; it’s one of the few paths to building generational wealth and achieving financial freedom. Unfortunately, for many, it can feel like a pipedream.
According to a recent report from the U.S. Census, the homeownership rate has dropped to 63.1%, its lowest rate since 1970. Moreover, the outlook for individuals from minority communities is even more bleak. Based on a report from the National Association of Realtors in 2021, the homeownership rate among Black homeowners (43.6%) and Hispanic homeowners (50.6%) significantly lagged behind Asian homeowners (62.8%) and white homeowners (72.7%).
Much of the gap can be attributed to historical policies and practices, such as redlining, that prevented minorities from buying homes in certain areas, regardless of income level. As a result, individuals from underserved communities were denied the same wealth-generating opportunities. While many of those policies and practices are now illegal, homeownership still feels unattainable for some consumers.
Increasing the homeownership rate — particularly among diverse communities — is a marker of progress for our country. Closing the gap is paramount to uplifting individuals and households from underserved communities. We have a responsibility as a mortgage and financial services industry to drive meaningful change and create a more equitable path to homeownership.
Driving homeownership change requires resolve and education
While there are programs designed to create a path to homeownership for low- and moderate-income families, some of these programs haven’t gone far enough. For example, some families may be able to access down-payment assistance through non-profits and lenders, however, those families frequently need more financial assistance to maintain and remain in their homes over the course of many years. Without the additional help, some families may lose their homes.
Quite frankly, providing access to financial resources is only part of the homeownership equation.
Based on a recent Experian survey comparing the experiences of Black, Hispanic and white consumers, one barrier for Black and Hispanic consumers aspiring to become homeowners is not knowing where to start. In addition, 58% of Black and Hispanic consumers who were denied a mortgage do not know what they need to do to get approved in the future.
There’s a tremendous opportunity for mortgage lenders, non-profits and other financial services participants to redefine our financial inclusion efforts. In addition to addressing financial hurdles, we need to tackle some of the other barriers to closing the homeownership gap, including financial education. This could mean examining the types of questions individuals have about certain products or services, or meeting with community leaders to better understand the challenges that underserved communities are facing.
Individuals and households from underserved communities welcome the opportunity to learn about basic financial concepts, including how to navigate the housing market. Listening to the challenges they encounter, and imparting knowledge is how the mortgage industry can help them prepare to become homeowners.
For example, HomeFree-USA’s “Fast Track to Homeownership” program gets renters ready for mortgage approval and homeownership. Its intermediary network oversees 53 affiliated community and faith-based housing counseling agencies across the nation.
Financial educational resources, such as tips for building and maintaining good credit, that is customized to each community, coupled with classes that provide individuals with financial knowledge and access to tools, can help them to boost their credit score and grow the overall homeownership rate. Even something as fundamental as understanding the various tax refunds for homeowners who are eligible can make a huge impact on new homebuyers.
Inclusion cannot happen in a vacuum. Closing the homeownership gap among diverse populations requires a long-term vision and commitment from stakeholders across the financial services community. Providing access to financial assistance and the knowledge to navigate the housing market better prepares consumers to become first-time homeowners, and more importantly, to begin building generational wealth.
Wil Lewis is the global chief diversity, equity, inclusion and talent acquisition officer for Experian. Gwen Garnett is the executive director for HomeFree-USA.
Secretary of the U.S. Department of Housing and Urban Development (HUD) Marcia Fudge “fired up” the crowd during her keynote speech at the 2023 National Association of Real Estate Brokers (NAREB) Annual Conference when she spoke about the recently-announced HUD-NAREB partnership designed to tackle appraisal bias.
“HUD and NAREB will work together to fight appraisal bias in the Black community,” Fudge said. “I live in a Black neighborhood by choice; my home is bigger, my lot is bigger, yet my home is valued less than the white neighborhood down the block; this must change.”
In an announcement, NAREB described Fudge’s speech as a “dynamic and inspirational address that ignited passion and commitment among attendees at NAREB’s annual convention.”
