- What is the first step for Habitat homeownership?
- What documents are required to apply for a Habitat home?
- How do you choose homeowners for the Habitat homes?
- One of the selection criteria is “need for housing.” What does “need for housing” mean?
- What is good credit?
- What if my credit report shows outstanding collections, debt, bankruptcies, judgments or liens?
- What if I’m not financially ready to apply?
- What can I do to prepare before applying to Habitat?
- How long does it take before I can move into a home?
- If my application for the Homeownership Program is not approved, can I reapply later?
- What is Sweat Equity?
- I have to help build my house? What if I don’t know how?
- How much does a Habitat home cost?
- How is Habitat different from a traditional bank/home builder?
- How much do Habitat homeowners save?
- What are Habitat homes like?
- What do Habitat homes include?
- What is not included in a Habitat home?
What is the first step for Habitat homeownership?
The process of home ownership begins by submitting an application during an open application session. We generally accept applications for housing once per year. Check the Apply for a Home page to see if we are accepting applications at this time. During each open application session, Habitat staff holds an informational meeting to explain the Homeownership Program and hand out applications. Applications are also available on our website and at our office if you are not able to attend the meeting.
If we are not accepting applications, please check back later. We will post on the website as soon as we have an application round scheduled.
What documents are required to apply for a Habitat home?
- Completed Application for Housing, including a personal statement describing housing need
- $10 application fee for one applicant; $20 application fee for two applicants
- Social Security card
- Driver’s license or state-issued photo ID
- Landlord name and contact info
- Employer name and contact info (if applicable)
- Income documentation, including (if applicable):
- W-2 forms for most recent tax year
- Tax return for most recent tax year
- Paycheck stubs for past two months
- Government assistance award letters:
- Food Stamp/SNAP benefits
- Social Security and/or Disability benefits
- Documentation of alimony and/or child support
- Documentation of any other regular income received
How do you choose homeowners for the Habitat homes?
After an applicant hands in a complete application for housing with required support documentation, the Homeowner Selection Committee begins by evaluating an applicant’s financial eligibility. This consists of reviewing income documentation and a credit report. Items that may detract from an applicant’s financial eligibility include outstanding collections, excessive debts, recent bankruptcy and any unpaid judgments or liens. The Committee is also looking for sufficient, stable income to ensure the applicant is ready for the financial responsibility of homeownership.
If the applicant meets financial requirements, there may be a home visit. Here the Committee gathers information about the applicant’s need for housing and willingness to be an active partner with Habitat throughout the program. After the Homeowner Selection Committee approves an applicant’s eligibility it presents recommended applicants to the LHFH Board of Directors for approval.
One of the selection criteria is “need for housing.” What does “need for housing” mean?
“Need for housing” generally means that an applicant’s current housing is inadequate. The Homeowner Selection Committee typically chooses applicants who can prove at least one of the following housing conditions:
- Substandard Housing: Your housing may have maintenance and/or structural issues that create health and safety problems (such as mold, poor heating or plumbing, or unsafe construction.) Your house is overcrowded, or is not good for handicapped/disabled family members.
- Temporary Housing: You have temporary living arrangements or transitional/subsidized housing.
- Excessive Cost: Your total housing costs (rent and necessary utilities) are more than 30% of your income.
- Unsafe: Your neighborhood is unsuitable or unsafe for family members, especially children or elderly/disabled individuals.
What is good credit?
Good credit means that you pay all your bills on time each month and you don’t have excessive debt. Your credit is your responsibility and maintaining good credit is one of the most important thing you can do for your financial health. Having good credit means that you have a good credit report. A credit report is a record of the personal financial transactions that make up your credit history, such as credit cards, car loans, personal loans and negative items such as collections from utility or telephone companies.
How does your credit history look? You can check yours by getting your credit report. You are able to get a free credit report once a year from each of the three reporting agencies: Equifax, Experian, and Trans Union. To obtain a copy of your free credit report click on the following link: www.annualcreditreport.com
What if my credit report shows outstanding collections, debt, bankruptcies, judgments or liens?
