HABD Revives 5H Program, Opens New Pathway to Homeownership for Families

By Sym Posey | The Birmingham Times

For the first time in 15 years, the Housing Authority of the Birmingham District (HABD) has sold a home through its 5H Lease-Purchase Homeownership Program, marking what agency leaders call a renewed commitment to helping Birmingham families build long-term financial stability through homeownership.

Last month, which was National Homeownership Month, HABD joined City of Birmingham leaders, commissioners and community partners for a ribbon-cutting ceremony celebrating the program’s first home sale to Blanche Wilder in Birmingham’s Historic Tuxedo neighborhood.

While the 5H program has existed for more than a decade, federal regulations kept it dormant until recently. Its revival is part of HABD’s 2025-2029 Strategic Plan, which focuses on expanding affordable homeownership opportunities through financial counseling, strategic partnerships and housing development.

“HABD began its 5H Lease-Purchase Homeownership Program to ensure that we provide pathways to homeownership to the families we serve,” said HABD President and CEO Dontrelle Young Foster. “As we redevelop our legacy public housing communities, we know that our families deserve opportunities for affordable and sustainable homeownership, and HABD’s program provides just that.”

Foster said the first sale represents years of planning and collaboration.

“Our recent sales and ribbon-cuttings are the culmination of the hard work of many HABD employees, partners and, most importantly, our new homeowners,” he said.

The lease-purchase program allows qualifying buyers to lease a home for 35 months with the option to purchase it. During that period, monthly payments cannot exceed 30 percent of the buyer’s monthly income.

Applicants must earn at least $15,000 annually but less than 80 percent of the Birmingham metropolitan area’s median family income, have a minimum credit score of 620, maintain an acceptable rental history during the previous two years, be a first-time homebuyer as defined by the U.S. Department of Housing and Urban Development, be a U.S. citizen and complete a homebuyer education seminar through a housing counseling agency.

Transforming Communities

What sets the 5H program apart is that homeownership opportunities are not limited to HABD residents. Anyone meeting the program’s eligibility requirements may apply. However, residents who have completed HABD’s Family Self-Sufficiency (FSS) Program receive first preference for available homes.

The program also gives current HABD residents leasing a home the opportunity to purchase that property after living there for at least 30 days, provided they have an acceptable rental payment history and meet the program’s credit requirements.

“Our goal is to transform our communities into inclusive, mixed-use, mixed-income communities where homeownership is an option and contributes to community stability,” Foster said.

HABD currently has 29 homes available through the program in the Mason City and Tuxedo communities and plans to expand its inventory as additional redevelopment projects move forward across Birmingham.

To help make homeownership affordable, HABD offers forgivable second mortgages to qualifying buyers. The assistance covers the difference between the home’s sales price and the buyer’s primary mortgage, along with other available financial assistance. If the homeowner remains in the home for 15 years, the second mortgage is forgiven.

A Holistic Approach

The program’s success also depends on partnerships with local organizations. Neighborhood Housing Services of Birmingham provides housing counseling and case management for prospective buyers, while First Horizon Bank and Valley Bank offer mortgage products and financial counseling.

“The 5H program takes a holistic approach to providing affordable housing to low- to moderate-income borrowers,” said Kimekia Gamble, loan officer with First Horizon Bank. “Program participants complete required budget and money management counseling as well as homebuyer education through local community agencies. The 5H program provides substantial down payment assistance, making homeownership more affordable. Move-in ready properties are also a great benefit to program participants.”

Graduates of HABD’s Family Self-Sufficiency Program receive first preference because they have already worked toward financial independence through employment goals, income growth, credit improvement, financial literacy and savings.

“Prioritizing residents who complete the Family Self-Sufficiency program is important because these participants have already demonstrated commitment, discipline and readiness to take the next step toward long-term stability,” Foster said. “This approach ensures that the opportunity is not just about helping someone buy a home but helping them remain successful as homeowners.”

According to Foster, several Housing Choice Voucher participants and public housing residents have already used the FSS program to increase their incomes, build escrow savings and ultimately purchase homes.

Changing Lives

For Blanche Wilder, becoming the first homeowner under the revived program carries special meaning.

Originally from Mississippi, Wilder moved to Birmingham in the early 2000s. Although she was never a HABD resident, she participated in the agency’s homeownership program for several years. Inspired by her late husband to pursue homeownership, she attended classes at HABD community centers to learn about the buying process before closing on her home in April.

“Ms. Wilder persevered greatly in order to make homeownership a reality for her family, even through personal tragedy,” Foster said. “Her determination is a model for all other program participants and inspires those who have not even begun their homeownership journey.”

Carol Clarke, chief executive officer of Neighborhood Housing Services of Birmingham, said the benefits of the program extend well beyond purchasing a home.

“The 5H program is not just about selling homes; it’s about altogether changing lives,” Clarke said. “Every family that transitions from renting to owning begins building equity, confidence, stability, social status and generational wealth. Homeowners are more likely to invest in their properties, stay in their neighborhoods and become engaged in their communities, all of which strengthens neighborhoods over time.”

Clarke said many aspiring homeowners are held back by affordability, down payment costs, credit challenges and the belief that homeownership is out of reach.

“The first step is to apply for the 5H program by contacting Neighborhood Housing Services of Birmingham or completing an interest form at HABD,” she said. “The key is not to self-select out assuming you won’t qualify. Don’t confuse ‘not ready yet’ with ‘never.'”

Gamble encouraged prospective buyers to know their credit scores, establish a realistic monthly housing budget and begin saving before starting the homebuying process.

“Homeownership is possible with preparation,” she said.

Foster hopes the first sale sends a message to families across Birmingham that owning a home is within reach.

“We invest in our families through legacy, impact and opportunities,” Foster said. “We are working beyond homeownership to create a lifestyle that includes economic wealth, stronger families and inspiring hope—that homeownership is not the finish line but the beginning of a legacy. This milestone represents more than the sale of a home; it reflects HABD’s commitment to helping residents build a stronger financial future and expanding pathways to homeownership across Birmingham.”

To learn more about programs offered by the Housing Authority of the Birmingham District (HABD), visit habd.org.