May 2016 Info Meeting PP

Information MeetingMay 2016

Building Strength,Stability,and Self-Reliance through Shelter

No matter who we are or where we come from, we all deserve to have a decent life.  

At Habitat for Humanity, this is what unites us. Through shelter, we empower.

What is Habitat?• People in our community, and all over the world, partnering with us to

build or improve a place they can call home.

• Habitat homeowners help build their own homes alongside volunteers and pay an affordable mortgage.

• Habitat homeowners achieve the strength, stability, and independence they need to build a better life for themselves and their families.

• In St. Joseph County, we have built over 180 homes.

The Habitat Program is …• An Affordable Mortgage• An Interest-free Mortgage

• 0% interest, APR (Annual Percentage Rate) may be slightly higher• APR includes cost of financing the loan

• Homeownership Program• Home sold at Fair Market Value (FMV)• Sweat Equity

Benefits of Homeownership• Builds equity

• Fair market value (FMV) of a 2 bedroom apartment in St. Joe County is $780/month

• No equity in renting

• Fosters financial stability• Improves household stability• Provides a safe, healthy, living environment

How it Works1. Applicant (3 months)2. “Partner Family” (12-18 months)

1. “Sweat Equity”2. Homeowner Education3. Financial Plans4. Construction or Rehabilitation of Home

3. Homeowner (Life of Mortgage)

Application Process• Application turned in (May 2nd-June 14th)• 30 days after turning in app (July 14th at the latest)

• Notice of Incompleteness• Or

• Minimum Income Assessment• Or

• Denial (Adverse Action)

• After all documents received• Financial Assessment and Credit Check• Background and Sex Offender Check• In-Home Visit• Recommendations and Board Approval• Final decision letters mailed

Application Criteria1. Ability to Pay• 35-80% Area Median Income (Gross Income)

Household Size Minimum/Year Maximum/Year

1 $19,450 $32,000

2 $19,450 $36,560

3 $19,450 $41,120

4 $19,450 $45,680

5 $19,450 $49,360

6 $19,450 $53,040

7 $19,450 $56,720

8 $19,450 $60,320

Ability to Pay• Two years stable income (1 year above minimum income guidelines)

• Wages• Non-wages

• New mortgage payment must be less than 30% of gross income• New mortgage payment + monthly debts must be less than 43%• Satisfactory credit history in the last 12 months

Debt-to-income ratio (example)

Monthly Income

• $2,000

Monthly Mortgage Payment

• $475• 23.75% of income

Monthly Debts

• $50 Credit Cards• $200 Car Payment• $100 Student Loans• $350 Total• 17.5% of income

Total Debt-to-Income Ratio

• $825 = Monthly Debts + Monthly Mortgage Payment

• 41.25% of income

Ability to Pay• Minimum of 3 years after a foreclosure, deed-in-lieu, or short-sale

• Credit re-established for 2 years

• Minimum of 4 years after a bankruptcy discharge• Credit re-established for 2 years

• Collections, judgments, charge-offs, and liens must be resolved prior to closing

Credit Reports• Annualcreditreport.com• You are legally entitled to a free credit report each year• 1 from each credit reporting agencyTRANSUNIONP.O. BOX 1000CHESTER, PA 19022800-888-4213WWW.TRANSUNION.COM

EQUIFAXP.O. BOX 105851ATLANTA, GA 30348800-685-1111WWW.EQUIFAX.COM

EXPERIANP.O. BOX 2104ALLEN, TX 75013888-397-3742WWW.EXPERIAN.COM

Application Criteria 2. Need for Housing• In-home visit• Checklist of questions covering:

• Size of home• Structural Integrity• Mechanical Systems• Safety• Handicap Accessibility• % of income paid for rent

Application Criteria3. Willingness to Partner• Sweat Equity• Financial Plans• Debt Repayment Plans• Open Communication• Background Check• Sex Offender Check• Monthly “Next Step Meetings”

