It’s not often that a South Memphis native boasts about planting roots in North Memphis. But, Mike Daniels is an exception. Daniels is a new first-time homeowner thanks to Frayser Community Development Corporation's (FCDC) new Home Ownership Campaign.

Launched in March 2017, the campaign was created to increase the number of homeowners buying in Frayser by raising awareness of housing opportunities among renters like Daniels. When the campaign kicked off, 90 percent of purchasers in the area were investors or landlords, largely from out of state. To-date, the campaign has raised the average number of owner-occupant purchases in the area from four per month to 10 per month.

FCDC, founded in 2000, is a nonprofit agency working to improve housing and stimulate commercial and economic growth in Frayser, a nearly 20-square-mile area in North Memphis.

Daniels arrived in Frayser by way of an Alpha Omega Veterans Services program that offered him work as a cook and an apartment in the Medical District. After decades of renting apartments, a friend told Daniels’ he could have more space renting a house from FCDC.

In 2014, Daniels started renting from FCDC. In 2017, Daniels expressed to FCDC that he was ready to transition from renter to buyer. The agency guided him through his home loan qualifications, IRS payments, child support debt, job lay-off, and credit score maintenance. Steve Lockwood, executive director of FCDC, took time to personally identify and tour properties with Daniels along the way.

“[FCDC was] patient with me. If you just show them you are putting in a little work, they will go the extra mile,” Daniels explained.

As Daniels continued his home search and qualification process, Lockwood found a home for sale across the street from the FCDC property Daniels was renting. Daniels toured the property with Lockwood and fell in love. Lockwood explained that FCDC could buy the home, make cosmetic updates and help Daniels qualify to buy. 

“I just kept telling him we weren’t going to get frustrated and we would get through it,” Lockwood said.

And, they did. FCDC purchased the home this summer and allowed Daniels to rent until he was able to buy in October. Daniels now enjoys the 3-bedroom, 1.5-bathroom Frayser home with his wife, children and two grandchildren.

“I got a great rate. Everything just worked out and it was worth the wait,” Daniels said.

The house at 3309 Riney was formerly blighted and condemned. The Frayser CDC renovated and put it on the market. (Averell Mondie)

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“We don’t have a guide, but we’re trying to get people in houses, not just in Frayser but in Memphis,” Lockwood said. "Memphis has been listed as a great place to invest in real estate, so we’re getting international attention. And while it’s good for the people doing it ethically, it’s not good for those who are being slimy and causing residents to lose out on owning in their own neighborhood.”

This issue of resident homeownership versus to absent investors is one that gained traction after the 2008 Great Recession. For nearly thirty years prior to the recession, Frayser was known for its high foreclosure rates. According to FCDC, in 1970 the community had a strong industrial base and the median income in Frayser was 110 percent of the area’s median, but the loss of industry shortly thereafter radically altered the neighborhood.

Rates of homeownership decreased and crime rates increased, causing Frayser to become a foreclosure capital. When Lockwood joined FCDC in 2002, he said Frayser's annual foreclosure rates was 150-200 homes, but at the peak of the recession it neared 900. According to FCDC, the Frayser zip code of 38127 led foreclosures in the Memphis area from 2000 through 2015. The area also saw a significant increase in investors and landlords buying empty homes for rental properties.

In a 2008 article from Memphis Daily News, Lockwood commented, “The neighborhood can’t stay at a fevered pitch of foreclosure forever; it’s just not possible.”

“Before the recession, there were investors in the area but from my experience they were mom-and-pop folks who grew up in this neighborhood,” Lockwood said. “Until the collapse of the market when prices plummeted, I didn’t really see a big investing pattern."

The recession caused FCDC to completely reconsider its model and it too turned to rentals.

“Literally one day the banks just stopped issuing loans,” Lockwood said. “We took a major loss on the properties we’d bought and rehabbed. We had to figure out how to mediate that so we got into renting.”

FCDC’s rental portfolio helped stabilize the agency and has allowed for a degree of financial independence. Rental properties make up about 50 percent of FCDC’s current portfolio, which includes roughly 200 homes and is valued at around $5 million.

Related: "Frayser apartment community undergoing major transformation"

As of May, the average house in Frayser was selling for about $34,000. That number is down from a high of $47,600 in 2006, but above the low point of $17,000, according to the FCDC.

