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From Foreclosure to Homeowner

Lifelong Washington, D.C. resident, Barbara Gray, never thought she would be able to be a homeowner again.

After her home was foreclosed while going through a divorce, her credit score plummeted to a devastating 560, putting her in the high risk category for loans. She wasn’t eligible for a credit card, let alone a home mortgage loan. And she had no savings for a downpayment.

It was then that Barbara heard about a credit counseling program with the Capital Area Asset Builders (CAAB) – a CFED partner. She quickly enrolled and began taking the necessary steps to improve her credit score, including completing a six-week homebuyers program.

In a short time, Barbara was able to boost her credit score to an amazing 800 – qualifying her for a home mortgage on preferred terms.

To help save for her new home, she also signed up for an Individual Development Account (IDA). IDAs are matched savings accounts that help low-income people save toward the purchase of a lifelong asset, such as a home, a college education or a small business. For every $1 that the participant saves, they are matched or given $3 more.

“The motto was ‘Save, Save, Save’ and that is what I did,” Gray said. “I was determined to be a homeowner so I cut costs everywhere and the money that I would usually spend on my nails or eating out was put into my IDA account.”

Barbara soon became the homeowner of a three bedroom, detached townhouse.

“It feels good to go home to a place where I feel at home,” Gray added. “I know that if it wasn’t for the IDA program, I would not be where I am at today. Not only did it help me clear up my credit score, it showed me that with determination, I could save and reach my goal.”