Achieve your dream of homeownership 'you could win $10,000: even if you don't win the cash, you'll come out on top. But don't take our word for it--three entrants from our first contest tell how homeownership pays off.

AS HOME PRICES CLIMBED IN HER AREA, Melody Jiggetts, 25, felt she needed to strike quickly, When the rent on her one-bedroom apartment in Whittier, California, increased almost 29% in two years, she decided she'd rather pay her own mortgage than someone else'so To that end, Jiggetts entered BLACK ENTEBPRISE'S inaugural Own Your First Home Contest for a chance to win $10,000 toward the down payment on a new home. Her initial attempt to enter the contest by way of the Internet was thwarted by server problems. Undaunted, she submitted her entry form by fax on Sept. 1--the deadline for submitting entries.

A downed server was nothing compared to the other obstacles Jiggetts overcame to achieve her homeownership goals. In her essay, she wrote that she'd received a "rude financial awakening" in college. "While my peers were receiving first-time credit card offers, I found that I could not even open a bank account," she wrote. She met with a representative from Chexsystems, a network of financial institutions that share information on mishandled checking and savings accounts, who advised her to get copies of her credit reports. Jiggetts was astonished by what she found. "I had 14 delinquent accounts--phone bills, credit cards, traffic tickets. I even had a car repossession!"

However, the biggest shock was the identity of the person responsible--her mother. "My mother worked hard to make ends meet, but with an income that classified us as a low-income family, it was very hard," Jiggetts explains. "That's why i don't blame her for ruining my credit long before I turned 18. My mother was ashamed when i confronted her. She assured me that I could get the accounts easily removed [from my credit reports] because I was a minor when the accounts were acquired. She was wrong."

After three years of conversations with creditors and countless letters, Jiggetts finally had the delinquent accounts removed. "Around this time I subscribed to BE. After reading a few issues, I vowed that 1 would never use someone else's credit to acquire things. I vowed to get my credit in order. I wanted to be an ideal candidate for the best interest rates on car loans, credit cards, and, most importantly, a home mortgage. Today I have a credit score of 761."

Jiggetts started searching for a home in June 2005, concentrating her efforts in Los Angeles County. At the time she was earning $43,000, plus about $8,000 in commissions, as a business analyst at an international food manufacturing company in Glendale, California.

"In a year, I wouldn't be able to afford anything because my salary wasn't going up at the same rate as real estate prices," Jiggetts recalls.

She changed her focus from homes to condos and found a one-bedroom condominium in her price range in Casa Madera, California. Ultimately, Jiggetts received two loans from Wells Fargo--$164,000 at a fixed 10-year rate and $41,400 at a 30-year fixed rate--at a 4.75% interest rate.

To prepare for the transition from paying $900 in rent to a $1,450 mortgage payment (which included homeowners' association fees and taxes--typical with a condo purchase), Jiggetts began saving the difference for several months before she closed.

"I actually received that suggestion from DE," she says, "And I realized I could do it and still maintain a decent lifestyle."

The 700-square-foot condominium needed renovations, so the seller gave Jiggetts a $3,500 credit toward the purchase price, $205,000. Using the $3,500 credit and $7,000 that would have gone toward a down payment, Jiggetts did extensive remodeling that included completely gutting the bathroom, refinishing the kitchen cabinets, replacing kitchen countertops, retiling the kitchen floor, installing new carpet, and adding recessed lighting. She moved into her new home in September 2005.

Since buying her home, Jiggetts has earned a promotion to customer development account manager that increased her salary almost 50%, making it easier for her to pay her mortgage. But she has remained a careful money manager. She switched to a less expensive cell phone plan, eliminated long distance service on her home phone, and minimized shopping for unnecessary items.

Looking back, Jiggetts says she might have done things differently-she wasn't satisfied with her real estate agent's level of expertise and feels that she paid too much for her home. But the experience produced positive results in the end, she says. This year, Jiggetts saved 15% on her 2005 income tax returns because of homeownership credits. And she remains mindful of maintaining a good credit history, which lowers her rates for credit cards and car insurance.

