Jay Klein

Institute on Disability

University of New Hampshire

This article describes the history of a movement begun in the early 1990s that has made it possible for hundreds of people with disabilities throughout the United States to become homeowners. The article begins by highlighting the relevant funding sources, legislation, and policies that have influenced opportunities for people with disabilities to become homeowners. It concludes with a discussion of the accomplishments and impact of the homeownership initiative nationwide.

Keywords: Homeownership; Legislation; Funding; National Home of Your Own Alliance

Beginning in the 1960s, when media attention first began to focus on the horrific living conditions in institutions for people with disabilities, a national movement to replace state-run institutions with community-based housing options began to gain momentum. Despite tremendous efforts by most states to transition people from institutions to community housing, a large percentage of people with disabilities continue to live in places where they are excluded from ordinary life. Most community housing options available to individuals with disabilities who need personal assistance are congregate settings; such as nursing homes, intermediate care facilities (ICFs), group homes, apartment complexes, psychiatric facilities, or adult foster care. These options are nearly always owned and controlled by agencies that also control the funding sources. Individuals not only must choose from these limited options, but they also typically face stringent entrance criteria and long waiting lists.

The range of community housing alternatives available to people with disabilities has been limited further by a lack of affordable and accessible options. Because many people with disabilities have limited financial resources with which to own or lease their own homes, it is frequently necessary to identify and combine complex financial mechanisms to bridge the gap between their income and the real cost of housing. These financial mechanisms may include a combination of low interest rate financing, government or private grants, and/or rental subsidies. Even when community housing is made affordable, it is often older and architecturally inaccessible because of narrow doors, limited space for wheelchairs to maneuver, non-accessible bathrooms, countertops and cabinets at fixed and inaccessible heights, and one or more steps at entrances.

As individuals across the country began to explore the use of funding mechanisms to make housing both affordable and accessible, they also began to explore the idea of homeownership. Homeownership for people with disabilities has only recently gained acceptance. This acceptance has occurred because strategies to circumvent traditional hurdles to homeownership, such as developing a credit history, saving money for a down payment, and documenting a stable source of income have been demonstrated by many individuals across the country. These demonstrations have resulted from the efforts of a pioneering group of people with disabilities, their families, advocates, and professionals. While homeownership is not the answer for everyone, it is one way for many people with disabilities to gain greater control over their lives and to be seen as valued citizens, neighbors, and taxpayers.

The purpose of this article is to describe the history of the homeownership movement begun in the early 1990s, a movement that has made homeownership possible for hundreds of people with disabilities throughout the United States. Next, relevant legislation, funding sources, and policies that have impacted the ability of people with disabilities to become homeowners are highlighted followed by a discussion of the accomplishments and impact of the homeownership initiative nationwide.

Until the late 1980s, nearly all community housing available to people with disabilities that needed personal assistance linked services and housing together. This link created a treatment model that made it extremely unlikely that persons receiving assistance would be able to exercise choice about their living situations. That is, the assistance a person needed and received was determined by the place where he or she lived. Thus, changing needs for assistance necessitated a change of residence. The system, by design, denied people with disabilities who needed assistance the opportunity to establish roots in their communities [20]. During a housing symposium sponsored by the University of New Hampshire's Institute on Disability in 1989, participants concluded that when housing was owned and controlled by service providers, people developed neither a sense of ownership nor a feeling of "home" about where they lived [8]. Participants further concluded that, "the human services system, through its provision of specialized, segregated services and treatment, has traditionally separated people from their communities. If individualized housing is to be successful, social services will need to change their focus and learn to connect individuals to their communities" [8, p. 3].

In 1989, Nerney and his colleagues [24], analyzed the costs of providing community housing-based housing services in Nebraska, New Hampshire, and Michigan. They analyzed the scope of residential services across the three states and concluded that the least expensive option was family or adult foster care. When costs associated with various community residence alternatives (e.g., group homes) were analyzed, the authors found that the costs were higher when persons with severe disabilities were grouped homogeneously. That is, if persons with severe disabilities lived together, the costs were greater than when they lived with persons with less significant disabilities or in individualized living arrangements. Even though family or adult foster care arrangements were much lower in cost than institutions and community residences, these options still required individuals to live as guests in someone else's home [22]. By the 1990s, these findings, along with data from other similar studies, clearly indicated the need for a change in housing policies and practices throughout the United States [4].

