A house is now our home!: James and Kimberly Papillion are the first winners of the Black Enterprise Own Your First Home Contest.

THE CALL CAME ON THANKSGIVING DAY. LIKE MILLIONS OF AMERICANS, James and Kimberly Papillion were preparing to join extended family members for the day's feast. A call from BLACK ENTERPRISE Chairman and Publisher Earl G. Graves Sr. was a surprising addition to the menu.

As Graves' voice came over the line to greet them, the Papillions thought back to earlier in the week when they first learned they were among eight finalists in BLACK ENTERPRISE'S Own Your First Home Contest. "We were excited about what was going on in our lives," James recalls. "We were just feeling extra good about being in the final eight."

Of course, they were even more excited when Graves broke the news that they'd won. "You're now part of the BE family," he said over the speakerphone as the Papillions jumped and yelled for joy. "As winners of our contest," Graves continued, "you now get to join us in sending the message that homeownership is the number one thing African Americans can do to secure their financial future and reduce the wealth gap in this country."

Later, as James and Kimberly celebrated with family over Thanksgiving dinner at Kimberly's mother's house, the day took on a much bigger meaning. "We've worked so hard, and this came at the right time for us," says James. "And for it to come on Thanksgiving Day, you couldn't ask for a better day to be thankful. It put the icing on the cake."

Eight days later, after more than two hours and 20 signatures, it was official: The Papillions were homeowners. There were smiles and hugs all around for the Baton Rouge, Louisiana, couple after they closed on their $150,000, three-bedroom, two-bathroom home on Dec. 2, 2005, completing their journey to first-time homeownership. For the Papillions, a new chapter in their lives had begun.

"Kim and I were sick and tired of investing in someone else's wealth," James declares. "We wanted to invest in ourselves. It will pay off in the long run, so we decided to do whatever it takes."

It took a lot of planning, sacrifice,.and financial adjusting by the Papillions to reach their goal of homeownership. Winning BE's first homeownership contest gave them a major boost. As the contest's first winners, the Papillions received $10,000 toward the down payment on their mortgage. The contest is BE's newest commitment to helping our readers achieve the No. 1 principle in our Declaration of Financial Empowerment: to use homeownership to build wealth.

"The Own Your First Home Contest is an extension of the Black Wealth Initiative we launched during the 30th anniversary of our magazine in 2000," says Editor-in-Chief Alfred Edmond Jr. "It is designed to encourage African Americans to adopt multigenerational wealth-building habits. Homeownership is key to achieving that, so we introduced the contest to motivate people to not just dream of owning a home but actually take the steps to make it happen."

Married for five years, the Papillions, both 30, had dreamed about owning their own home for some time. Now the couple, who met in college while doing charity work for the homeless, own a brand new home in Tuscany Villas, one of several new subdivisions that have sprouted up in Baton Rouge within the last two years. Their newly constructed home features a fireplace, central heating and air, modern kitchen, two-car garage, and a backyard that overlooks a reflecting pond that they share with other residents of the subdivision.

For James, whose father worked very hard to keep a home, and Kimberly, whose parents have owned multiple homes over the years, purchasing a home of their own is a source of pride. Like most people, the Papillions had to overcome various life circumstances and financial challenges, but with discipline and determination, they worked around those obstacles to achieve their goal.

GOING FOR THE GOAL

The couple first applied for a mortgage during the summer of 2004, but were denied due to poor credit scores. Kimberly, who makes $37,000 as an eighth-grade math teacher, and James, who makes $31,000 as a youth development specialist and $8,000 as a GED instructor, had both fallen behind on credit card and personal loan payments they had accumulated in college. "When we first got married, we had different loans and just got behind,"James explains.

Shortly after the Papillions were rejected, Kimberly's parents, Marie and Eugene Parker, used the equity from the sale of their home to trade up to a bigger one. At their closing in September 2004, Marie Parker met Gloria Winchester, a senior mortgage loan consultant with Celtic Financial, a regional mortgage broker. "[Ms. Winchester] was remarking how she had gotten [a client] a good interest rate on a mortgage, so I got her card and passed it on to Kim," says Parker.

After meeting with Winchester, the Papillions were very eager to follow her instructions to get on the road to homeownership. "I worked with them for a year, helping them straighten out their credit situation by paying off some negative credit items, eliminating some debt, and helping them understand the home buying process," says Winchester. "The Papillions were the ideal clients. They did everything that I suggested to them in order to prepare for their home purchase. I wish all my clients were like them."

THE WILL TO SACRIFICE

The top priority for the Papillions was to get their spending under control. "One thing we had to do was look at how we spent our money every single day for 30 days," says Kimberly. "I used Microsoft Money on my computer, and every day I'd pull off a report to see where our money was actually going."

The couple used these reports to figure out what costs they could trim and how they could apply the savings to their outstanding debt. "Did I need that extra latte? Or can I take that money and pay down on another bill?" Kimberly asks. "Once we went through that process it helped us trim expenses."

But the Papillions also knew that spending wasn't the only problem they had to overcome. They had to begin saving money for the closing as well, which required additional sacrifices. To bring in more money, Kimberly began tutoring math and James began teaching adult education classes. In fact, Kimberly, who is pursuing a master's degree in administration supervision, postponed taking classes last summer to tutor children in math so she and James could have more money available for a down payment. By the time they closed on their house, they had saved more than $8,000.

TACKLING CREDIT REPORTS

While James and Kimberly tracked their expenses, they also monitored their credit reports. "We both pulled our credit reports and looked at what debt we had and what we needed to pay off," says James. Kimberly had run up a few credit cards in college and had a car loan for more than $21,000. James had several outstanding personal loans, including more than $20,000 in student loan debt.