Fudge and NAREB President Lydia Pope both hail from the Cleveland, Ohio area. Fudge praised Pope’s work as the association’s leader during her speech. Fudge also addressed her commitment as HUD Secretary in addressing disparities for marginalized communities.
Fudge also addressed the access to credit for borrowers of color, and discussed the work HUD and the Biden administration are doing to address the role homeownership plays in building generational wealth, a common point of discussion for HUD under her leadership thus far.
“Some Black borrowers lack credit, but now when obtaining an FHA loan, rental history can be used as a credit history,” she said, touching on recent policy changes at HUD and the Federal Housing Finance Agency (FHFA) that considers on-time rent payments as a part of a potential borrower’s credit history.
In terms of the role homeownership takes in building wealth for families, Fudge reiterated her belief in forging a more direct path to homeownership. “We cannot deal with inflation until we deal with the housing crisis,” she said. “Most of us build wealth through homeownership.”
Fudge also admonished certain policymakers for telling younger people that they don’t need to own a home.
“Who told them that foolishness?,” she reportedly asked rhetorically. “We need to help get them in homes, so we need your advocacy. […] Stay encouraged, stay vigilant, We need you. Thank you,” she concluded.
As a mom, finding clever ways to save money can help secure your family’s financial future.
Yes, I know, there are many other, more impactful ways to build wealth, and in the grand scheme of things, saving a buck here and there might not seem like the recipe for propelling yourself (with your entire brood in tow) to millionaire status, but hear me out.
Unless you stop the bleeding (in this case, frivolous spending), it will take you a lot longer to get there.
In my mind, building generational wealth is a combination of developing marketable skills, earning from those skills, investing wisely, and frugal spending.
…And putting your foot down when any member of your brood wants to splash $1,000 on a pair of, in my view, hideous sneakers.
That’s why I rave about How to Create a Budget and Everything You Need to Know to Start Using Coupons.
A Mom’s Guide to Saving Money the Smart Way
Of course, as with everything worth doing, it’s much easier said than done. Believe me; I’ve had moments of taking on unnecessary expenses at the grocery store despite having blown past our monthly budget.
It happens; you are going to slip up sometimes. The key is to have a solid hold on your spending habits and a savings system. That way, even if you go off the rails occasionally, you can recover and stay focused on your ultimate savings goals.
With that in mind, here are my top-secret (shhhhhh) creative ways to save money monthly.
1. Start Budgeting
It sounds obvious, doesn’t it?
Would it surprise you to learn that only 30% of American households actually have a detailed monthly budget prepared? Yes, according to a Gallup poll, two in every three Americans don’t have a monthly budget, nor do they have a long-term financial plan or investment goals.
I kid you not; budgeting is one of those things that everyone knows they should do, yet up to two-thirds of us don’t!
Having a detailed monthly budget will open your eyes to the reckless spending on everyday purchases you are currently engaging in.
From unnecessary online shopping sprees to pizza deliveries, even your grocery bill might have something you don’t need, or you can find cheaper alternatives if you just look.
You won’t know where all the money is going until you have an actual, written-down budget. THEN you will see just how badly you’ve been throwing cash around.
Here’s a quick guide on budgeting categories for the family if you want to get started right away.
2. Use Money Saving Apps
If you are anything like me, you put most of your grocery shopping, utility bills, and monthly bills on your credit or debit cards. While most of these offer rewards when you use them, you can go further and use savings apps.
Here’s why. Many of these apps highlight saving opportunities and fetch rewards such as cash back on many purchases you would make anyway.
Neat, huh?!!
Here are a few that I like using. You can check them out and see what you think:
Ibotta: I get cash back for most purchases.
Acorns: This one helps me save and invest.
Rakuten: These guys give you cash back on online purchases you make in over 3,500 stores.
3. Try Out Capital One Shopping
Now this is a tool I simply love! Capital One Shopping is not only free, but it also works in the background. So you don’t need to remember to use it every time.
If you want to find the best deals online and gift cards and coupons, you must install Capital One Shopping on your browser.
You will save a ton of money. Trust me on this one! It is by far one of my favorite and most clever ways to save money.