The idea of homeownership for people with disabilities actually took seed in the early 1970s with the establishment of the independent living movement that advocated for the equal inclusion and participation of people with disabilities in all facets of society. In the United States, the term normalization endorsed and promoted by Wolfensberger [41] embodied these changes in attitudes, practices, and policies toward citizens with disabilities. Wolfensberger defined normalization as "the utilization of culturally valued means in order to establish and/or maintain personal behaviors, experiences, and characteristics that are culturally normative or valued" (p. 28).

It was from these early independent living efforts that the concept of "supported living" emerged in the 1980s. Supported living is a community housing option that: (a) is chosen by the individual with a disability and shared with others at the person's discretion; and (b) is not owned by the agency or service provider. Supported living also ensures that people are members of their community, that an individualized support plan is created with each person, and that this plan is flexible enough to change with his or her changing needs and abilities [4, 20].

In 1990, a national survey of people with developmental disabilities was conducted for the Administration on Developmental Disabilities (ADD), U.S. Department of Health and Human Services (HHS) [1]. A comprehensive sample of all Americans with developmental disabilities was sought. Information was obtained from approximately 13,075 face-to-face interviews with people with developmental disabilities, an average of 250 people per state. The 1990 National Survey indicated that people with developmental disabilities who own or lease their own homes were considerably more satisfied with their homes, the services they received, and their lives in general than those people who lived in housing owned and controlled by others. Despite the findings that respondents clearly preferred smaller, community options, such as supported living and homeownership, nearly 25% of all adults with developmental disabilities surveyed lived in group homes; an additional 26% lived in institutions and nursing homes; and only 18% owned or leased their own homes.

In July 1991, in response to the findings of this survey, ADD released a request for proposals to fund a national initiative to foster new and expanded approaches to community housing which would be more consistent with having a home of one's own. ADD wanted projects to generate approaches that would: (1) separate where one lives from the services and supports one receives; and (2) tailor supports to the individual's preferred residence, whether it be a purchased home, rented apartment, or some form of shared housing. They asked that support and technical assistance be offered to people with disabilities and their families in securing homes of their own. ADD funded demonstration projects in three states: New Hampshire, Massachusetts, and Maryland.

In 1993, ADD continued its national commitment to homeownership for people with developmental and other disabilities by entering into a five-year cooperative agreement with the Institute on Disability at the University of New Hampshire. The result was the creation of a national information and technical assistance center on homeownership, control, and personalized support. From its inception, the focus of the National Home of Your Own Alliance (Alliance) was on designing and implementing strategies for increasing opportunities for people with developmental and other disabilities to own and control their homes.

Specifically, ADD contracted with the Alliance to build coalitions on homeownership in 23 states over a five-year period. To accomplish this goal, the Alliance sought states interested in receiving technical assistance through a national request for proposals. In order to receive technical assistance from the Alliance, states responding to the Alliance's request for proposals were required to build coalitions of people with disabilities, families, representatives of financial institutions, housing and disability organizations, and human services providers. They were also required to raise matching funds. Once selected, state coalitions developed a plan that detailed the recruitment and inclusion of persons with disabilities in planning for and attaining person-owned and controlled housing and supports. Finally, states were required to create steering committees to implement their state’s plan. Strategic plans developed by the steering committees defined each state's unique initiative and demonstration project in more detail.

By collaborating with a coalition of financial institutions, housing organizations, and human service agencies in each state and nationally, the Alliance helped to identify resources to assist people with disabilities to acquire suitable homes and to structure the ongoing counseling and support needed to sustain ownership. As part of their strategic plans, each state established outcome measures to evaluate the effectiveness of their work. Outcome measures included, for example, the number of individuals owning their homes, policy issues that needed to be addressed, ongoing technical assistance needs, and public awareness needs.

