MUTUAL AND SELF-HELP HOUSING
Fast Facts
According to the Office of Management and Budget (expectmore.gov):
”No other program combines the unique features which make the Self-Help program a success. The Section 523 grants provide support to Self-Help sponsors who provide technical assistance, recruiting, training, and supervising to families to earn “sweat equity.” The Section 502 Direct loans provide subsidized financing which provides affordability and minimizes loan costs. This unique construction method also promotes strong communities by building close bonds among future neighbors. The program is also unique in serving the lowest income families who have no other homeownership opportunity, yet are able to succeed at a rate higher than other Section 502 borrowers and comparable to other borrowers.”
- For more than 40 years self help housing organizations have made homeownership affordable by enabling low income families to build their own homes. Section 523 Mutual and Self-Help Technical Assistance Grants are made to qualified nonprofit and local government organizations to provide technical assistance (pre-purchase counseling, construction supervision, loan packaging) to families who build homes in rural areas in conjunction with the Section 502 loan program;
- Over 100 organizations in 37 states participate in the Self-Help Housing program. These organizations support groups of eight to 12 self-help families who construct each other’s homes, and perform 65 percent of the construction labor. Through this “sweat equity”, each homeowner earns equity in his or her home, decreasing the cost burden and investing in the community;
- Over the last three years self help housing organizations have constructed some 3500 units of self help housing. While providing the opportunity for home ownership is the principal benefit of self help housing. There are other, substantial community impacts. Based on estimates from the National Association of Home Builders, the 3,500 Self -Help Homes constructed in rural America account for over 11,000 jobs and over $738 million in local income and $77 million in taxes and revenue;
- Over half of the participants in self-help housing are minority households. Despite the fact that families participating in Self-Help Housing have lower incomes that others receiving Section 502 loans, default and delinquency rates for Self-Help families are lower;
- Even in this time of turmoil in the housing market, Self-Help Housing is important. While there is surplus inventory in some communities, most units are either purchased before auction by investors or have operating costs beyond the reach of families who participate self help housing; and
- For low-income rural families, there are very few options for affordable housing. As a result, there is a substantial waiting list to families hoping for the chance to work nights and weekends to build their own home. In fact, self help housing organizations waiting lists total more than 50,000 applicants.
Click here to download the full Self-Help Success Paper