4. Create a Meal Plan
Have you ever found yourself at the grocery store buying things that weren’t on your list because they looked “interesting to try out?” I know I have!
I’m not saying you shouldn’t try new things and new recipes (what would life be without these little adventures?). I’m saying that meal planning will help you cut back on a lot of unnecessary expenditures when it comes to groceries.
Here’s why I meal plan:
It helps us avoid food wastage (leftovers are planned for)
Encourages a better diet
Saves money on impulse purchases at the grocery store
But most importantly, meal planning helps me save money and curb my spending habits on those nights I don’t know what my family will eat. I will already have a plan in place to help cut down on ordering in and eating out.
Check out my free printable meal plan!
5. Conduct a Personal Finance Audit
I know! I know! That sounds like what the IRS is for, but hear me out.
There are things you are paying for now that you either don’t need or don’t even remember that you are paying for unless you run a complete audit of your finances.
When was the last time you actually saw your husband reading that “Monster Trucks Forever” magazine that keeps coming in the mail?
How about you? Are you really going to visit all those vineyards someday? Then why are you paying for that subscription?
We often put so many little $1-a-month subscriptions on our cards because they seem important at the time, or a dollar a month doesn’t seem like that much. But they add up.
Run a quick audit on your bank statements to find out what you are paying for that you no longer use or don’t actually need, and cut it out.
These are just some creative ways I use to reduce our spending and save money. Saving money doesn’t have to be painful. You just need to find ways to reduce your living expenses (not necessarily lifestyle) and channel all that extra cash into your savings account.
Also see: How to get out of debt fast when you don’t have much money
How about you? What are some of your clever ways to save money?
There’s more to banking than low monthly fees, high yield savings, and a large ATM network. More Americans today seek banks and credit unions that align with their values when it comes to sustainability and social responsibility.
The U.S. banking system tends to disregard lower income and rural communities, with traditional banks establishing multiple branches in the country’s largest and wealthiest cities. The most socially responsible banks, on the other hand, provide online banking, low monthly fees, and no minimum deposit requirements, making them accessible to lower income individuals and families. They may also support efforts to help lower income individuals qualify for personal loans, auto loans or mortgages at fair interest rates.
But that’s not all that comes with socially responsible banking. Socially responsible banks emphasize financial literacy for those in their local community. They might also consider their organization a green bank, committed to fighting climate change and avoiding projects that support fossil fuels.
10 Best Socially Responsible Banks and Credit Unions
The best socially responsible banking institutions combine sustainability, accessibility, transparency and ethics to help make the world a better place. Yet, you won’t sacrifice top-notch personal checking and savings or even high-quality business banking when you choose one of the financial institutions on our list. You can have the best of all worlds – and do what’s best for the world – by choosing a socially responsible bank or credit union.
1. Aspiration: Best for Online and Mobile Banking Services
Aspiration is not a bank. But it’s one of the best cash management accounts offered anywhere online, with no monthly fee and a host of money management features. The Aspiration Plus Spend Save account that offers 3% interest on savings.
Aspiration is a certified B-Corp that shows its commitment to socially responsible banking with a variety of programs. Aspiration will plant a tree each time you round up a debit card purchase to deposit the difference in your Save account. It pays 3% to 5% cash back on debit card purchases with companies that are members of the Conscience Coalition, a group of small businesses devoted to social responsibility and sustainability.
Aspiration offers two accounts: One asks members to “Pay-What-Is-Fair,” which means you can use the account for free if you choose. Aspiration Plus costs $7.99 monthly or $71.88 annually (save $24 when you pay upfront.) Save accounts in the Pay What Is Fair model earn 1% APY, while Aspiration Plus savings accounts earn 3% APY.
2. Amalgamated Bank: Best for Investment Planning
Amalgamated Bank has branch locations in the nation’s largest cities: Boston, New York, San Francisco and Washington D.C. The bank offers personal checking and savings accounts with no monthly fees.
Amalgamated Bank offers four checking account tiers, including three interest bearing accounts. Two of the accounts have no minimum opening deposit. If you choose the interest earning Give-Back Checking account, you’ll earn a high APY of 0.90% – 0.95%, with an additional contribution of one-half of your interest earnings going to the charitable organization of your choice.
