Not exactly. Here’s what we will do, however…
After a Family Partner is selected for home ownership (see how that’s done in our blog post from last week), we either build a home (new construction) or rehab an existing home. These days, it’s far more likely that we’ll rehab an existing home due to land costs, funding availability, etc. In fact, we are currently seeking a Family Partner for a townhome on Bragg Lane in the City of Manassas.
The Family Partner provides 250 – 350 hours of sweat equity before they purchase the home. One hundred of their hours must be in construction and one hundred hours may be donated by friends or family.
Additionally, the family makes a 1% – 3% down payment and pays for closing costs at settlement. The home is sold to the family at cost and is provided with a zero-profit mortgage. Here’s a simplified example of the financing for an existing home:
Cost to buy the house = $100,000
Cost to rehab the house = $10,000
Sale Price (SP) = $110,000 (the amount of the 1st note which the family pays on over a set amount of time, i.e., 15-30 years)
Appraisal (A) = $160,000
A – SP = $50,000 (the amount placed in a “silent” 2nd note as equity to Habitat for Humanity which discounts over time unless the house is sold or refinanced)
Habitat for Humanity uses volunteer labor to help keep house costs down. By controlling the sales price and mortgage amount, families with very low- to low-incomes (30% – 60% of the area median income) are more likely to be able to afford home ownership in Prince William County, Manassas and Manassas Park. (Income chart)
If you’d like to learn more about applying for home ownership, here’s a link to our Home Ownership Interest Form!