Four years in the making, the Kotarski family finally received the Christmas gift they had been wanting for some time: a new home in northern Michigan. After spending over 3-years living with family and saving up their money, Jennifer and Robert Kotarski and their four children were about to stumble on several different programs to assist with the acquisition of their new home.
The Kotarskis were approved for a mortgage through the USDA Rural Development’s Section 502 Direct Loan program, a program funded directly by the federal government, which allows applicants meeting specific income requirements the funding necessary to purchase a home. Because homeownership classes were required as part of this loan, the Kotarskis called Northwest Michigan Community Action Agency (NMCAA), in Traverse City. It was at this time the family heard about another program, Individual Development Accounts (IDAs).
“IDAs are a matched savings program that help customers save for a down payment, closing costs or principal reduction over a set period of time while improving credit, attending budget counseling and financial fitness education,” said Karen Emerson, manager of the Financial Management Services program at NMCAA. Since 2001, NMCAA has enrolled over 500 eligible participants into the program. More than 350 of them have successfully purchased either their first-time home, started or expanded a business, or completed their post-secondary education.
After saving a regular monthly amount for two years (that is determined by working on a household budget at the start of the program), the Kotarskis savings were matched and the combination of their savings and match dollars were enough for a down payment on their home.
During their stay in the IDA program, the family was introduced to HomeStretch, another housing organization in the area that serves 5 different counties. HomeStretch has participated in building or rehabilitating affordable housing in both homeownership and renting situations, including a neighborhood-style development south of Traverse City where the Kotarskis found their home.
“It took a long time, and everything happened by accident,” Jennifer Kotarski stated. “I didn’t know about these programs. I learned about the IDA program through asking about the homebuyer education classes for the Rural Development loan. The homebuyer education classes brought me to HomeStretch.”
“Finding out about the programs was the hardest thing, but if you can wait (through the approval processes), it’s worth it. Even when it’s frustrating, there is help out there and people who want to help you.”
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