In addition to its choices in checking and savings accounts, Amalgamated Bank stands out when it comes to helping new retail investors choose ESG companies to invest in and plan for their future.
3. Spring Bank: Best for New Yorkers
Hailed as New York’s first B Corp bank, Spring Bank offers personal and business banking online and at branches in Harlem and the Bronx. The Green Checking account offers no monthly fee with direct deposit, paperless statements and no overdraft fees. If you need an account to write checks, you’ll want to choose the Basic Checking account.
Spring Bank deposits are insured by the Federal Deposit Insurance Corporation, up to $250,000 per depositor, per account. But the bank works with the IntraFi Network to also insure multi-million dollar deposits across multiple reputable U.S. banks.
Spring Bank offers CDs with terms from 90 days up to five years with a minimum deposit of just $250 and interest rates ranging from1.50% APY up to 3.25% APY. The bank also has a high-yield Vacation/Club savings account for short-term savings.
Spring Bank ranks in the top 5% of all 3,000 B Corps across the world and earned awards for its Governance and Customer Service in 2022. The company strives to provide affordable financial products, enabling its customers to avoid what it calls “fringe” financial products like check-cashing services and payday loans.
The bank also supports small businesses in New York and beyond with business checking accounts, money market accounts, and business loans.
4. Beneficial State Bank: Best for West Coast Residents
With seven locations across California, Oregon, and Washington, Beneficial State Bank is the B Corp bank of choice for those on the West Coast. The bank’s majority owner is Beneficial State Foundation, a nonprofit organization serving the public interest.
Beneficial State Bank offers three checking accounts, all with a $50 minimum opening balance and a low monthly service charge. eChecking waives the monthly fee if you sign up for eStatements. Checking and Interest Checking products have low monthly service charges that are easy to waive if you meet certain criteria. The bank also has savings, money market, CD, and IRA accounts to help you meet your long-term and short-term savings goals.
With an emphasis on ethical, equitable banking, Beneficial State Bank is a green bank that does not support or lend fossil fuel companies. The bank shows where every percentage of your deposit goes and says that 75% of its lending occurs within its mission categories. The other 25% supports other categories, but never to projects or organizations that cause harm to the planet or the people on it.
Some of the bank’s top lending categories for businesses and consumers include environmental sustainability, affordable housing, auto loans with fair interest rates, and health and well-being. The bank is also a preferred lender for clean vehicle programs in the state of California.
5. City First Bank, A Subsidiary of Broadway Federal Bank: Best for Commercial and Nonprofit Banking
City First Bank is part of a family of companies devoted to socially responsible lending and personal and business banking in low to moderate income communities. City First Bank, based in Washington, D.C., is a black-led, minority depository institute (MDI), as well as a B Corp and a member of Global Alliance for Banking on Values.
City First Bank offers a variety of personal and business banking products, as well as accounts for nonprofit organizations. The personal checking account has no monthly fee if you meet any of four criteria:
One monthly direct deposit
10 debit card transactions
eStatement enrollment
Minimum monthly balance of $100
The bank also offers a personal savings account, CDs, money market accounts and savings accounts for minors.
6. Sunrise Banks: Best for Mortgages
Sunrise Banks offers a full range of personal banking products, including personal checking, savings accounts, credit cards, and a pre-paid Mastercard. But it is best known for its Pathway2Home affordable mortgage product, as well as other mortgages with down payments as low as 3%. The bank also writes VA loans with no down payment required.
By supporting affordable housing and helping Minnesota residents get into homes of their own and begin building generational wealth, Sunrise Banks shows its commitment to socially responsible banking. Like many of the socially responsible banks on this list, Sunrise Banks is a member of GBAV, a Community Development Financial Institution, and a B corporation.
7. Clean Energy Credit Union: Best for Clean Energy Loans
Most of the banks on our list support efforts to reduce climate change, do not help fund or support fossil fuel companies, and run their organization sustainably. Clean Energy Credit Union works to fund renewable energy through personal loans for electric bicycles, solar electric systems, geothermal heat pump systems, and green home improvements. Clean Energy Credit Union also offers auto loans for electric vehicles.