"Everybody should buy a home," she says. Although she didn't win our contest, Jiggetts is "grateful to Be for teaching me that owning my own home was possible."

Jiggetts was one of more than 950 contestants who filled out applications in an effort to win the $10,000 down payment. She didn't win the cash prize; BE's editors selected James and Kimberly Papillion of Baton Rouge, Louisiana, as the winners (see "A House Is Now Our Home," March 2006). However, Jiggetts won nonetheless because she's built an asset through homeownership.

A FOUNDATION FOR WEALTH BUILDING

Across racial lines, homeownership is the greatest contributor to generating wealth in the United States. That's why BE launched its Own Your First Home Contest last year. It's also why "to use homeownership to build wealth" remains the No. 1 Principle of our Declaration of Financial Empowerment, the centerpiece of the BE Black Wealth Initiative (www.blackenterprise.com/wealth/wbk.asp). The benefits of homeownership are many, and they extend beyond personal asset building. Homeowners tend to play more active roles in their communities, they vote at higher rates, and they contribute to neighborhood stability at higher rates than non-homeowners, according to public policy studies.

"Homeownership is transformative because people use their equity to pay for education for themselves or their children," says Ken Wade, chief executive officer of NeighborWorks America, a Washington, D.C.-based nonprofit organization that provides financial and training assistance to improve communities. "A good number of small businessmen get their start by tapping into the equity in their homes," he adds.

Although the benefits of homeownership are undeniable, challenges to finding affordable homes abound in many real estate markets around the country. Real estate prices have appreciated dramatically in recent years, averaging $223,000 in April 2006. Interest rates are on the rise: The average mortgage rate is projected to reach 6.9% during the second half of 2006, according to the National Realtors Association. Add those numbers to the difficulties of improving a credit rating and finding down payment and closing cost assistance, and it's clear that buying a home has become more difficult, but it's still an attainable goal.

OVERCOMING THE DEBT BARRIER

Donovan Martin and his wife Rena Rios-Martin entered last year's Own Your First Home Contest on July 22, 2005--the day after BE began accepting entries. The three-bedroom Bronx, New Yore apartment they had rented since the spring of 2002 was too cramped for their growing family. The couple had three young children, so they decided it was time to look into homeownership.

Donovan's credit score was a less-than-stellar 600, while Rena's was a respectable 650, but neither could qualify for a loan in the New York market on their own. Their salaries--Donovan's $70,000 as a network engineer for AT&T and Rena's $68,000 as a registered nurse at Montefiore Medical Center--gave them a good combined income, but improving their credit scores would give them the best opportunity to buy a home.

"Before I sat down and talked to anyone, I made sure that we cleaned up our credit reports," Donovan says.

The couple decided to live off of Donovan's paycheck, and used Rena's to save the down payment and to pay down the $25,000 credit card debt they had accumulated from 10 credit cards. In October 2003, they consolidated their credit card debt on the advice of a credit counseling company, making $400 monthly payments, but soon realized they could pay their debt off faster by making larger payments directly to each of the credit card companies.

As the Martins eliminated their debt, they also examined their finances to figure out how much house they could afford. They knew their mortgage payments would be far higher than the $800 a month Rena's uncle was charging them for their apartment. They visited Realtor.com to do mortgage calculations using different down payment amounts.

Searching for a home in early 2005, the couple found a 3,000-square-foot house being built in Meadow Winds, a new development in Newburgh, New York. The four-bedroom house had a purchase price of $425,900, which included about $25,000 in upgrades the Martins added during construction.

With better debt profiles, the Martins received financing from Chase Bank--a 30-year, 6.2% fixed-rate mortgage loan of $361,344 and a $67,000, 7.5% second mortgage. The Martins made a $34,185 down payment using $22,000 taken from Donovan's 401(k) plan and the rest from their savings.

"I look at this home as a starting point. It's an investment that will lead to other investments if we use it correctly," Donovan says. The house was completed in March and the family of six, including Andres, 7; Anliana, 5; Anjoule, 4; and Amelia, 5 months, moved in July, after the end of the school year.

FRUGAL SPENDING

Almost immediately after they started dating in April 2004, Sean Bradley, 22, and Anneza, 26, knew they'd be renting only temporarily. "We wanted something that would be ours," says Sean, a financial adviser with MetLife.

