“This is home.” Omaha Organizations Help Low-Income Homebuyers as Obstacles Increase

This story is part of (DIS)Invested — a longterm Reader investigation into Omaha’s inequities.

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As Jose Castañeda walked into the living room, he shut the door behind him. He looked to his left, then his right. There were no couches or rugs on the fresh gray carpet. No pictures on the beige walls. In fact the only thing Castañeda owned in the whole house was the pillow under his arm. 

But as he spread a blanket on the floor and laid down to sleep in silence, he couldn’t help but feel lucky.

“Thank you, God,” he thought to himself. “This is home.”

Castañeda bought the 1,080-square-foot home in April 2021. Right off the South Omaha bike trail near Vinton Street, it’s the first house the 48-year-old has owned by himself. For years he struggled to find a permanent home. Sometimes he slept on the basement floor of a friend’s house when he had nowhere to go, bringing his service dog, Tiberius, who helps Castañeda, who is almost completely blind. His credit was terrible and monthly child support payments left little to nothing to save. The idea that he’d ever have a place of his own seemed unbelievable.

But now when he’s cooking eggs in the morning and listening to ‘50s girl group music, or leaning back into his soft leather couches, it’s hard to believe all this is really his.

“It wasn’t just a process to get my place,” Castañeda said. “It was a process to get myself there mentally, physically and probably spiritually, too. And now, look where I’m at now.”

Without good credit, a well-paying job or financial help, owning a home in Omaha is difficult, especially as demand increases amid a shrinking housing stock where nationwide outside investors are buying more homes than ever. To get his home, Castañeda paid $10,000 more than the asking price, the value of which had already doubled in the past 4 years. And because owning a home is one of the top ways families build wealth, lack of access can contribute to generational poverty as well as housing instability.

But solutions in Omaha exist. Whether through rent-to-own models or housing education classes, organizations offer low-cost, or free, ways for people to get on the path to a down payment, a mortgage and their own home. But it’s not an easy task.

Denise Parker, assistant director for homebuying education with Family Housing Advisory Services (FHAS) worked one-on-one with Castañeda for about a year before he was able to find a home. Parker met Castañeda through the organization’s workshops. FHAS, established in 1968 after the passage of the federal Fair Housing Act, which outlawed discriminatory housing practices, strives to eliminate poverty and homelessness in the metro area through education on subjects such as pre- and post-homebuying education as well as financial education.

In those workshops Parker said presenters go through the process of buying a home, including:

• Figuring out how much it costs to buy and own a home as well as creating a long-term budget;
• What a home loan lender will look for on a bank statement;
• The credit score a buyer should have;
• The cost of homeowner’s and other types of insurance;
• What to look for in a home inspection;
• How to understand a purchase agreement.

Parker said they serve about 200 to 300 people annually and never turn people away. Occasionally one month’s workshop will reach capacity, but Parker said they can find a spot in next month’s class. Most people walk away surprised by how much actually goes into buying a house.

“I can’t say how many people take the workshop and they’re just amazed, like, ‘I can’t believe this’ ‘This is so great,’ ‘Thank you so much.’”

Castañeda was one of those people. His coworker at Outlook Nebraska, which manufactures sustainable janitorial materials like toilet paper, told Castañeda about the classes when they found out about his housing situation. 

Castañeda’s family moved to Omaha in 1992 when he was 18 to get away from South Central Los Angeles and gangs like MS-13. In Omaha Castañeda stayed out of trouble, but his family had little money, and work was hard to come by without a high school diploma. In 2001 he owned a home with his then-wife until their marriage ended. A few years later he was in a car accident that left him nearly blind. Over the years his financial situation deteriorated as he bounced from rental to rental, and his credit score dipped to a “poor” rating. At Outlook Nebraska he makes about $13.75 per hour, he said, and also receives money every month through social security, but child support payments usually leave him with a fraction of that check.

Even still, he didn’t think he needed FHAS’ homebuying class.

“My reaction was like, f**k this shit. For real,” he said. “Like, why would I have to go? You know? But I went out and I was there for eight hours. And I was like, ‘Oh, OK. Cool.’”

What turned Castañeda was realizing not only how much he didn’t know, but also how achievable owning a home could be if he stayed on track with FHAS’ program. Through mentoring, Parker helped him get his debt under control, budget his spending and bring up his credit score. By completing the class he also received a certificate of completion that helped him earn grants through the Nebraska Investment Finance Authority, an organization created by the Nebraska Legislature in 1983 to make housing more accessible. Castañeda was able to get about $5,000, which, added to the $10,000 he saved, gave him enough for the down payment on his $155,000 one-story home.

“I felt pretty confident. I can’t recommend [FHAS enough]. From my heart,” he said. “If I did it, I think anybody can do it.”

But not everyone is successful. Even if people penny pinch, bring their credit score back over the cliff and get grants, Parker said it’s not guaranteed someone will find a home.

“I just talked yesterday to a client who’s been going through this since 2016,” she said. “You know, they get on track and … then life happens and things keep them back down. And then their credit has been suffering and so they have to build that back up.”

The problems are exacerbated as Omaha, and most of the nation, faces a shrinking supply of more and more expensive housing. Last year, investors bought a record number of homes in the nation’s largest cities, purchasing 30% of homes in Black neighborhoods — 2.5 times more homes than in other zip codes according to a Washington Post analysis of data from realty company Redfin.

Parker said affordable, low-income homes that don’t need costly repairs are extremely hard to find under $100,000. Most good homes with low price points range from $150,000 to $225,000, she said. But even those are hard to grab as more middle class people look for cheaper options as rising home prices outpace income increases, according to the Wall Street Journal. Homes in Omaha spend an average of nine days on the market before they’re snatched up, according to data from Redfin.com in early February.

Recently nonprofits and politicians have highlighted the issue with some figures putting Omaha’s affordable housing shortage at 80,000 units. While organizations such as Holy Name Housing, Habitat for Humanity of Omaha and others have prioritized building accessible homes for low-income people, the demand is far outpacing production. Federal COVID-19 relief dollars will probably be used to address housing issues, but how much will be spent and what the money will go toward is still up for debate. 

Parker’s hopeful Omaha and Nebraska will give its housing market the shot in the arm it needs, especially for people in lower income brackets.

Because owning a home isn’t just about having a place to live. Parker said when FHAS asks why people want to buy a home, they get a swath of answers.

“Every time, repeatedly, they want to build wealth. They don’t want to give all of their money to a landlord. [They say], ‘I want something to go to me.’ That’s always brought up. They talk about having more freedom, that they can have whatever they want in their house and decorate it the way they like it.”

For Castañeda, he wanted all of the above. He felt humiliated sleeping on a basement floor as a man in his 40s. He drank, missed work and hit rock bottom in 2019, he said. He could have easily lost his job, but his bosses and coworkers were patient. So was Parker, who took his calls often and at all hours of the night to talk through houses he toured.

It makes him emotional to think where he’s at now — hanging an expensive, authentic Los Angeles Lakers Lebron James jersey in his own closet or walking around his finished basement and imagining one day building a master bedroom suite. Even the little things get to him, like the feeling of a clean home or the smell of a batch of freshly blended salsa. At the end of the day, it’s all his. And right now nobody can take that away from him.

“If you come from where I’m coming from, I mean look at this,” he said, spreading his arms just inside the front door of his home. I mean, I’m not living rich. But I’m living comfortable.”

contact the writer at chris@thereader.com