Through the agency’s Rental Housing Program, FCDC purchases homes, renovates them, and rents them at an affordable rate to Frayser residents. The agency offers rental counseling to tenants to help them navigate signing a lease as well as assist with credit restoration services to encourage financial literacy and eventual homeownership.

FCDC’s campaign centers on: affordable home sales, homeownership awareness, and home buyer education. Affordability is a non-negotiable for FCDC. The agency wants residents within and outside the neighborhood to know that with the correct resources and information, they can own a home in Frayser at an average of $470 per month, including taxes and insurance.

To raise awareness through the campaign, FCDC has invested in print, radio and TV advertisements. One of FCDC’s key advertising campaigns centers the slogan, “Don’t rent for $700. Own for $480." Other messaging spotlights cost savings, assistance opportunities, affordable loans, counseling programs, and education requirements.

A banner outside 3309 Riney reads, "Don't rent for $700. Own in Frayser for $480." (Averell Mondie)

The increased interest created from this advertisement has proven to be a metric of success for FCDC.

“We’re giving people access to information and resources so they can be successful homeowners, then also providing them a house that is of a safe, decent quality and affordable,” explained Charia Jackson, housing counselor at FCDC.

In addition to its profits from home sales, FCDC has received investments from the State of Tennessee, City of Memphis, United Way of the Mid-South, and private foundations. Specific to the Home Ownership Campaign, the agency received a one-time grant from the Hyde Family Foundation, a three-year grant from Bancorp South, and several grants from the First Tennessee Foundation.

Related: "Frayser CDC lands Hyde grant"

“For a nonprofit agency, we are very business-minded," Lockwood explained. "We receive funding from various avenues that go to what we call brick-and-mortar because it’s so expensive to buy and fix up these houses. These funds do have timelines and benchmarks, but we also get funds through our returns on investing in these homes."

Since the campaign launched in 2017, FCDC has served 301 families through its education program and one-on-one services. The campaign allowed the agency to extend its reach through a new offering of an online homeownership education course offered through eHome America. Of the participants FCDC served, six from the Frayser area became homeowners, generating $291,000 in home sales.

“There has been growth in walk-in traffic at the agency. Before the campaign, we had people who knew what we were doing in the neighborhood but didn’t really have a message to put with that,” Jackson said. “On average, we have about 15 people coming in the door Monday through Friday because they just want information.”

FCDC is a HUD- and THDA-approved Housing Counseling Agency. Through the agency, residents within and outside of Frayser can attend group workshops and classes on financial literacy, home buyer education, pre-purchase recommendations, and more.

“Our home buyer education classes have increased. Since the campaign started, we have averaged about 20 attendees in each class, whereas in the past we would hope for 10 people to show up," Jackson noted. "In our one-on-one pre-purchase counseling, we’re averaging about 10 people a month. It has been impactful to have people more committed to getting the education. We know it’s tied to a lot of resources that require the certification, but it’s still a beautiful thing.”

Related: "Lockwood, Frayser CDC work to lift neighborhood housing"

Most mortgage lenders and payment assistance programs require that future home buyers complete a formal education class. These companies want to know that the interested buyer has earned a certificate to show that they are aware of basic information, resources and tools necessary for owning a home.

FCDC works with lenders to ensure that requirements and qualifications match the demographic realities of neighborhood residents. When banks approach FCDC seeking new mortgage applicants, the agency vets the lenders to see if they are: willing to make small loans below $50,000; will work with marginal credit scores between 580 and 620; can waive mortgage insurance premiums that typically cost $50 per month; and have relationships with down payment assistance providers such as THDA.

“We netted perhaps $40,000 on a recent house sale but have committed to put most of that back into additional houses. We are currently working on two new houses being produced with ‘recycled’ proceeds from house sales, and shopping for more,” Lockwood said.

FCDC is committed to using all of its resources to make Frayser and Memphis an attractive housing market.

“I’m bullish about the housing market in Memphis and even more bullish about the housing market in Frayser,” Lockwood said. "Unlike San Francisco, LA, Seattle, Portland, we’re actually trying to get the cost of real estate up in Frayser so owners can get better returns. We want enough investment in those houses to raise the property value and eliminate blight. Memphis is in a unique position and has a great opportunity to build up these core neighborhoods instead of building out like we’ve been doing.”