Talking Heads: Julianna Stuart, POAH

9 min read

How Family Self-Sufficiency Can Empower Your Tenants

For the past three years, Preservation of Affordable Housing, Inc. (POAH), a Boston-based, nonprofit affordable housing developer and property owner, has improved the lives of its tenants through a federal program called Family Self-Sufficiency (FSS).

Authorized by Congress in 1990 and administered by the U.S. Department of Housing and Urban Development, FSS helps struggling families pull themselves out of poverty by combining financial education and coaching with savings incentives.

Eligibility was initially limited to households that received Housing Choice Vouchers or lived in public housing. Then in late 2014, Congress extended eligibility to recipients of Section 8 Project-based Rental Assistance, a move made permanent in 2018.

Section 8 Project-based Rental Assistance pays the difference between the cost of rent and what a household can afford, and so as earnings grow, housing assistance shrinks. FSS allows participating households to save rent increases attributable to earnings growth in a special escrow account, the savings from which can be accessed for long-term financial goals, like homeownership or college. In this way, FSS turns a disincentive into a powerful incentive for employment and earnings.

Despite FSS’ advantages, less than five percent of eligible families nationwide are enrolled. POAH, on the other hand, has a 30 percent participation rate, having enrolled more than 240 households at seven properties, and is looking to further expand access. As POAH’s director of community impact, Julianna Stuart is a key figure in these efforts.

Tax Credit Advisor sat down with Stuart to learn more about FSS, how it was implemented, who its key partners are and why other property owners should embrace it.

Tax Credit Advisor: How did you learn about the FSS program? What did you envision as the potential impact on your residents, your company?

Julianna Stuart: We learned about FSS from advocates who had been observing and researching it for several years. People, like Jeff Lubell at Abt Associates, Kris Siglin at the Housing Partnership Network, and Barbara Sard from the Center for Budget Policies and Priorities, who wrote a report in 2001 titled, “The Family Self-Sufficiency Program: HUD’s Best Kept Secret for Promoting Employment and Asset Growth,” that was a beneficial resource and appropriately titled. We envisioned FSS as a way to manifest our mission. We don’t just want to build and manage affordable homes. We want to create a platform for opportunity and a powerful way to connect asset building and housing.

TCA: How long did it take to get your program up and running? What criteria did you use to select your pilot sites? What challenges did you encounter getting the program operational?

Stuart: It took about six to eight months to educate ourselves, develop and implement processes and tools, update our property management software, get our property management teams up to speed on FSS and why it was valuable, and then reach out to residents and get them enrolled. Now that we have three years of experience with the program, it takes about three months to  get a new site up and running. We initially selected four pilot properties, all in New England, in part because we had identified and started building a relationship with a Boston-based company called Compass Working Capital to be our financial coaching partner. Each pilot site had a unique quality to help us better understand how FSS could be impactful. We selected two urban sites and two suburban sites of different sizes, makeups and property staffing structures. As with any new endeavor, there are always system process, workflow development issues that arise and need to be resolved, but we learned a lot and we are still improving. At its core, FSS is an asset-building tool and financial incentive. We learned that the best way to leverage the power of FSS is with high-quality, individualized financial coaching that helps residents devise plans, set goals and work toward achieving those goals.

TCA: Who can enroll in FSS? How long do they participate? Do they reach a point where they “graduate” from the program or otherwise become ineligible? 

Stuart: Any POAH resident who receives project-based rental assistance is eligible. You must first submit an FSS Action Plan to the regional HUD field office, which basically tells HUD how you intend to run your FSS program. When an individual enrolls in FSS, the program lasts five years with an option to extend. We are in our third year, so we haven’t encountered that yet. There is a way to graduate early. A resident must be employed at the time of graduation and be free of cash welfare assistance for 12 months. Nine people have graduated early and made the decision to move on and buy homes, move into market-rate rental housing or otherwise find a situation that was a better fit for them.

TCA: Who manages your tenants’ escrow accounts? How do you monitor that the rent savings being accumulated in these accounts is being used appropriately?

