My name is Sasha Pellerin and I am an FII participant in Albuquerque, New Mexico. I am writing this letter to explain the many informal processes I experienced in my work towards being approved for a home loan.
There were multiple steps that were needed in order for me to purchase a home, and the FII platform helped facilitate those goals. The written plan served as a mechanism to keep me focused. I was able to create clear steps, and more importantly revisit my steps monthly over the course of a year.
Social capital is also a concept that really came to light to me during this process. During our first meeting I reported out that my goal was to buy a house. Immediately, other group members had advice and resources. I found out Gabriel, another group member, was a realtor. He and I started working together last January. I had my credit run, and also worked with Homestart, a non-for-profit in Albuquerque to help first time home buyers.
About 4 months in to my work with FII I started to become frustrated, as my credit score had remained stagnant for months. The group really encouraged me to continue to work towards my goals. Another group member that month reported back on how she was managing money, saving, and also how she tracked her credit. She and I met at her house and she showed me her “books.” She gave me tips on how to manage credit cards and bills. I learned the 30% rule, which means every month every credit card needs to be paid down to 30% of the total credit limit. I also learned about how credit cards report to the credit bureaus. I left the meeting pumped, created a similar tracking system, and started a monthly membership to Score Sense, a credit monitoring app.
I was also able to save the $1000 for the FII Home Resource Match Funds. I actually set up my FII payments to be transferred in to my savings account. When I reached $1000 I left the funds there, and used this as my 1/3 match. The rest of my down payment is going to come from a lending circle. I had heard about this process before, but was always reluctant to participate. I spoke with other FII members and was encouraged to participate. I will use my $2000 “tanda” or lending circle money to cover the remainder of my down payment.
In one year’s time I was able to raise my credit 30 points, and get approved for a home loan. I was also able to secure the FII match funds for my down payment. I am currently in the final process of closing and want to thank FII for creating space to capture what happens when people use informal systems to reach our goals.