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Rescuing Neighborhoods from Foreclosure

How ACTS Housing, a local nonprofit, turns Milwaukeeans into homeowners

May. 2, 2017
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Juan Pacheco and Norma Mendoza in their two-story white bungalow on Milwaukee's North Side

Six months ago, when Norma Mendoza and Juan Pacheco walked into the two-story white bungalow on Milwaukee’s North Side they planned to move into with their two children, they had to suspend their fantasies of how the living room would be decorated and who would get which bedroom.

Instead, they had to take in the enormity of the effort required just to make the living room and bedrooms safe. The home, foreclosed long ago, had most of its windows knocked out. Debris lay strewn all about the dirty carpeted floors. The walls were scratched, vandalized and punctured. The furnace was dead. They’d need a plumber, permits and all sorts of other help.

They didn't know where to start. For a Spanish-speaking low-income family who hadn’t attempted a project like this before, they were intimidated.

“Nothing is easy,” Mendoza said last week, with the help of a translator, sitting on a wraparound couch in her freshly painted living room with new wood floors.

Mendoza, 37, and Pacheco, 40, pulled it off. Eleven years of renting from negligent landlords are over for them, and their bungalow has gone from a foreclosed blight to a happy and strong home.

They deserve more credit than anyone for that turnaround, but they did receive critical help from ACTS Housing, a nonprofit that for more than 20 years has helped low-income families in Milwaukee become homeowners by purchasing and renovating vacant, crime-attracting foreclosed houses. It’s a mission that not only provides stability for vulnerable families, but also for neighborhoods in a city that officials estimate has more than 2,000 foreclosed homes.

“I’ve enjoyed working with ACTS immensely,” said Amy Torim, real estate development services manager for the city of Milwaukee. “It’s so exciting to see families sit around their own kitchen table and gather in their own living room and pick the decorations that they want to hang on their own walls. There’s nothing else like that. 

“That all contributes to bringing vibrancy back to these neighborhoods.”

ACTS was born out of a pilot program at St. Michael’s Church in the early 1990s to push back against some of the crime and foreclosures swirling around the neighborhood. Since that time, though, the organization’s footprint has spread all over Milwaukee’s North and South sides and central city, with offices in each area.

What the group does is provide expertise for the entire process of purchasing and rehabilitating a property—everything from obtaining loans and grants to cataloging the repairs needed and picking contractors. According to ACTS, over the years it’s helped sell more than 2,100 properties and rehab more than 750. More than $129 million have been invested in all of that.

ACTS helped 165 families last year, a record for the organization. Mike Zimmerman, the president of ACTS’s board of directors, said the staff will be disappointed if they do not top that mark in 2017.

Most of the families they help have household monthly incomes of $2,000 or less and are paying rents as high as $900 a month for a space that is either cramped, not sanitary or unsafe, according to Mike Gosman, ACTS’s executive director. Many of them have landlords that can’t afford to or have no interest in keeping their properties in good condition.

Mendoza and Pacheco know that life, they said. Water would leak frequently. Stairs felt old and dangerous. Pacheco would be forced to fix little things around the property all the time, without being compensated by the landlord.

Most city-owned foreclosed properties can be purchased for $3,500, but there’s usually about $25,000 worth of rehabbing that needs to be done, about as much as the annual household income of most ACTS families. Much of the work that doesn’t have to be done by a licensed professional is often left to the families themselves. It’s an investment that, on average in the long run, Gosman said, saves families about $250 a month in housing expenses. Seventy-five percent of ACTS’s clients still live in their homes, while 6% have foreclosed, he added.

Gosman says ACTS is sensitive about taking credit for these success stories. He and others stress the fact that they are merely a coach on the sidelines giving advice and nothing resembling charity. 

“They’re also gaining all this confidence in themselves, accomplishing something that many from the outside thought, ‘Oh, they can’t do that.’ And so in the process of doing what they do and showing their strength, they prove a lot to themselves and their family,” Gosman said.

When asked to recall what it was like to rehab her new home, Mendoza laughs a little. She relates a story about how she and Pacheco would sometimes end up focusing so hard on the work they were doing that long stretches of time would pass before they would even look at each other. When they finally did turn their eyes on each other, they would laugh at how dirty the other one had become.

They spent six months turning the downstairs into the warm, inviting space that it is today. The upstairs, which will include a play area for their two kids, is unfinished. By the time it’s all done, about $18,000 will have been poured into the place and all of it will be covered by loans and grants, Mendoza said.

But they’ve already achieved what they’re after. More than anything, Mendoza and Pacheco said they wanted their home simply to have more space. The places they’ve rented were too small for a family of four. Neighbors in close proximity meant they had to be quiet. They never had their own yard. All of that is different now.

“They love it to be here, freely, doing their stuff,” Mendoza said of her kids.

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