Self Help Housing
What is Self-Help Housing?
It is a program designed to make homeownership possible for low income households who may not otherwise qualify for conventional home financing.
- A single person or a family unity may qualify.
- Income must not exceed 80% of median income guidelines for the county.
- Must have at least 2 years of stable and dependable income with an expectation that income will continue.
- Good credit is great but if one does not have credit third party verifications can be used.
- Must have enough income to stimulate a mortgage and pay the monthly mortgage payments, which include property taxes and insurance.
Who Will I Work With And How Much Money Do I Need To Put Down?
You will work with the an approved group of households. The group elects officers, holds regular meetings and will work together on all of the homes in their group. A group usually consists of 5 or more households each containing 2 builders. Each household must contain at least 1 person party to the note and the other person can be a volunteer. The construction is done under the supervision of a construction foreman who teaches you and the group how to build your homes.
Remember, there is NO Down Payment!
You pay out of pocket for the credit report, a homebuyer education course, some tools, and construction insurance before construction begins. You will pay some property taxes during your home construction and closing costs upon completion.
What are the terms of the Owner-Built Mortgage Loans?
The loans are 33 or 38 years to make payments more affordable. Loans are based on USDA's current interest rate, but subsidies may be provided that can reduce the interest cost depending on the family size and income. In addition, low interest loans, deferred loans, and forgivable loans are part of the financing package available to qualified applicants.
How Long Does It Take to Complete The Homes?
Generally construction can take 12-15 months. Each phase of construction is completed on each house in the group before moving on to the next phase of construction.
How Many Hours Of Labor Are Required By Each Household?
Generally, about 2,400 hours of labor per household is required (35 hours per weekend). Hours include the labor of members of the household, including any teenager 16 years of age or older. Fifty percent of the hours may be performed by relatives, friends, or volunteers of the Self-Help household.
Do Households Need Construction Skills?
No. RCHDC provides a construction foreman that will order materials, instructs you and your volunteers in construction skills, and oversees the program. Each household receives technical assistance and instruction in the various skills required. The techincal work is subcontracted, but most is done by the families as a group.