A 1994 survey conducted by the Alliance found that homeownership programs and activities across the country were in various stages of development. This survey presented a snapshot of 14 homeownership programs in 12 states [21]. Subsequently, 26 state initiatives responding to a 1998 survey by the Alliance to determine the state of the states in homeownership for people with disabilities [23] reported that they were able to sustain their initiatives beyond the start-up and demonstration years. Therefore, the history of the homeownership movement is just beginning.

It is estimated that between 1993-1999, the 23 states affiliated with the Alliance assisted more than 900 individuals to purchase homes [21, 14, 34]. To accomplish these outcomes, states received technical assistance from the Alliance to secure private funds not previously available to people with disabilities.

In a 1998 evaluation of the Alliance conducted by the Human Services Research Institute (HSRI) [34], 15 state coalitions reported accessing over $20 million to assist people with disabilities to become homeowners. These funds were used to: (1) buy down mortgages; (2) provide soft second loans for down payments, closing costs and rehabilitation; (3) fund program operating costs; (4) provide homeowner counseling; and (5) offer below-market loans or grants to assist people with disabilities to own homes [34]. The 15 states reported using monies accessed through Fannie Mae (5.3 million), HUD HOME (3.4 million), Housing Finance Agencies (5.32 million), Federal Home Loan Banks (1.26 million), Development Disabilities Planning Councils (3.49 million), and private mortgage companies (1.74 million) [21, 34]. In addition, Fannie Mae created HomeChoice, the first national secondary market mortgage product specifically designed to address the needs of borrowers with disabilities and low-incomes. Through HomeChoice, Fannie Mae has made over $175 million in mortgage funds available to people with disabilities and low-incomes across the country.

The funding sources that have had the most impact on providing opportunities for homeownership to people with disabilities are HomeChoice, the Federal Home Loan Bank, the HOME Program, and Housing Finance Agencies. Each of these sources is briefly described below.

3.1 Fannie Mae HomeChoice. HomeChoice is a mortgage product designed to accommodate the needs of individuals with disabilities and families who have a child with a disability. Fannie Mae began the product in 1996 with a $50 million commitment to this single-family underwriting experiment. As of January 2000, HomeChoice was being piloted in 20 states and the District of Columbia. In developing this product, Fannie Mae incorporated strategies used by the Alliance including a request for proposal process and a requirement to develop a statewide coalition. In addition in 1999, Fannie Mae committed $125 million to Wisconsin to help people with disabilities and low-incomes achieve homeownership and obtain affordable housing using enhanced HomeChoice criteria [13].

3.2 Federal Home Loan Bank. The U.S. Congress created the Federal Home Loan Bank (FHLB) system in 1932 to promote home financing. There are now 12 FHLBs in various cities around the country. These banks do not lend money to individuals; rather their role is to loan money to lenders specifically involved with housing finance. In particular, they are interested in ensuring that lenders offer financing to low-income buyers. To do this, FHLB member saving institutions in local communities file grant applications with the FHLB on behalf of community organizations [39].

3.3 HOME Program. The U.S. Congress created the HOME program in 1990 with the passage of the HOME Investment Partnership Act [16]. The HOME program provides affordable housing funds through the U.S. Department of Housing and Urban Development (HUD) to states and local jurisdictions. HOME dollars are given to states and local communities specifically for increasing affordable housing opportunities [39].

3.4 Housing Finance Agencies (HFAs). Every state (except Kansas and Arizona) has a Housing Finance Agency. These agencies were created to address the affordable housing needs of low-income persons by financing the development and preservation of affordable homeownership and rental housing. State HFAs are authorized to sell tax-exempt bonds to raise funds for home construction, home purchase, and in some states, for home improvement loans [, 9].

