From a bank overdraft debt repayment plan to a fully-fledged “rent-to-own” venue
Aucklander Amy Tusa and her family have taken a huge financial leap forward.
In May last year, the family agreed to a $2,000 overdraft repayment plan with their bank split across several accounts, each attracting separate overdraft fees.
As of April this year, they are debt free after learning budgeting and money management skills in a Christians Against Poverty financial skills course and are set to move into what will become their own home through a non-profit rental. own housing project.
The charitable rent-to-own sector may be poised to grow faster thanks to the $400 million taxpayer-funded Progressive Home Ownership fund, but the sector remains tiny compared to the number of families excluded from ownership by low wages and high house prices.
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Tusa said she came across Christians Against Poverty and the Housing Foundation’s rent-to-own program through connections in her church.
Learning about budgeting and money management from Christians Against Poverty and discovering, after paying off their debts, that they were eligible for the rent-to-own program, had transformed the family’s financial and emotional life.
“There was no planning, no dreaming. No, what are we going to do with our money. You work to pay the bills. It was just awful,” says Tusa, who is a university student at full-time working towards a degree in public health.
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The family survived on one income, her husband Matt Tusa’s salary as a sales rep.
Tusa says the family never over-lived and the expenses that led to the overdrafts were for essentials, not luxuries. But the family didn’t have a good budget or strategy, and the constant struggle was painful.
After the Christians Against Poverty course “we became very disciplined. Then we started dreaming,” says Tusa.
The family now operates on a disciplined budget, no longer pays high overdraft fees across multiple accounts and has reduced spending leakage on things like takeout, she says.
That means there’s money to be saved for things like new bunk beds for the kids, who have noticed life just got easier.
“They stopped saying we don’t have any money. One of them said, ‘Can we do this?’ and another said, ‘Remember, we don’t have any money.’ It was like a stab in the heart,” says Tusa.
The removal of financial stress resulted in an increase in Tusa’s college grades from Cs to As and Bs.
But the prospect of home ownership is the most exciting change for the family.
“My husband was like, ‘I’m tired of renting. I’m tired of paying other people’s mortgages,” Tusa says.
Auckland was in Covid-19 lockdown when Tusa received the call that she had qualified for a rental property with the Housing Foundation, the country’s largest condominium home provider, set up around 20 years by Sir Stephen Tindall’s Tindall Foundation.
“I was outside jumping for joy,” she said.
It sounded too good to be true, which is the reaction of many families when they first heard about the Housing Foundation and Habitat for Humanity, both of which exist to help low-income whānau settle down.
Foundation chief executive Dominic Foote said the charity is keeping a relatively low profile. Every time he appears in the media, he is bombarded with calls because the pent-up demand for housing was huge.
“If we advertise it more widely, we would be inundated,” he said.
As a result, when people first learn about it, they don’t believe.
“We get the usual ‘it’s too good to be true’ skepticism. Who are you. I never heard of you. We understand that,” he said.
Word of mouth, through church groups like, is often the way people find their way to the foundation, which helps reduce disbelief.
“It takes away that ‘it’s too good to be true’. It’s a scam’, to people who say, ‘I want to be in it,’” he said.
The foundation’s shared ownership program helps families buy a share in the foundation’s homes, usually 60% or more, with a home loan from a commercial bank, and over time they gradually buy the foundation back. , until they own the house.
But as rent and the cost of living exceeded wages, and land and building costs rose, fewer families were able to access condominiums directly, Foote says.
Ten years ago, the household income he could help was just over $70,000, he says. It is now much higher.
And many families are now saddled with large debts, which they must settle before they can enter an equity sharing program.
The foundation therefore created a rent-to-own program, where families could rent a home from the foundation, with part of the rent used as a deposit to enable them to “prepare for the mortgage” after five years.
Then they can buy their house, freeing up capital for the foundation to build the next house, to help another family.
It recycles capital house after house, but Foote says, “It’s a static model. He is not growing.
The number of whānau that can be helped is limited by the balance sheets of charities.
Alan Thorp, chief executive of Habitat for Humanity, said rising land, building and living costs mean fewer families are eligible for its progressive homeownership program, which works differently from that of the foundation, families acquiring the property more slowly without the need for a bank loan.
“We can’t go as low down the income spectrum as before. People have to earn that $90,000 of household income to be part of the program,” he says.
To help more people, more money needs to be injected into the system, says Foote.
The Foundation has so far helped about 400 families to settle.
Foote says to truly have an impact at the national level, a much greater capital investment from taxpayers is needed.
“My gut feeling is that across the country, if 5-10% of new housing was targeted at these whānau, we would start to have a serious impact,” he says.
That would be around 4,500 to 500 homes a year, he says.
Vic Crockford, managing director of Community Housing Aotearoa Ngā Wharerau o Aotearoa, says it’s really about welfare whānau.
“We know owning your own home has cross-generational implications,” she says.
It’s not just wealth, she says. The health of families improves and children do better in school.
“Being the owner of your house is the chance to put down roots.”.
Increased taxpayer funding for condominium programs now exists through the $400 million Progressive Homeownership Fund, a brainchild of the Green Party.
“If you look at the big picture, it may seem like a drop in the bucket, but we have to start somewhere,” Crockford says.
Since the Kiwibuy campaign began in 2018 as a lobby group of nonprofits, including Habitat for Humanity and the foundation, more than 1,000 families have entered into a progressive homeownership program with the four members of Kiwibuy, Crockford said.
But, “if you compare that to 24,546 applicants on the social housing register, that doesn’t seem like a lot, but because it’s cross-generational, it’s a really big impact.”
The Kiwibuy Coalition claims that in 1991, nearly 74% of households owned their homes debt-free or with a mortgage. Today it is down to 63%.
If homeownership rates had remained stable, 200,000 more families and households would own their homes instead of renting them.
Foote says the graduated homeownership funding the foundation got was for its equity sharing program, but in the current funding round, it’s asking for money to help fund rental with call option, Foote said.
There are other ways to inject capital into the nonprofit progressive housing system, says Thorp.
“If we can partner with groups that can help fund that, then that’s a model that works.”