While the credit union specializes in funding renewable energy and other loans, it also offers options for personal checking and savings accounts. Checking accounts offer dividends from .01% APY to 3.56% APY with a minimum opening balance of just $25 and no monthly fees if you meet certain requirements, including having a Clean Energy loan.
Savings accounts include a bank account with a 0.15% APY and a minimum opening deposit of $100, certificates, and a money market account with dividends ranging from 0.95% up to 1.61% APY, with a minimum deposit of $2,500.
As part of its commitment to green living, the credit union offers bio-based, compostable debit cards that are eco-friendly. It is also one of the few banks or credit unions on our list that offers a Carbon Zero Teen Account online, which shows your teen the carbon offsets their deposits can fund.
8. National Cooperative Bank
National Cooperative Bank offers high yield CDs, and money market accounts, as well as checking and savings accounts and business products. The bank offers an interest earning checking account with a 0.90% APY and no minimum opening deposit. There is a $15 monthly fee if the balance falls below $500.
The money market account has a high 2.28% APY, with a minimum balance of $5,000 to avoid the $25 monthly fee. You will need just $100 to open the account. You can earn a 4.34% APY on with a 12-month CD with a $2,500 minimum opening deposit.
While the bank is committed to helping its customers earn money through high interest rates, it is equally committed to its duties as a socially responsible bank. The bank has donated $8 billion to support underserved communities nationwide, and provided loans and investments of $475 million to low and moderate income families, including mortgage loans.
9. Clearwater Credit Union: Best for Previously Unbanked Consumers
Clearwater Credit Union is a certified Community Development Financial Institution and a member GBAV. While most credit unions are devoted to serving their local communities, Clearwater takes it a step further by donating $1.6 million to 290 non-profit organizations in 2022. Employees donated more than 1,340 volunteer hours within their local communities, and the credit union awarded $20,000 in scholarships to students in the credit union’s home state of Montana.
Clearwater CU offers multiple choices in bank accounts, including a basic checking with no monthly fee, a premium checking that pays dividends, and a SmartSpend checking account with a low, $5 monthly fee for previously unbanked consumers.
The SmartSpend account can help lower income individuals and families avoid the fees that come with check cashing services or prepaid debit cards. It also gives them the opportunity to avoid overdraft fees while gaining the convenience of a deposit account, debit card, and access to mobile banking.
10. Carver Federal Savings Bank: Best for Small Business Banking
Many of the banks on our list devote time and money to sustainability, equality, and other social causes. But they don’t necessarily offer the highest interest rates available in online banking today. Carver Federal Savings Bank, however, is a Black-operated, socially responsible bank that also delivers high-yield savings of 4.00% APY.
But there is a catch. You’ll need a $5,000 minimum opening deposit. This might make the Carver savings account inaccessible to many in underserved communities seeking personal checking and savings accounts. However, for those on firm financial footing who want to support a socially responsible bank, Carver’s high yield savings is a solid choice.
Beyond the high yield savings, Carver is known for an array of checking and savings products for small business owners, including a money market account with 2.00% APY and a business interest checking account.
Start-up businesses or those with low-to-moderate balances might prefer the Carver Community Business Free Checking with no minimum balance, no monthly fee, and 200 free transactions per month. The bank focuses on Black- and Minority-owned businesses as well as women-owned businesses across New York City.
Carver is a designated CDFI and has reinvested 80% of every dollar deposited into NYC communities. It also donated $149 million in New Market Tax credit and more than $259 million in leveraged loans across the New York metro area.
How to Choose Socially Responsible or Sustainable Banks and Credit Unions
When you’re shopping around for a socially responsible bank, first consider what aspects of ethical banking are most important to you. Are you looking for a bank committed to serving low income communities, or one that puts a focus on renewable energy? Maybe sustainability is the most significant aspect to finding a socially responsible bank that aligns with your values.
