Understand risk. With every affordable lending program, you need to balance the risk to the bank versus the value of the investment in the community. I’m fortunate that I work for a bank. That means we can put CRA loans in our portfolio. We don’t have to sell them to investors such as Fannie Mae and Freddie Mac. And that gives us more flexibility.
In many large cities in the US, there is a crisis caused by a shortage of affordable housing options. This has led to a host of social challenges. In this series called “How We Are Helping To Make Housing More Affordable” we are talking to successful business leaders, real estate leaders, and builders, who share the initiatives they are undertaking to create more affordable housing options in the US.
As a part of this series, we had the pleasure of interviewing Beverly Meek.
Beverly Meek has a passion for building communities, which began formally in 1992 when she took a job at Marine Bank in Springfield, Illinois, in the department that oversaw community reinvestment. This was her first exposure to the power of homeownership to transform lives and improve communities. She later brought that passion to Flagstar Bank where her creative thinking, deep knowledge of the Community Reinvestment Act and experience in philanthropy produced a successful CRA program and fresh ways of looking at affordable housing.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
I’ve been in banking for 30 years. I started at a savings bank in my hometown of Springfield, Illinois. It wasn’t a conscious decision, but I think I was drawn to banking going back to the fifth grade when a classmate brought her father, who was a banker, to school for a show-and-tell. I was impressed with what he had to say. It just stuck with me, and when I graduated from high school, I applied for a job at the local bank. And they hired me!
Can you share the most interesting story that happened to you since you began your career?
I come from a low-income family, and I know what it’s like not to be able to pay the rent or own a home. Because of that, when I began to learn the mortgage business, I was naturally drawn to helping low- to moderate-income families. My first loan was to a family from my own neighborhood, and they were first-time homeowners at a time when banks were not making many mortgage loans to minorities or people of color. Just seeing the family’s reaction — I was hooked.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
The tipping point was when I started to work at my current employer, Flagstar Bank. I was midway in my career. I worked for a company for a long time when I took a short break from my job. A friend told me about a CRA position at Flagstar. For the first time in my career, I was given the resources to create the kind of community reinvestment and affordable housing programs I dreamed about. Flagstar’s CEO, Sandro DiNello, backed me from day one. And It wasn’t just that he backed me — the entire management team backed me. I was off and running. It was great. The takeaway is that having the support and resources to do your job make all the difference.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful who helped get you to where you are? Can you share a story about that?
That’s easy. Flagstar’s CEO, Sandro DiNello. He gave me the flexibility to figure out how to help communities and provide them with sustainable solutions, and even better, he took the time himself to talk to residents, small business owners and community leaders.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
The book that comes to mind is “A Generation of Hope: Portraits and Stories to Commemorate The 10th Anniversary of By The Hand Club for Kids.” It’s a collection of stories from kids in Chicago’s most challenging neighborhoods told in their own words. The stories demonstrate that a little guidance and love can transform a child’s life. A few words of encouragement and support go a long way when people are facing difficulties. I keep that in mind when I think about how owning a home can lift families out of poverty and transform their lives.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Children are what they see.” The more children are exposed to different opportunities, cultures and environments, the more they can understand the world around them. I’ve used this quote as a guiding principle in parenting my son and in my work. Never turn down the opportunity to meet new people, go to different places, do things out of your comfort zone. See everything. You’ll be many times rewarded with an understanding and perspective that ground your judgment. In my work, this quote helps me get to the core of a problem and find solutions that serve the bank and my client.
Ok super. Let’s now shift to the main part of our discussion about the shortage of affordable housing. Lack of affordable housing has been a problem for a long time in the United States. But it seems that it has gotten a lot worse over the past five years, particularly in the large cities. I know this is a huge topic, but for the benefit of our readers can you briefly explain to our readers what brought us to this place? Where did this crisis come from?
I do believe affordable housing is at a crisis level. I don’t see where people in poverty and minorities are able to take advantage of the low interest rates and real estate opportunities now available. Credit issues and unemployment are usually at the top of every list of barriers. Lack of funds for a down payment is another perennial. Then there’s the condition of the housing stock and the cost of rehab, which can make a home unaffordable without some kind of subsidy. Even getting contractors to work on low-value houses can be problematic. It’s a lot more profitable for them to rehab expensive homes. Add to that the pandemic, which not only disproportionately impacted people of color, minority communities and low- to moderate-income borrowers, but also set off a spike in the cost of building materials, like lumber. Put them together and what we have today is a highly inhospitable environment for affordable housing.
Can you describe to our readers how your work is making an impact to address this crisis? Can you share some of the initiatives you are leading to help correct this issue?