The emphasis on affordable housing in the United States began with passage of the Housing Act of 1937 [17]. This legislation established the first federal framework for government-owned affordable housing by creating a vehicle to send funds to State and local Public Housing Authorities. These federal funds were used by public housing authorities to build, own, and operate affordable housing [38,].

A more concrete example of the government's concern in the housing business began 35 years later with the creation of state HFAs. Most HFAs were created between 1972 and 1981 and had statewide authority to help finance, preserve, and develop diverse types of affordable housing for low- and moderate-income Americans. The role of HFAs in the United States has become more significant as the federal government has decreased its level of involvement in both funding and policy making, placing greater emphasis on local control.

Section 504 [31] of the Rehabilitation Act of 1973 [28] requires recipients of federal funds to make their programs and activities, including housing programs, accessible to people with disabilities. In 1988, HUD issued 24 CFR Part 8 Nondiscrimination Based on Handicap in Federally Assisted Programs and Activities that implemented Section 504 for HUD funded programs [36]. Specifically, the regulation issued by HUD ensures that "no otherwise qualified person with a disability shall, solely by reason of his or her handicap, be excluded from the participation in, be denied the benefits from or be subjected to discrimination under any program or activity receiving funds from HUD" [36, 38].

Title VI of the Civil Rights Act of 1964 [5] was enacted to prohibit discrimination in federally assisted programs including housing. The Fair Housing Act (FHA), originally passed as Title VIII of the Civil Rights Act of 1968, is the primary legal tool for redressing housing discrimination [ 6, 11]. In 1988, Congress passed the Fair Housing Amendments Act (FHAA) [12], significantly expanding Title VIII. The FHAA was designed to ensure "no person shall be subjected to discrimination because of race, color, religion, sex, handicap, familial status or national origin in the sale, rental or advertising of dwellings, in the provision of brokerage services, or in the availability of residential real-estate related transactions" [12]. This landmark civil rights legislation marked the acknowledgement by the Federal government that persons with disabilities were frequently victims of discrimination in housing. Furthermore, Congress recognized that simply to outlaw discrimination on the basis of disability would not adequately address the problem of the lack of affordable, accessible housing options. Therefore, the law included two key provisions to increase the availability of accessible housing: (1) landlords must allow tenants to make reasonable architectural modifications to their homes at their own expense, provided that any modifications that would impair the use and enjoyment of future tenants be restored to the original condition; and (2) all ground floor dwelling units in multifamily housing designed for first occupancy on an accessible route in buildings without elevators and all dwelling units in buildings with elevators, must meet minimal accessibility standards [12, 38].

Collectively, the Americans with Disabilities Act of 1990 (ADA), [2] Section 504 [31] and the FHAA [12] mandate: (a) equal opportunity and community integration; (b) stricter structural accessibility requirements, particularly for existing housing; and (c) new approaches to expanding housing opportunities for people with disabilities [2]. Both Title II (Public Services) and Title III (Public Accommodations) of the ADA protect all housing created, developed, managed, leased, owned, and planned by every state, local, county, and local public entity [2]. This includes state HFAs, state and county services, and publicly subsidized housing coalitions and projects [15]. The Title II regulations require the political entities to "give priority to those methods that offer services, programs, and activities to qualified individuals with disabilities in the most integrated setting appropriate" [2, 15] Thus, people with disabilities must always have the right to participate in the service (and to apply for housing) that is provided to the general public [2, 15]. The ADA also clarifies the Section 504 [31] and FHAA [12] requirements by being more specific in guidance. For example, providers must find means or services that permit the person to receive the available goods, services, facilities, etc., in the most integrated setting possible [2, 15].

5. Relevant Policies

In June 1999, an historic judgment that enforced the housing provisions of the ADA was rendered in the United States Supreme Court case of Olmstead v. L.C. The case involved two Georgia women, Lois Curtis and Elaine Wilson, both of whom had been labeled with mental retardation and mental illnesses. The women had been forced to stay in a state institution in Georgia for many years, even though human service professionals and advocates had said they could receive appropriate services and care in their communities. In its 6-to-3 decision, the court said, "states are required to provide community-based treatment for persons with mental disabilities when the state's treatment professionals determine that such placement is appropriate" [25, 26]. The Olmstead ruling applies to people of all ages with all types of disabilities in all institutions and all state programs. Specifically, the ruling applies to people with mental and physical disabilities, people in state institutions, Medicaid recipients in private nursing homes, and people who are living at home and are at risk of entering institutions if they do not receive proper services.