Of course, you also want to think about all the other elements that you would consider for your personal banking needs. These include low fees, online banking capabilities and an intuitive mobile app, early availability of your direct deposits, and a high yield savings account.
Our list of the best socially responsible banks takes all these factors into consideration and showcases banks that back up their values with investments – in their communities and in the environment.
Organizations That Support Sustainability and Social Responsibility
The best socially responsible banks often showcase their commitment to ethical banking through certifications or membership in organizations that support and reflect their values. If a bank is a member of the Global Alliance for Banking on Values, recognized as a community development financial institution (CDFI) or a Certified B corp, you know the bank has demonstrated its commitment to ethical banking.
Global Alliance for Banking on Values (GABV)
The Global Alliance for Banking on Values (GABV) is a worldwide network of socially responsible banks committed to ESG values. GABV banks focus on three pillars:
Finance change
Do no harm
Sustainable products and services
To join the Global Alliance for Banking on Values (GABV), banks must show their commitment to sustainability, and have a balance sheet of at least $50 million. They must be a full service bank and show financial stability and stable governance. Many of the best socially responsible banks are members of the Global Alliance for Banking on Values (GABV).
Community Development Financial Institutions (CDFIs)
A Community Development Financial Institution is a bank, cash management account, or credit union that is certified by the U.S. government. It’s a bank that has shown a commitment to providing banking services in low income communities and underserved communities across the U.S.
Unlike many other financial institutions, Community Development Financial Institutions focus on areas such as economic development, affordable housing and supporting small businesses in their local community.
Certified B Corp
A Certified B Corp is any organization or socially responsible financial institution that successfully balances purpose and profit. Organizations can apply for B Corp certification if they demonstrate transparency, social responsibility, and show high social and environmental sustainability standards. Banks and credit unions must pass rigorous certification standards to become recognized as a B Corp.
FAQs
Still have questions about the best socially responsible banks? Check out some commonly asked questions below.
Which banks are eco-friendly?
Many U.S. banks meet eco-friendly requirements in a variety of ways. Some, like Clean Energy Credit Union, refuse to support fossil fuel companies. Aspiration plants a tree whenever customers round up their debit card purchases to deposit into a savings account.
To find eco-friendly banks, you can look up their ESG (Environmental, Social & Governance) ratings on their websites, in their financial statements, or on a website like Sustainalytics.
Remember, ESG ratings are derived from many factors, including a company’s diversity & inclusion practices, sustainability, charitable donations, and more. You may have to dig deeper to see which banks employ sustainable practices to reduce their carbon footprint.
How Can You Determine Which Banks Are Committed to Ethical Banking?
A search on a company website should help you find the best socially responsible banks committed to ethical banking. Check online to see if the bank helps underserved communities or the unbanked or underbanked population. Ethical banks may be recognized as a community development financial institution.
What is responsible banking?
Responsible banking or ethical banking typically focuses on three key areas:
Banking access and community development
Environmental impact and climate change
Holistic social responsibility
What is an ESG bank?
An ESG bank focuses on environmental sustainability, social responsibility and ethical governance.
