Home ownership the self-help way is branching out in south Pierce County.
The self-help housing program, funded by the U.S. Department of Agriculture/Rural Development, Community Frameworks and the Washington State Housing Trust Fund, and administered locally by Northwest Housing Development, involves low-income families in nearly every aspect of residential construction. Without the program, it would be virtually impossible for the families to afford conventionally financed, contractor-built homes.
The 17-home Provence subdivision in Graham, just off State Route 161 and about two miles from Frontier Park, is an example of what the 65 percent sweat equity can produce. And now Northwest Housing Development is looking to do more. It’s trying to “generate some interest in the Eatonville area for our program,” said Judy Kelly, housing coordinator.
Applicants to the program must qualify for a USDA Rural Development loan – with monthly payments as low as $800 – and put in 35 hours per week on construction, both on their own homes and helping other applicants with theirs. The other basic qualifications are tied to income and credit scores, Kelly explained.
Northwest Housing provides technical assistance from start to finish, including: step-by-step construction supervision, assistance with buying building sites, and house plans and hiring subcontractors.
Kelly said the self-help method is a way to obtain a new home at an affordable cost. There is no down payment, low interest on loans (the rate ranges from market to 1 percent), and cost-savings by eliminating contractors’ costs through the do-it-yourself effort.
When land becomes available and is approved by Rural Development, an agency of the U.S. Department of Agriculture, qualified applicants apply for a loan through Northwest Housing Development. When all members of a building group (usually six to 10 applicants) have been approved for a loan, a series of preconstruction classes are held with the group. When the preconstruction phase is completed, construction begins. All households work together building the houses at the same time, under the direction of an experienced construction supervisor employed by Northwest Housing Development.
Lender requirements include:
• An applicant must have a dependable source of income.and an acceptable credit history,
• The applicant can’t already own or be buying their own home, unless the living conditions of that home are inadequate..
• The applicant must be unable to obtain home financing elsewhere and must be able to prove their income is adequate enough to repay the loan and cover taxes, insurance and all other household expenses.
• An applicant must be be in the “very low” or “low”-income category as specified by federal guidelines. Low-income means adjusted income at 80 percent or less of median income for the county where they live, and very low means adjusted income at 50% or less of median income. The eligible adjusted income is determined by the number of persons living in the household, and other circumstances.
Qualified “very low” income households may have a shorter wait before being able to begin construction. For example, to qualify as a “very low” participant, the adjusted annual income would have to be less than $35,400 for a household of four in Pierce County. The minimum annual income for qualification is usually $30,000. If the adjusted income is lower than $30,000, it’s unlikely that household will be able to show the lender satisfactory ability to repay the loan, Northwest Housing officials said.