1. What is self-help housing?
Self-help housing is a way for people with low incomes to become homeowners. Self-Help Enterprises guides families through the process of applying for a loan and of building their home. Families join 8-12 other households to help each other build their houses. By working together, they also build relationships and neighborhoods. Everyone works on all the houses in the group, and everyone moves in at the same time.
2. What is necessary to make self-help housing successful?
a) Guidance/assistance from Self-Help Enterprises’ staff experienced with loan applications and house construction;
b) Mortgage loan financing at low rates through special homeownership programs; and
c) Families who are ready to build their homes.
3. How many hours of labor will I and my family be required to contribute to the construction of all the houses in the group?
Generally, about 1,600 hours of labor per household are needed to complete all the houses in the group. Each family contributes at least 40 hours each week to the building group during the 9-11 months of construction. These hours include the labor of all owners, any child 16 years of age or older, and up to 3 helpers approved by Self-Help Enterprises.
4. When does the construction of my home take place?
Most of the construction takes place on Tuesday-Saturday between 8:00 a.m. and 5:00 p.m. If you are employed during the day, some work can be done in the evenings and on Sunday. However, a daily labor force is essential to completing the houses on-time and within the budget.
5. How is my house plan selected?
Self-Help Enterprises has a variety of house plans available in each subdivision. Participants select their own house plan, depending upon the size of your family, what you can afford, and the size of your building lot.
6. Do all the houses in a group need to be completed before I can move in?
Yes. The program involves sharing labor to complete a common goal. All of the members of a building group will work on all of the homes, and every house will be completed within a few days of each other.
7. I’m a single parent. Can I participate in this housing program?
Yes. However, there is no reduction in the required labor commitment.
8. How will Self-Help Enterprises assist me in building my own home?
The staff of Self-Help Enterprises assists families by helping you prepare your loan application and organizing you and other participating families into building groups. In addition, Self-Help Enterprises also:
a) Locates suitable building sites.
b) Conducts meetings for participating families to explain the self-help program and other homeownership topics, such as taxes and insurance.
c) Assists families in selecting house plans which meet their needs and are within the approved loan amount.
d) Develops estimates for the costs of construction materials and subcontractors.
e) Prepares loan applications to fund the purchase of a building lot and construction costs.
f) Supervises and trains families in the proper construction of their homes.
9. Who pays for the cost of Self-Help Enterprises’ assistance?
If the building site is in a rural area (as defined by the United States Department of Agriculture), this assistance is funded by a federal grant to Self-Help Enterprises, and there is no charge to participants. In non-rural communities, some or all of the assistance costs may be included in the sale price of the house to be paid from mortgage funds.
10. Who provides the loan money for the land, construction materials, fees, and any subcontractors that are needed to build my home?
In rural areas, the United States Department of Agriculture (USDA) provides a loan to you for the land, construction materials, and subcontractors. If another source of mortgage financing is used, Self-Help Enterprises provides the construction financing which the family repays with a home loan after construction is completed.
11. What do I need in order to qualify for a housing loan?
Because each lender has its own requirements, individual housing sites may have differing loan criteria. In general, you will need to have:a) Good credit status (no credit may be acceptable);b) Stable income from employment or other sources;c) Income that does not exceed eligibility guidelines;d) Ability and willingness to meet the labor requirement; and e) Applicant must be a permanent resident or U.S. Citizen
Self-Help Enterprises complies with all state and federal fair housing and lending laws.
12. Are there additional homebuyer assistance funds available to help me pay for my home?
Yes. The interest rate on a USDA loan in a rural area can be as low as one percent (1%) based on your income. Self-Help Enterprises often has additional homebuyer assistance fund available from a variety of local, state and federal sources to help reduce the amount of the primary loan. Self-Help Enterprises’ staff will explain the details of the entire funding package to you.
13. How long will it take me to build a home?
Usually, construction takes between 9-11 months. The length of construction depends largely on how efficiently a building group works together.
14. If I have already owned a home, am I still eligible for the mutual self-help housing program?
In some cases, yes. If you have lost a home due to divorce or currently have a substandard home or if you have not owned a house in the past 3 years, you may still be eligible.
15. How much cash will I need to participate?
No cash is needed for a down payment because your labor is the down payment. However, you will be required to pay for a credit report and hand tools, which together will cost around $300. At the end of construction, there will be loan closing costs that you will be responsible to pay. The specific amount of these costs will be estimated prior to the start of construction and families save this money while the house is being built.
16. If I or a family member is disabled or handicapped, am I eligible for this housing program?
Yes. However, there is no reduction in the labor contribution for any participant/family. If you or another member cannot physically do construction work, you must make arrangements for additional work to be provided by helpers approved by Self-Help Enterprises. There are also modified house plans available when there are special needs in a household.
17. Can I sell my home after I build it?
Yes. However, as with any home, you will owe back the money you borrowed in your loan. Some loans may require that you share any profit you earn on the sale with the lender.