GRACE in Action acquired its first affordable house on October 8, 2021. We celebrate this milestone as the culmination of years of work, growing out of a vision of a small group of committed people of faith who believed that they could actually make a difference in addressing the problem of homelessness in the nation’s capital. It is a vision that began as a hazy dream back in 2016, when several people from Capitol Hill United Methodist Church began to meet under the name of the Housing Justice Task Force. By 2019, that dream took on the goal of acquiring housing and making it available as affordable housing for those facing high risk of housing insecurity. GRACE in Action was incorporated in June of 2019 to be the nonprofit community development organization that would be responsible for raising the funds and acquiring the housing that would serve those at risk of homelessness.
We understood that we alone were not going to solve the problem of homelessness. However, we believed that we could make a difference in a way that would model for others what could be accomplished by a small group of committed people. We believe that our goal of creating housing first would both affirm the dignity of those experiencing housing insecurity and enable them to operate from a secure home to address other challenges they may face. We also recognized that we would need to partner with social services providers who would ensure that families receive the supportive services to which they are entitled while living in the affordable units we would provide. By February of 2020, GRACE in Action was recognized as a tax-exempt charitable organization and we began fundraising in earnest to acquire our first property.
For those not familiar with the DC housing market, we share with you the fact that DC is one of the most expensive housing markets in the country, with one of the largest gaps between the numbers of affordable units and low-income households who need such affordable housing. The pandemic lockdown that started in March 2020 set off a spike in demand for housing, thereby leading to record level price increases in the cost of housing. It was this most daunting market situation into which we began our search for affordable housing. But this was not the most challenging aspect of our search.
We soon learned that as a corporation, GRACE in Action would have to operate by a different set of rules than would an individual home buyer. As a NEW commercial entity, GRACE in Action had no credit record, no assets, and no source of revenue apart from the property that we would acquire and in turn, rent out. Our business plan of acquiring property at below market rates, fixing them up and renting them out to households who would pay by a housing voucher was not deemed to be a viable model by several commercial banks who we approached for a mortgage. Nonprofit lenders were more open to our model and believed in our mission, but they were still unwilling to take the kinds of risks that lenders would take with individual home buyers. Bottom line was that only one lender would even consider offering us a mortgage without a co-signer (such as the church, which has a substantial and reliable revenue stream). And the requirement was for us to have a 40% down payment with a higher interest rate (for commercial loan relative to personal loan). Knowing that we would have to spend roughly $500,000 to acquire an “affordable” unit in DC, rather than having to raise $50,000 for a ten percent down payment, we had to raise roughly $200,000 (40%) to qualify for a mortgage. This would mean a LOT more fundraising was needed up front!
But never underestimate the value of a worthy dream! People responded to further fundraising appeals with kindness and generosity. We received small grants and offers of services from professionals in the housing market. (We are SO grateful for all those professionals and corporate sponsors on our corporate donors page). And then, as an answer to our prayers, an anonymous donor stepped forward with a truly transformational gift. This gift set us beyond our goal and made it possible for us to acquire our first unit. And, more on this to be announced shortly, but an additional gift in the form of a secured match will enable us to make our second acquisition in the near future.
We are most grateful for all those who have believed in the dream and supported us on this journey. And we give thanks for the many gifts of services we have received from our corporate donors and our banking partner. We are having a house blessing to prepare for the family whose life will be transformed by living in our beautiful home. We hope to welcome these residents early in the new year. And we are most grateful to you, our donors, for sharing in the dream that we can make a difference in the lives of those experiencing severe housing insecurity. Thank you for walking in faith with us on this journey.
Grace In Action 