A cardinal rule at Flagstar is to keep your ear to the ground — listen to the community to understand what is holding people back from getting a mortgage. A great example is a loan we developed for residents of Pontiac, Michigan, called Community Comeback. Flagstar pledged 10 million dollars to help revitalize Pontiac, with 5 million dollars earmarked for homeownership. We learned from talking to the community that finding fix-up money was a huge stumbling block in purchasing a home. That’s why Community Comeback came with the option of financing renovations. We also offer Destination Home Mortgage in select markets. It features 100 percent loan-to-value for purchase or renovation, as well as flexible underwriting.
Another barrier to homeownership that we heard from our communities is the need for down payment assistance. Our response was to create a Flagstar gift program that provides down payment and closing cost assistance for up to 3% of the loan, with a cap of 5,000 dollars. Borrowers only need 1,000 dollars of their own money. We also teamed up with the Michigan state housing agency to provide down payment assistance for low- to moderate-income families.
A place where we’ve created a niche is the way we leverage low-income housing tax credits to finance construction of multi-family housing. We use our strong relationships with minority developers, coupled with the access Flagstar has to the affordable housing programs of the Federal Home Loan Bank of Indianapolis, to help developers build and rehabilitate affordable multi-family housing rental units. Since 2017, Flagstar’s affordable lending and investments have helped the bank create about 3,000 units of affordable housing.
Can you share something about your work that makes you most proud? Is there a particular story or incident that you found most uplifting?
What makes me most proud is that I am African American, and I’m in a position at Flagstar to help my community and people of color. I’m proud to work for a company where I can create innovative programs to help low- to moderate-income individuals and families experience the benefits of homeownership.
In your opinion, what should other home builders do to further address these problems?
I would encourage developers to look into some of the subsidy programs offered by state agencies and low-income tax credit programs that encourage businesses to invest in affordable housing. There are many programs that make it possible for developers to turn a profit and contribute to the betterment of their communities.
Can you share three things that the community and society can do to help you address the root of this crisis? Can you give some examples?
Financial literacy. This is critical to successful homeownership. Part of Flagstar’s program with multi-family housing involves a financial literacy piece that kicks in once the properties hit 80% occupancy. When folks are buying a home, it’s not unusual for it to take three to six months of financial education before they’re ready to purchase. At Flagstar, we’ve hired a CRA loan officer whose job is to focus on education and work exclusively on affordable housing for low- to moderate-income borrowers. But I think financial literacy really should start with the schools — grade school, specifically.
Infrastructure. Public policy that fosters investment in upgrading the infrastructure of neighborhoods in low- to moderate-income tracts could help boost home values and make rehabbing easier. Closing the digital divide is big part of the investment in infrastructure.
Marketing. Realtors and lenders need to understand the community benefits and economic importance of affordable housing and help spread the word. Self-education about the availability of affordable housing products would be part of that.
If you had the power to influence legislation, are there laws which you would like to see introduced that might help you in your work?
Rather than legislation, my preference would be the kind of public-private partnerships we’ve done at Flagstar. I’ve seen firsthand the value of involving foundations and nonprofits in affordable housing initiatives. Banks can’t do it alone. We have real-life examples of how well these partnerships can work.
What are your “5 things I wish someone told me when I first started leading my company” and why? Please share a story or example for each.
1. Develop your internal relationships before going out to talk to external clients. An internal network of supporters is key to success.
2. Connect with people emotionally. Inspire them. It’s a fun part of the job that I hadn’t anticipated.
3. Understand risk. With every affordable lending program, you need to balance the risk to the bank versus the value of the investment in the community. I’m fortunate that I work for a bank. That means we can put CRA loans in our portfolio. We don’t have to sell them to investors such as Fannie Mae and Freddie Mac. And that gives us more flexibility.
4. Educate. Educate. Educate. Homeownership is transformative. It benefits the homeowner and the community. It can build wealth, stabilize neighborhoods, engender pride. Be an evangelist for that message.
5. Build a boffo team. You’re only as good as the people who support you. I’m blessed to report to a leader who “gets” CRA and to have a team that shares my passion.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.
My big idea — and it’s not original to me — would be to have free education, at least up to two years of college, for everyone. I feel strongly that education is the key to success for low- to moderate-income and minority individuals and families.
Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them. 🙂
I would love to have a private lunch with Vice President Kamala Harris. I’m obviously very, very proud of her. I’d love to talk to her from a banking perspective about the opportunities and challenges of community reinvestment and get her support for some of the initiatives we know work.
How can our readers further follow your work online?
