Habitat provides a 0% mortgage for home buyer families that are at or below 30% of a families income. If an ABWK family spends more than 30 % for their housing expenses how do affiliates create an affordable payment mechanism? Also, how do affiliate ABWK underwriting standards compare with your home building standards?
Half the population we serve in the Twin Cities are seniors. Most are on a very low fixed income. They may not spend 30% for housing but have other serious expense issues that need to be considered. Many seniors can continue to live in their home because their housing expenses are low (many have paid off mortgages). Yet, many still struggle mightily because of rising expenses such as medical, utility and property taxes.
HFHI has said that we should use our home building underwriting standards with some minor tweaking for ABWK families. However, our home building takes the best rated low-income families that have stable jobs and incomes. ABWK families had stable jobs and incomes but now most do not. They would never make it through our home building underwriting standards. Even if we significanly adapted our qualifications, many would have difficulty making consistent monthly payments. Also, how would we handle loan defaults? Foreclosure???
At TCHFH, we provide a 0% forgivable 7-10 year mortgage that is payable upon sale or refinance. It is a hand up (and much less than what we give home buyers) for the families in these circumstances. After interviewing many low-income (below 50% AMI) homeowner families we have come to the stark reality that low-income homeowners and future home buyers need a very different approach!!!
As an organization we wear many hats. Traditionally, we have seen ourselves as a volunteer home building/ construction company/banker. However, as a provider of services to homeowners, we should also see ourselves to some degree as a restoration and rehabilitative/project manager/social worker. This may not be an easy transition, but it will give your ABWK program the best opportunity to grow and make a significant impact on your community. abwk habitat for humanity