One way of bridging the affordable housing gap is by use of “sweat equity.” When future home owners become part of a program which enlists their labor and that of others in building the homes, construction costs are reduced. In this way, families are able to purchase a home that they would otherwise not be able to afford.
These programs are often referred to as “self-help housing,” as homeowners work on one an others’ homes. Both the long-standing USDA Rural Development Mutual Self-Help Housing Program and Habitat for Humanity are examples of self-help housing. In both cases, in addition to sweat-equity, special mortgage programs help to make the homes even more affordable.
Habitat for Humanity
Habitat for Humanity International organizes local affiliates based on its mission of providing a decent, safe and affordable place to live. In Delaware, there are Habitat affiliates in all three counties.
Through volunteer labor and donations of money and materials, Habitat and its homeowner families have built or rehabilitated more than 500,000 houses. A nonprofit, nondenominational Christian housing ministry, Habitat invites people of all backgrounds, races and religions to build together in partnership.
USDA Rural Development
The Section 502 Mutual Self-Help Housing Loan program also serves low-income households who would otherwise be “unable to buy clean, safe housing through conventional methods. Families participating in a mutual self-help project perform approximately 65 percent of the construction labor on each other’s homes under qualified supervision. The savings from the reduction in labor costs allows otherwise ineligible families to own their homes. If families cannot meet their mortgage payments during the construction phase, the funds for these payments can be included in the loan.” (USDA RD)