Dr. Donna E. Shalala, the Secretary of the U.S. Department of Health and Human Services, in a January 2000 letter to all governors said, "unnecessary institutionalization of individuals with disabilities is discrimination under the Americans with Disabilities Act". Dr. Shalala told the governors she expected them to evaluate "all individuals with disabilities residing in institutional settings" (e.g., state institutions, ICFs, nursing facilities, psychiatric hospitals, and residential service facilities for children) to see whether their needs more appropriately could be met in their communities [, 26].

In view of the increasing obligations of state governments with the Olmstead decision, there is greater pressure on local economic institutions to invest in the development of certain communities in the form of mortgage lending, donations, and branch acquisitions and mergers. In fact, although not widely known among many citizens, the Community Reinvestment Act (CRA) was established in 19777] as part of the Housing and Community Development Act of 1977, Public Law 95-128 [19]. The CRA established the importance of financial institutions in meeting the credit needs of community members, particularly those in low- and moderate-income neighborhoods. This act can serve as a tool to assist financial institutions and those concerned about housing opportunities for people with disabilities to form mutually beneficial partnerships.

Four additional policy initiatives can increase the opportunities of people with disabilities to own their homes. These vehicles, (i.e., Consolidated Plan, Live-in Care Provision, Homeownership Option, and Individual Development Accounts) are described below:

1. HUD requires all states and certain local government jurisdictions to submit an annual report called a Consolidated Plan. Each eligible unit of government must submit a comprehensive strategic plan every 5 years with an annual update. In order to receive HUD funding, the Consolidated Plan must document the need for requested funds, market conditions, housing strategies, and must outline and specify how monies will be spent [39]. It is anticipated that in the future, the housing requirements of people with disabilities will need to be highlighted extensively in Consolidated Plans throughout the nation.
2. In 1990, Congress amended the Medicaid Home and Community-Based Services (HCBS) waiver statute (i.e., 1915 (c) (1) of the Social Security Act) [33] to allow states to claim federal Medicaid reimbursement for "room and board" (i.e., food and shelter) costs associated with having an individual live in a waiver recipient's home and providing personal support. This provision provides an exception to the general rule that excludes federal Medicaid payments from covering the cost of room and board expenses. The amendments allow the use of Medicaid funds to pay a portion of a recipient's lease or mortgage payment and for expenses related to the room of an unrelated caregiver residing in the home of the waiver recipient [35]. The live-in-care provision makes it possible for individual states and their provider agencies to reallocate resources, allowing funds to be used to assist Medicaid recipients to secure homes of their own. By facilitating this reallocation, states may use a cost-neutral way to assist people whose options would otherwise be severely limited.
3. In 1974, Congress added Section 8 to the Housing Act of 1937 [18]. This new section provided subsidies to private owners to help pay the rent for low-income families in their properties [ 38]. In 1992, President Bush signed Public Law 102-550, "The Housing and Community Development Act of l992." Section 185 of this Act amended Section 8 of the Housing Act of 1937 by adding a new Subsection, 8(y), entitled "The Homeownership Option." [30] Subsection 8(y) authorizes public housing agencies (including Native American housing authorities) to make Section 8 Vouchers available "for the purchase of a home owned by one or more members of eligible families." [30]. Although Section 8(y) was originally enacted by section 185 of the 1992 act, the Section 8 Homeownership Option was never implemented because the program was unworkable without statutory change. Section 8(y) was further amended by section 555 of the Quality Housing and Work Responsibility Act of 1998 that included the needed statutory changes [32]. In April 1999, the Section 8 Homeownership Program Proposed Rule appeared in the Federal Register for comment [37]. The rule that implements Section 8(y) is expected to be finalized in 2000. Once the rule is implemented, people with disabilities that have very low-incomes will have access to a subsidy that will allow them to obtain affordable housing in many communities throughout the United States [].
4. In 1996, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 [27], a welfare reform bill that established the Temporary Assistance for Needy Families (TANF). This bill permits states to establish Individual Development Accounts (IDAs) using TANF funds. IDAs are dedicated savings accounts, similar in structure to Individual Retirement Accounts (IRAs) that can only be used for purchasing a first home, education or job training expenses, or capitalizing a small business. IDAs received additional funding through The Assets for Independence Act (AFIA), an initiative signed into law in 1998 by President Clinton [3]. The initiative creates a five-year, federally funded national IDA demonstration that will establish 50,000 IDAs with an appropriation of $25 million per year. Legislation currently pending before Congress, The Savings for Working Families Act of 2000 [29], addresses barriers that have excluded many people with disabilities from using IDAs as a means of saving money. Given appropriate resources, people with disabilities will develop assets and in turn gain economic independence through home purchase, employment and post-secondary education. IDAs can serve as an excellent opportunity to improve the economic independence and stability of people with disabilities.