Sweat Equity• The time you must invest in Habitat• Attending Educational Classes

• Construction and Home Maintenance• Finances• Family Life Education

• Volunteering at the Habitat ReStore• Volunteering on Habitat Builds• Providing meals

Sweat Equity• Single Adult Household = 250 hours• Two or more Adults Household = 500 hours• Completed by those who will live in the home• 20% can be donated by family and friends• Ages 16 and up

• 14 and 15 can do certain tasks such as landscaping, some ReStore work

What Happens when you’re accepted• New Partner Family Orientation

• Covenant Agreement

• Begin sweat equity• Around 25-50% completion, you will receive a housing offer• After acceptance of housing offer, begin work on house

Housing Offer• Order determined by % of Sweat Equity earned• Offered multiple properties at one time

• 7 days to review• Two offers of multiple properties

• After first rejection: pushed to back of the line behind those who have completed at least 25% Sweat Equity

• Deselection if second offer is rejected

• Offer includes:• House plans and specs• Estimated value• Estimated closing date• Site plan• Build sponsor

Housing Offer (continued)• Properties offered determined by

• Grant specifications and requirements, if applicable• Partner Family Neighborhood Preference• Program Requirements• Habitat’s needs for houses to be assigned

• Offer made at 25% Sweat Equity Completion• Purchase Agreement Signed at 50%

The Home we Build• New home construction

• 1 or 2 stories• 3 or 4 bedrooms• Carpet, vinyl, or laminate flooring• Refrigerator and Range• Dishwasher and Garbage Disposal• Basement and Garage

• Rehab• Vary in Size, style, number of bedrooms, cost, etc.

• South Bend and Mishawaka Locations (primarily)• Handicap Accessibility Available

3 bedroom new home

• 3 bedrooms• 1120 square feet• 2 bath• Kitchen• Living Room• Utility Room

How to Apply• 3 criteria

3 Bedroom Floor Plan

How to Apply• 3 criteria

4 bedroom new home

• 4 bedrooms• 1280 square feet• 2 bath• Kitchen• Living Room• Utility Room

How to Apply• 3 criteria

Rehab homes

When we Build• Year-Round

• Busiest March-November

• Main office open Mon-Fri 8AM-4:30PM• Construction Tues-Sat

• 8AM-3PM• Can vary

• ReStores• Mon-Fri 9AM-7PM• Sat 8AM-6PM

• Additional Events

Owning your home• Program requirements complete• Home construction is complete• House Blessing• Purchase Agreement• Closing• Building equity

Cost• A hand-up, not a hand-out• An Affordable Mortgage• An Interest-free Mortgage

• 0% interest, APR (Annual Percentage Rate) may be slightly higher• APR includes cost of financing the loan

• At closing • $1,000-3,000 down payment (depending on grant requirements)• $500 closing costs• 1 year of homeowner’s insurance paid

• 15-30 year mortgage

How Your Payment Works• Principal Amount

• Reduces loan balance• Always constant• $300 average

• Escrow Amount• Pays for taxes and

insurance• $175 average

• $475/month total Total0

50100150200250300350400450500

EscrowPrincipal

The HABITAT DifferenceHabitat Homeownership

• 0% Interest• $100,000 x 30 years =

277.78/month• Total loan payment:

$100,000• $1,000 down payment• $500 Closing Cost

• 4% Interest (Average)• 100,000 x 30 years x 4%

= 477.42/month• Total loan payment:

$171,871• 10% Down Payment

Average• Plus a Closing Cost around

2-5% of loan amount

Traditional Mortgage

Facebook.com/SJCHabitat

@SJCHabitat

www.hfhsjc.org

• Phone• 574-288-6967• Ask for the Homeownership Department• Andrew– Homeownership Liaison• Montana– Homeownership Program Director

• Email• [email protected]• [email protected]

We can help!

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status, or national origin.

Thank you for Attending!