Some of their smaller debt they paid off immediately. Then Kimberly scoured their credit reports for possible errors. "I wrote letters to each lender if I thought there were some errors on our credit report," she explains. "I sent letters to Equifax and Transunion. I found a lot of errors on our credit reports, and fixing them really helped our scores go up." Kimberly says that when they began working with Winchester, both their credit scores were in the 550 range, but when they applied for a mortgage in 2005, James had a 615 credit score and she had a score of 601. While scores of 650 to 750 result in the best interest rates, the Papillions were still able to qualify for 100% financing with Celtic Financial.

RESEARCH AND PLAN FOR YOUR GOAL

Initially, the Papillions were looking to purchase an existing home, but as they began cleaning up their credit profiles, they asked Winchester about the cost of newly constructed homes.

"I researched, I went online, I read magazines. I went to the library and got books on how to build my credit and how financing works," says Kimberly.

By the summer of 2005, Winchester says, "based on what we had accomplished in helping to get their credit back on track, increasing their credit scores, and their diligence in putting aside some money to help pay closing costs and a down payment, I was positive that they could build a new home."

The couple put down a $1,000 deposit, signed a purchase agreement with a contractor to secure their building, and selected the lot they wanted in July. Since their financing had been approved, they were only months away from stepping into their new home.

It was also in July when Kimberly, who was attending a youth conference at her church, happened to pick up the August 2005 issue of BE and read about the Own Your First Home Contest. After reading the rules, Kimberly determined that because they had actually signed a purchase agreement with an expected closing date before Jan. 1, 2006, they were qualified to enter the contest. "That night I went to the Website and wrote a story from my heart telling what we had went through to get our home." The Papillions were just one of 1,000 candidates who wrote compelling essays about their home buying experiences and the importance of homeownership to their families. And because they had already made the necessary sacrifices to curb their spending, repair their credit, and save up a down payment, they made it all the way to the final round along with seven other contestants and ultimately won the $10,000 grand prize. (See sidebar for more information on the runners-up in the contest.) In addition to the gift toward their down payment, the Papillions received other prizes, including a $250 gift card from Lowe's Home Improvement and a two-year subscription to BE.

"They really embody many of the messages we want to send about home buying to the African American audience," says Edmond. "We wanted to send the messages that it's never too early to buy a home, you want to start young, and it's a great way to build a foundation for wealth building for future generations."

The Papillions are already reaping the benefits of homeownership. Previously, they were renting a two-bedroom apartment for $750 a month. They weren't focused on managing their money properly, and they had allowed their credit scores to drop considerably. By making the commitment to homeownership, they've ended wasteful spending and improved their credit scores, which will help them obtain lower interest rates on credit in the future.

James and Kimberly also benefit from their $10,000 prize winnings. Before they won the contest, they were going to enter into a 100% financed deal and an 80/20 combination loan. The combination loan would have allowed them to avoid having to pay private mortgage insurance by financing the mortgage in two parts--one loan for 80% of the value of the home and another loan for the remaining 20%. But using the $10,000 prize as a down payment caused the purchase price of the home to drop from $150,900 to $140,900, therefore eliminating the need for the 80/20 combination loan.

"I changed the loan program from a 100% to a 90% loan," says Winchester. "The interest rate on one loan at 90% LTV was lower than the combined blended rate they were getting on the 80/20 combination loan, therefore enabling them to have a lower monthly payment. By reducing the loan amount, they are saving about $92 more per month, and overall about $35,380 in interest over the terms of the loan."

The Papillions now pay $1,048 a month, and they will be building equity with each mortgage payment. As things improve in the Gulf region, the value of their home should increase.

Perhaps the biggest benefit for the Papillions is knowing that the building they live in is theirs. It's a feeling that cannot be duplicated. "Owning our first home is just the beginning," says Kimberly. "We also want to invest our money and save more."

GET SERIOUS ABOUT HOMEOWNERSHIP

Both James and Kimberly say that because of how their parents raised them, homeownership was the only choice for them. "We thought about our children," says James with a smile. "We thought about our younger sisters and brothers and fell that this is not only something for us, but it can be a teaching tool for them and the kids we work with."

Now it's up to you to take your first step toward homeownership. If you haven't purchased a home yet, check in at blackenterprise.com regularly for the launch of the next BE Own Your First Home Contest in 2006.

MORE INSPIRING STORIES OF FIRST-TIME HOMEOWNERS

Nearly 1,000 families and individuals entered our inaugural Own Your First Home Contest. In addition to being a first-time home buyer who met the credit requirements, each entrant was required to write a brief essay about his or her pursuit of homeownership. While only one entrant could win the $10,000 prize toward their down payment, hundreds of others were winners, too. They were inspired by the contest to take action and make their home buying dream a reality. Included among these new homeowners are three entrants contest judges identified as runners-up:

* Aisha Thomas, a 27-year-old single mother of a 2-year-old son, bought her first home in Pontiac, Michigan, after seven years of renting.

* Donna Pearman-Davis and her husband, Maurice, both 37, moved into their first home in Matteson, Illinois, with their three teenaged children.

* Shade Akande, 31, a single, professional woman who also designs wedding gowns and evening wear, bought her first home in Auburn, Georgia.

Our runners-up received a $250 gift card from Lowe's, a BE Wealth-Building Kit, checkbook holder (embossed with the 10 principals of our Declaration of Financial Empowerment), and a two-year subscription to BE. TO read the complete stories of these new homeowners, visit www.blackenterprise.com.