Renting to a stranger to help with bills?

BALTIMORE —

When Barbara Terry fell behind on her mortgage payments earlier this year, she did the previously unthinkable. Through a local housing organization, she and her daughter, Imani, 9, rented part of their single-family house to a stranger.

"I had to do something," said Terry, 46, who helps formerly homeless people move into new housing. "I said, I am not going to lose this house. Thinking about having a stranger was not a pleasant thought. I have a daughter. But the positive part was that I needed extra help, and I wanted to help someone."

With residential mortgage foreclosures still on the rise, more homeowners nationwide are considering Terry's choice: whether to take in a boarder to keep their homes. Modest but growing numbers are turning to agencies nationwide like the St. Ambrose Housing Aid Center Homesharing Program in Baltimore, which screens boarders to find appropriate matches and relieve some of the fear of strangers.

"We're seeing greater numbers of marginal people," said Kirby Dunn, executive director of HomeShare Vermont, one of several hundred programs around the country that were formed since the 1980s to help elderly or disabled homeowners exchange spare rooms for income or, more often, help around the house. But those programs are now being pressed to meet different needs.

"Historically," Dunn said, "the people who come to us have been looking for someone to provide services in the home. But now, money is the bigger issue for folks. There's definitely an increase in people looking for a revenue stream."

Dunn said volume at the agency was up this year, with three or four times as many people seeking rooms as seeking boarders.

On a recent Saturday morning, while Terry attended a training session at her church, Katherine Ongiri, 47, celebrated her first week of living in Terry's two-story house, where she pays $500 a month, in weekly installments. The women work different schedules, but share an occasional meal. Terry helped Ongiri, who does not drive, get her check cashed, and treated her to lunch at Burger King.

"She's good company," Terry said. "And I don't mind helping because I know how hard it is when you've got to take the bus, because I've been there."

Ongiri said of Terry and her daughter, "I don't mind helping her keep a roof over that girl's head, because I know what it's like."

Economic hazards

The two women's routes to St. Ambrose Housing Aid Center, which culminated in Ongiri's moving into Terry's attic, describe the multiple hazards of the current economic downturn: stagnant wages, rising energy and food prices, exotic mortgages, job insecurity, neighborhood instability and the challenges for single working women to find safe environments for themselves and their children.

"A lot of prayer comes in," Terry said. "You don't want someone to try to take over, or cause problems once they get a foot in the door."

Terry bought her home six years ago, in a hilly neighborhood in northeast Baltimore, for $92,000, with a government-backed mortgage and monthly payments of about $800. She had never owned a home before, and was excited to move out of subsidized housing.

After two refinance loans, like many homeowners she does not understand her current mortgage, which is an interest-only loan. What she knows is that her payments are now more than $1,000 per month, and that she cannot afford them.

"Everything was going up except my paycheck," Terry said. "During the refinance, people tell you you can get money to upgrade your home, and your mortgage will go up a little bit. OK, but my paycheck is not rising."

Ongiri had housing and financial problems of her own. Earlier this year, after a cut in her income — she works as an airport wheelchair escort, for $6.25 an hour plus tips — she moved into a rented room, only to learn the house was in foreclosure. When she moved into another rented room in a rougher part of town, she discovered that the other residents were three men. "It could've been very unsafe for me," she said. "I wasn't afraid, but I was uncomfortable."

Roy Miller, a housing counselor at nearby Belair-Edison Neighborhood Inc., said most of the distressed homeowners he saw were unwilling to rent part of their houses to strangers, especially if there were children at home. Most home-sharing agencies have fewer than 100 matches at any time.

But Terry did not know where else to turn. She was behind on mortgage payments, but the idea of placing an advertisement in the newspaper or online scared her — anyone might show up at her door. Terry turned to St. Ambrose, she said, on the advice of her supervisor, who said the agency would screen potential housemates to find a match.

Finding a match

Like other home-sharing agencies, St. Ambrose conducts background checks on both parties, screening out people with criminal records or histories of drug or alcohol abuse, or those who cannot afford to be stable homeowners or renters. A 10-point questionnaire sorts candidates' feelings about pets, smoking, overnight guests and other points of compatibility.

"So far we've had no bodily damage," said Annette Brennan, the program's director (St. Ambrose provides a full range of housing services). "I say that quietly so as not to jinx it."

In some communities, local zoning laws or homeowner associations may limit the number of nonrelated people who can live in a house. Brennan said home-sharing could help some people caught in the housing downturn, but that its benefits were limited.

"Where we see it being of value is if someone is having short-term problems," she said. "The average stay of a sharer is about a year, and some are much less. It's good for someone leaving a marriage or a relationship, or going to school. You can't count on it as a regular income. It's a stopgap."

After counselors from St. Ambrose interviewed Terry and Ongiri, Terry drove to the house where Ongiri was living alongside three men. Right away, Terry said, "I'm like, she don't need to be living here with three males. I felt as if I could help her, get her out of that area and that living arrangement. I hoped she felt the same way."

Ongiri said she was relieved to know that "I wasn't going to move in and find the house was in foreclosure or something equally distressing."

Agencies have different procedures for resolving conflicts, none of them perfect. Ultimately the onus is on the home-sharers. In Maryland, owners have to give renters 60 days' notice to break their arrangement; renters must give 30 days' notice.

At the Human Investment Project, also known as HIP Housing, in San Mateo County, Calif., Laura Fanucchi said her organization called both parties every three months, "to see if there's any red flags." But the organization cannot help with eviction, other than to refer the owner to appropriate government agencies.

For Terry and Ongiri, the arrangement has been smooth so far. Ongiri said she hoped to wash the chairs on the wooden porch as a surprise for Terry.

"This is a good thing for me," Ongiri said. "I'm in a stable environment. I'm not worried about being held up in the neighborhood. I can keep a job, and look for a better one." The other day, she said, she saw a job advertisement that might suit Terry, so she clipped it for her.

Terry said if Ongiri were to fall behind on rent, "I feel we would be able to work out an arrangement. She wants to go to school. That encourages me more, having someone striving in the house. It's not like this job is it for her. She wants more than that. When I see that in people, it encourages me to want to help. That's my job."

Renee Drell, executive director of HomeSharing Inc., in Bridgewater, N.J., where home-shares rose 14 percent last year, said that as mortgage payments, heating costs and taxes have all risen, homeowners are asking for higher rents to share their homes, often more than seekers can afford.

But Dunn, of HomeShare Vermont, said people should not look at home-sharing only as a last resort or a financial Band-Aid. "When you look at the data on people living alone, they tend to die younger and be sicker. We've done surveys, and people say they're happier, sleeping and eating better, and feel safer in their homes with someone around. If I sold you that as a drug, you'd pay thousands of dollars."