Stuart: POAH manages the escrow accounts. We set them up. We track the escrow credit each month. We report to HUD on what that credit amount is. We take on that responsibility, but we also work closely with our financial coaching partners to ensure that residents fully understand their obligations. It’s important that residents drive their experience. We enable residents to access funds in their accounts; however, we create parameters around what those funds can be used for. We also contribute toward the goals that residents establish. If you enroll in FSS and your goal is homeownership, your financial coach will sit down with you and map out a plan. This may involve repairing your credit or taking on more hours at work and crafting a budget around what that would look like. Maybe it involves purchasing a reliable vehicle that helps you get to your current job or a better job. You might need access to those funds while enrolled in the program to purchase a new car or pay down debts to improve your credit record. It’s important to us that residents set goals, define what success looks like, and we help them craft a plan to get there.

TCA: Your partner in this effort is a nonprofit called Compass Working Capital. How did you find them? What activities do they perform? How do you pay for their services?

Stuart: Compass is a financial services nonprofit based here in Boston. When we connected with them in 2015, Compass already had several years of experience running FSS programs in public housing communities throughout New England. At six of our communities, Compass has hired and trained highly experienced financial coaches to work with our residents. They assist with the entire launch process, outreach to residents, enrollment and coordinating with property management staff around escrow setups. Compass provides workshops on budgeting, credit and debt management and saving, as well as individualized coaching. Compass also provides training and technical assistance on a national level to other companies that are interested in setting up their own FSS programs. The services provided by Compass we pay ourselves. As a nonprofit, we reinvest our financial resources to advance our mission, including in resident services, like FSS.

TCA: What other companies besides Compass provide similar financial education services? Is there a resource that our readers can use to identify potential FSS partners?

Stuart: We work with one in Independence, MO called Community Services League, which is a local nonprofit that we partner with at a 750-unit property called Hawthorne Place Apartments. Community Services League provides financial education services, along with employment coaching, family stability coaching, and a host of other services. If any of your readers are interested in FSS, and finding a local partner, I recommend they reach out to Compass to access its national network because they can help make connections.

TCA: Your enrollment rate is around 30 percent. What steps are you taking to increase participation? Is there any reason why you haven’t implemented FSS throughout your entire affordable housing portfolio?

Stuart: Nationally, the FSS enrollment rate hovers around four to five percent, so we think 30 percent is pretty good and at some of our communities we get as high as 60 to 65 percent enrollment. Residents are not always comfortable talking about their personal finances or money with neighbors or with a stranger, so a lot of trust-building work goes on. They may be more inclined to enroll once they see their neighbors succeeding or they hear about the power of FSS. For some families, it’s not the appropriate time to enroll for personal or financial reasons or something related to their job. But we do feel good about our enrollment rate at this stage. We don’t offer FSS at every POAH property yet, because we wanted to start small and really get familiar with how to run a successful program. We also felt it was important for the financial coach to be physically located at the property. While that approach has worked well for us and many of our residents, it is not feasible at every property in our multifamily portfolio, especially those properties that don’t have a high enough concentration of people receiving project-based assistance.

TCA: Why should other property owners follow your lead and implement their own FSS programs?

Stuart: FSS has had a transformative impact on our residents and our property management staff. We have seen residents move out and purchase homes, take on new jobs, and increase their work hours because FSS gave them the incentive and support that they needed to do that. The average FSS graduate builds thousands of dollars in savings. We haven’t had many graduates yet, since our first participants are only halfway through their five-year contracts, but the average person has saved about $3,500 and program-wide across all participating POAH properties it has been well over $350,000. The short-term administrative burdens of expanding FSS to a new property are very quickly erased by the positive impact it has on everyone. Our property managers tell us that resident relationships improve and their ability to collect rent and operate the property. It’s also positive when a new family moves in and you can say, ‘We have this fantastic program. It’s a great opportunity for you and your family to achieve life-changing goals while you’re living at a POAH community.’

TCA: What plans do you have for 2019?

Stuart: We continue to work with Compass Working Capital to improve our FSS programs, hone our financial coaching skills, understand the goals that residents are setting and analyzing their progress. We are also exploring new methods for delivering financial coaching to better serve sites that are not currently being helped and thinking creatively about how we can innovate and take FSS to the next level.

Story Contact:
Julianna Stuart

Darryl Hicks is vice president, communications for the National Reverse Mortgage Lenders Association and a 24-year veteran of associations managed by Dworbell, Inc., the management company of NH&RA.