Over the past decade, homeownership opportunities for people with disabilities have increased tremendously. Preliminary data indicates that, unlike the community resistance of the recent past to group homes, little resistance to homeownership by people with disabilities has been expressed publicly [ 40]. Because single-family and owner occupied homes are not licensed rehabilitation facilities, they are not burdened by stigma typically associated with other community-based living options for people with disabilities. Indeed, since most homes purchased by individuals with disabilities and low-incomes are existing homes, the impact on neighborhoods is often negligible.

Homeownership provides a vehicle for achieving a number of the ideals that people with disabilities, their families, advocates, and professionals have labored long to achieve. Owning a home is culturally acceptable, socially typical, and status enhancing. In addition, homeownership provides a vehicle for creating identification with and similarity between persons who have disabilities and other community members. In short, homeownership moves people closer to full citizenship because it offers opportunities for more, and richer, participation in community life. Finally, homeownership by people with disabilities may also be viewed positively by members of the community because the economies of communities may reap the benefits of homeownership through property taxes and increased business.

Throughout the United States, homeownership initiatives have confirmed the importance of building partnerships between financial institutions, housing agencies, and organizations involved in service provision. As people with disabilities, family members, and service providers work more consciously at assisting people to be included in their communities, they have learned more about the dynamics of affordable and accessible housing. Housing agencies and financial institutions have learned more about the funding mechanisms and service systems that overwhelmingly pattern and control the lives of people with disabilities who have low-incomes. New partnerships and a fresh openness have significantly impacted changes in policy and have begun to provide strategies to overcome barriers experienced by people with disabilities who want to own their own home.

Homeownership initiatives have demonstrated how federal, state and local housing subsidies can be structured and blended to assist people with disabilities to purchase homes. By focusing on the housing needs of individuals, affordable and accessible housing has become attainable by more people. The flexible underwriting criteria provided by Fannie Mae, HFAs, the FHLB, and numerous other mortgage lenders, private banks, and housing organizations continue to make it possible for individuals who depend on public benefits and do not have savings or established credit to qualify for loans and become homeowners. Through homeownership, people who had been excluded from the housing market for most of their lives now have an opportunity for the stability owning a home can offer.

Over the past thirty years, people with disabilities and low-incomes and those working on their behalf have made significant impact on daunting policy, legal, attitudinal, financial, and societal barriers to homeownership. Increasingly, people with disabilities are living in their own homes and receiving the assistance they need to live as valued members of their communities. Funding provided for homeownership from a variety of sources, changes in the underwriting standards of mortgage lenders, relations among affordable housing organizations, and the experiences of people with disabilities, families, and service providers now familiar with homeownership will have desired long-term outcomes. During the next decade, people with disabilities will have many more opportunities to join with their communities and neighbors in exciting new ways through homeownership.