It was a report two years in the making — one that details how California, a state that never officially sanctioned slavery, can confront decades of policies that have kept Black residents from living in the neighborhoods they choose, being treated fairly at doctor’s visits and building generational wealth.California’s reparations task force completed its work Thursday and turned more than 100 recommendations over to the Legislature, the first work of its kind in the U.S. The nearly 1,100-page document recommends the state formally apologize and suggests how to calculate monetary reparations.Read an executive summary of the California Reparations Task Force’s report here.Read the full California Reparations Task Force report here.Here’s what the task force examined:HOUSING DISCRIMINATIONThe report recounts California policies that have kept Black families from retaining property and living in certain neighborhoods. The effects of redlining, which led to Black families being denied home loans; and eminent domain, where residents’ property was seized by the government, still linger, the report states.The panel recommended returning property unjustly seized from Black residents. It also urged lawmakers to offer property tax relief to African American homeowners living in historically redlined neighborhoods.OVERPOLICING AND MASS INCARCERATIONThe task force condemned policies and practices that have led to Black Californians being disproportionally stopped by police, killed by law enforcement or imprisoned.Recommendations include ending the death penalty, banning cash bail, requiring anti-bias training for police officers and funding education for more African American prospective lawyers. The panel also called on lawmakers to bar searches by law enforcement based on a person’s consent alone.HEALTH HARMSThe committee urged lawmakers to address disparities in maternal mortality and treatment for substance abuse. Members also called for lawmakers to set aside money to research rising suicide rates among African American youth.Another suggestion is to fund wellness centers in historically Black neighborhoods to address mental health issues and refer patients for psychiatric or medical care.PAYMENTSThe recommendations include paying Black Californians who lived in the state while certain discriminatory policies were in effect. The task force voted to limit eligibility to people descended from free or enslaved Black people living in the United States by the end of the 19th century. The panel stopped short of endorsing a fixed dollar amount for individuals. But the members recommended calculations from economists projecting the state is responsible for more than $500 billion for overpolicing, mass incarceration and housing discrimination.AGENCYThe task force recommended creating an agency to implement and oversee reparations programs and help people research their family history to find out if they may be eligible for compensation.NEXT STEPSAny policy changes must come through legislation signed by the governor. State Sen. Steven Bradford and Assemblymember Reggie Jones-Sawyer, both Los Angeles-area Democrats on the task force, have both said they plan to introduce legislation. Bradford has previously cautioned that it would be difficult to get large cash payments approved.
It was a report two years in the making — one that details how California, a state that never officially sanctioned slavery, can confront decades of policies that have kept Black residents from living in the neighborhoods they choose, being treated fairly at doctor’s visits and building generational wealth.
California’s reparations task force completed its work Thursday and turned more than 100 recommendations over to the Legislature, the first work of its kind in the U.S. The nearly 1,100-page document recommends the state formally apologize and suggests how to calculate monetary reparations.
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Here’s what the task force examined:
HOUSING DISCRIMINATION
The report recounts California policies that have kept Black families from retaining property and living in certain neighborhoods. The effects of redlining, which led to Black families being denied home loans; and eminent domain, where residents’ property was seized by the government, still linger, the report states.
The panel recommended returning property unjustly seized from Black residents. It also urged lawmakers to offer property tax relief to African American homeowners living in historically redlined neighborhoods.
OVERPOLICING AND MASS INCARCERATION
The task force condemned policies and practices that have led to Black Californians being disproportionally stopped by police, killed by law enforcement or imprisoned.
Recommendations include ending the death penalty, banning cash bail, requiring anti-bias training for police officers and funding education for more African American prospective lawyers. The panel also called on lawmakers to bar searches by law enforcement based on a person’s consent alone.
HEALTH HARMS
The committee urged lawmakers to address disparities in maternal mortality and treatment for substance abuse. Members also called for lawmakers to set aside money to research rising suicide rates among African American youth.
Another suggestion is to fund wellness centers in historically Black neighborhoods to address mental health issues and refer patients for psychiatric or medical care.
PAYMENTS
The recommendations include paying Black Californians who lived in the state while certain discriminatory policies were in effect. The task force voted to limit eligibility to people descended from free or enslaved Black people living in the United States by the end of the 19th century. The panel stopped short of endorsing a fixed dollar amount for individuals. But the members recommended calculations from economists projecting the state is responsible for more than $500 billion for overpolicing, mass incarceration and housing discrimination.
AGENCY
The task force recommended creating an agency to implement and oversee reparations programs and help people research their family history to find out if they may be eligible for compensation.
NEXT STEPS
Any policy changes must come through legislation signed by the governor. State Sen. Steven Bradford and Assemblymember Reggie Jones-Sawyer, both Los Angeles-area Democrats on the task force, have both said they plan to introduce legislation. Bradford has previously cautioned that it would be difficult to get large cash payments approved.
It is hard to beat homeownership when it comes to building generational wealth. The National Association of Realtors noted that homeowners build a net worth about 40 times higher than renters.
But, with the ever-increasing costs of our daily expenses, the ability to save money for the down payment continues to feel like it is just out of reach.