To reach their goal of homeownership, the couple began a disciplined savings plan to pay for their wedding and for a down payment. Soon, saving took priority over all unnecessary spending--including Chuck E. Cheese romps, McDonald's fast food, and toys for 4-year-old Imani, Anneza's daughter from a previous relationship. Imani was not amused.

"She suffered right along with us," says Sean, with a smile.

When the Bradleys began house hunting, they had only a few hundred dollars in savings between them. The couple stopped eating out and going to movies, and instead began clipping coupons and buying household items on sale. Sean took a second job earning $3,000 helping a friend build decks during the summer. And the couple opened an online savings account at www.emigrant direct.com to take advantage of the 3.75% interest rate, higher than what most banks offered at the time. Between Sean's annual salary of $52,000 plus commission, and Anneza's $25,000 salary as an administrative assistant at a landscaping company, the Bradleys felt they'd take in stride the increase from paying $1,000 in rent to a little over $2,000 a month on a mortgage.

On July 22, 2005, Sean made another bid to help realize his family's dream of homeownership. He entered the Own Your First Home Contest. In the essay he submitted as part of his entry, Sean identified Imani as a prime motivator behind the move from renting to ownership. "[Through homeownership] we believe we can get a good, solid foundation to grow on," Sean wrote, "and have a positive net worth that our daughter will see and learn from as she matures into a beautiful young woman."

By October, three months after entering the contest, the Bradleys were married and approved for 100% financing of a $355,000, 30-year fixed-rate loan with Covenant Financial. They had saved $10,000 for closing costs, coupled with a $2,000 gift from Anneza's father. The family moved into their new four-bedroom home, recently appraised for $462,000, in Laplata, Maryland, and they are now happily awaiting the birth of their second child, due in December.

For the Bradleys, homeownership has meant having a safe backyard where Imani can play. It's hard to put a price on that. "My wife and I had been striving to not only get out of our rental," Sean explains, "but to allow our daughter to know at a young age the joys of having something to call her own--namely a backyard and swing set."

WHAT ARE YOU WAITING FOR?

Enter our 2nd annual Own Your First Home Contest, and get a chance to win $10,000 toward your down payment.

Last year, we held the inaugural Own Your First Home Contest in recognition of the 35th anniversary of BLACK ENTERPRISE, with the publication of our August 2005 issue. We wanted to demonstrate our commitment to the No. 1 principle of our Declaration of Financial Empowerment (www.blackenterprise.com/wealth/wbk.asp), to use homeownership to build wealth, by offering a $10,000 prize to a first-time home buyer, upping the ante of our monthly Wealth Building Contest prize of $2,000. More importantly, we wanted to inspire our readers to move beyond their dreams of homeownership, to take the action necessary to make it a reality. Mission accomplished: the inaugural contest was such a big hit last year--generating nearly 1,000 entries in just six weeks--that we've decided to do it again. While only one entrant could claim the $10,000 prize (our editors chose James and Kimberly Papillion of Baton Rouge, Louisiana), hundreds of contest entrants became winners by successfully buying their first homes.

This year, we're expanding the entry period to give more of our readers a chance to enter the Own Your First Home Contest. From July 10 to Sept. 1, readers can log on to blackenterprise.com to apply for a chance to win $10,000 toward a home down payment. The contest winner will also be profiled in an upcoming issue. The contest is limited to first-time home buyers who meet the credit requirements to qualify for a mortgage. In addition, entrants must write a brief essay about their pursuit of homeownership.

Closing the wealth gap between black and white households remains at the heart of the BE mission. And homeownership is the foundation of individual wealth for most Americans. We will continue to provide the information and inspiration to help you to navigate the journey to first-time homeownership, whether via articles in the magazine, live appearances by editors at homeownership conferences; interactive links and calculators at blackenterprise.com, or BE Keys to a Better Life nationally Syndicated radio reports. However, it's up to you to take the first step to explore your options as a first-time home buyer. Make today the day you decide to prepare for a home to call your own.

For contest rules, log on blackenterprise.com today.