The Homeowner Selection Committee considers the whole picture of an applicant and looks for applicants who are ready to accept the responsibility of homeownership. At the same time, we do not want to sell an applicant a home that she or he cannot afford. We do not expect applicants to have a perfect credit history. We do require applicants with negative credit accounts to have a plan to fix any outstanding collections or past-due items. We are unable to partner with applicants who have active, unpaid judgments or liens. Excessive debts and/or very recent unresolved collections may also disqualify an applicant.
Applicants who have filed for bankruptcy in the past should show a good credit history since the bankruptcy, and bankruptcies must have been discharged at least three years prior to the application for housing. Certain requirements may be waived in cases of personal or natural disaster.
If you are concerned about your credit history, you can contact the Lafayette Consolidated Government’s Neighborhood Counseling Services to obtain free and confidential credit counseling. To learn more, please visit their website or call 337.291.5450.
You may access one free copy of your credit report each year at: www.annualcreditreport.com
What if I’m not financially ready to apply?
Homeownership is a huge responsibility. Habitat’s goal is to help you become not just a homeowner, but a successful homeowner. If homeownership is your ultimate goal, but you’re not quite financially ready to apply, below are some tools that can help.
The Lafayette Consolidated Government’s Neighborhood Counseling Services offers free and confidential credit counseling, rental counseling, homeownership classes and homeless counseling. To learn more, please visit their website or call 337.291.5450.
You may access one free copy of your credit report each year at: www.annualcreditreport.com
Habitat for Humanity International’s Recipes for Financial Fitness: Click the “Let’s get started” link to see an online course that you can complete at your own pace.
What can I do to prepare before applying to Habitat?
If you plan to apply for Habitat’s Homeownership Program during the next application round, you can prepare by collecting your financial documents. Get a recent copy of your credit report and check to make sure the information is correct. You can get one free copy of your credit report each year at www.annualcreditreport.com
If you have outstanding negative credit items, you may want to develop a plan to address them with a credit counselor. You can contact the Lafayette Consolidated Government’s Neighborhood Counseling Services to obtain free and confidential credit counseling. To learn more, please visit their website or call 337.291.5450.
How long does it take before I can move into a home?
Habitat for Humanity is not a quick housing solution. The application process takes between one and three months. If an applicant is accepted into the Homeownership Program, the process from acceptance through moving into a home can take from eight months to two years, depending on available funding, construction schedules and the future homeowner’s Sweat Equity progress.
If my application for the Homeownership Program is not approved, can I reapply later?
Absolutely. We have limited available spots in our Homeownership Program. Sadly, this means we cannot accept every qualified applicant. If an applicant is not approved during the current application process, we encourage her/him to improve eligibility (if applicable) and reapply during a future application round.
Some of our partner families were denied the first time they applied due to outstanding collections and debts, income that was below our limits or other issues. They successfully improved their eligibility, reapplied and were accepted into the program.
If you need help finding community resources, our Homeowner Services staff can refer you to tools and resources available to help you improve your situation.
What is Sweat Equity?
Sweat Equity is the work a future Habitat homeowner spends helping to build his/her own home as well as the homes of other future homeowners. It is a central principle in Habitat’s mission of building community and partnering with families to provide “a hand up, NOT a handout.” Providing the opportunity for our future homeowners to work alongside volunteers and future neighbors to build their homes is one of the most unique, empowering and rewarding aspects of Habitat for Humanity.
Once you are approved by the Board of Directors to become a part of our Home Ownership Program, you must complete the required number of Sweat Equity hours at Habitat’s construction sites. It’s important for a future homeowner to give consistent, active participation on the construction site. In fact, most families exceed the minimum required hours (300-450 hours, depending on household size). Friends and family may help a future homeowner by volunteering with Habitat and donating their hours to help fulfill your Sweat Equity requirement.
If a future homeowner has conditions that prevent her/him from volunteering on an active construction site, staff will arrange for other opportunities to fulfill the Sweat Equity requirement.
If you would like to help at the construction site as a general volunteer, please contact our Volunteer Director by phone at 337.261.5041 or by email.
