A Plan To End Homelessness

In researching what to do about my own situation it seems that the banking system is stacked against those who could benefit most by getting a home loan. Zero or almost zero down programs still exist, but the banks want to lend at ridiculous debt to income ratios of 15%-20% if you have bad credit.

It is true that the mortgage payment on a house at the low end of the market (say $250,000 for a 5br/2ba place in San Jose) is the same or less than the rent for the same place on the open market. In particular, if you could pick up a 5br/2ba place as a foreclosure for 50 cents on the dollar, now you are looking at a mortgage payment of $600 per month for five people, or $125 per month per person. You could use cash assistance (GA) to pay for that if necessary.

This would be a better program than the one that already exists in San Jose where you can stay in a house for 6 months at a rent of 30% of your income or $350, whichever is less, but you are packed in like sardines at two people per room. To get on such a program you need to be referred through various agencies, starting with the dept of rehabilitation, then Catholic Charities and then you can get a referral to the housing agency.

My plan would give a homeless person 20% ownership of the 5br house they are staying in. If they got evicted for some reason, or they wanted to move up and get their own place all to themselves, they could simply rent out their room for the market rate of $500 per month and live somewhere else at market rates.

Any thoughts or suggestions would be welcome.