I have to help build my house? What if I don’t know how?
Habitat does not require any previous construction skills or knowledge to be a volunteer or a future homeowner. We have a fully trained staff and long-term volunteers who are eager to teach our future homeowners and volunteers the skills they need to be successful on the construction site.
How much does a Habitat home cost?
The current average cost for a Habitat home is $90,000. Habitat homes are sold to partner families for no profit and are financed with an affordable mortgage. The cost of the homes may be different depending on the number of bedrooms and construction phase.
Monthly mortgage payments vary depending on the length of the mortgage, but will not be more than 20-30% of a homeowner’s monthly income. Monthly mortgage payments include an escrow for homeowners insurance and taxes.
Habitat requires a pre-payment to be made at the mortgage closing (right before a homeowner moves into her/his home). The pre-payment is approximately $3,000. It is applied toward the closing costs plus homeowners insurance and taxes for the first year.
How is Habitat different from a traditional bank/home builder?
Habitat is a nonprofit organization that provides three distinct services in the homeownership process: home construction, mortgage financing and mortgage servicing. These services would normally be given by for-profit real estate businesses. Additionally, Habitat staff members serve as housing mentors, here to support our homeowners in learning the ins and outs of homeownership, getting through challenging times and celebrating successes.
By providing all of these services by ourselves, Habitat is able to offer its homeowners a substantial amount of savings. We are able to open the door to homeownership for those who would not be able to buy a home of their own.
Because Habitat builds homes with affordability in mind, Habitat homeowners have more limited choices about their homes than someone buying from a traditional homebuilder. While Habitat homeowners are able to choose things like the exterior paint color of the home, the homeowner will have limited choices about things such as the location of the home or the number of bedrooms and bathrooms inside the home.
How much do Habitat homeowners save?
Because Habitat is a nonprofit builder, we are able to sell our homes for what it costs us to build them. By selling our houses for no profit, our homeowners are saving, on average, $20,000 on the purchase price of their homes.
Because Habitat is a nonprofit mortgage lender, we are able to offer mortgage loans without charging high interest or fees. By accessing affordable home loans, our homeowners are saving an additional $50,000-$70,000 they would otherwise spend on interest charges over the life of the mortgage.
For example, a Habitat homeowner might buy a house from Habitat for $80,000, and pay less than $1,000 in interest and closing costs to Habitat over a 30-year mortgage. In the end, the Habitat homeowner will pay less than $81,000 for their home.
A non-Habitat homeowner might buy an equivalent house from a for-profit homebuilder for $100,000, and pay $60,000 in interest to a bank over a 30-year mortgage. At the end, the non-Habitat homeowner will pay $160,000.
What are Habitat homes like?
Habitat for Humanity, with its partner families, builds safe, decent, affordable houses. Our homeowners feel comfortable and secure in their new homes. Because we build houses with affordability in mind, Habitat homeowners have limited choices about their homes, including the location of the home.
Our homeowners generally are able to choose:
- Exterior paint color
- Countertop and cabinet colors
- Flooring shade (light or dark)
What do Habitat homes include?
Lafayette Habitat homes include the following:
- 950-1,150 square feet of living space, including porch
- Fire-resistant, fiber-cement siding
- Architectural-grade shingles
- Insulated windows with screens
- Two or more bedrooms, depending on family size, with closets in each bedroom
- Eat-in kitchen, with built-in cabinets, countertops and double-bowl sink
- Living room
- One to two bathrooms with fixtures, depending on family size
- Handicap accessible
- Steel entry doors
- Durable, hard flooring
- Water heater, central heat and air conditioning
- Range, refrigerator
- Washer-dryer hookups
- Ceiling light, fixtures and fans
- Vent/light combination in bathrooms
- Window blinds in bedrooms
- Telephone jacks and Category 5 wiring for cable TV/Internet
What is not included in a Habitat home?
LHFH houses DO NOT include:
- Dishwasher, washer, dryer
- Garage or carport
- Concrete patio
- Window treatments
Lafayette Habitat for Humanity is 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, national origin, age, marital status, sexual orientation or sources of income.