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Self Help Housing - NeighborWorks Sacramento Homeownership Center
Sweat Equity
If you can’t find it, build it!
Under our USDA Mutual Self-Help Housing program, families help build the homes they are purchasing. They contribute 35 hours of construction labor a week for 10-12 months while the homes are being built. Your construction labor is considered your down payment.
Your labor is known as sweat equity. The work of your hands is transformed into your asset, your equity, and your family’s generational wealth. This is all while learning the skills to build and maintain a home!
Homeowners cooperatively construct their homes in their assigned group. Members provide 60% of the construction labor, performing tasks such as clearing, digging footings, framing walls, hanging doors, and windows, painting, installing siding and interior trim, roofing, installing cabinets and countertops, and landscaping. All activities are performed under the direction of qualified construction supervisors. All trades work, such as plumbing and electric, are contracted to qualified companies.
Working together with your future neighbors, we are literally building stronger communities.
This program is only available in rural areas, so if you are someone who avoids the big city, it may be just the thing you are looking for.
Cost
No Cash down payment
Closing costs are included in the loan
Fixed interest rates as low as 1%
Mortgages are 33-year or 38-year terms
ELIGIBILITY
640 Credit Score or Higher, or strong alternative credit
80% of the Area Median Income or lower
Work a minimum of 35 hours a week for 10-12 months (Sundays optional)
Must Occupy the Home as Your Permanent Resident
Be a permanent resident or citizen
Not have owned a home in the last 3 years
FAQ
Frequently Asked Questions
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What is the Mutual Self-Help Housing Program?
Housing Program? The Mutual Self-Help Housing Program makes homeownership a reality for many who think it’s out of their reach! Homeowners cooperatively construct their homes in their assigned group. Members provide 65% of the construction labor that goes into building their home. The construction labor provided by the families is known as “Sweat Equity” which is used to replace the down payment of the home. Therefore, no down payment is required and most participants in the Mutual Self-Help Program pay less for their mortgage payments than they previously were paying in rent and can get a tax deduction for the interest paid on their mortgages.
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How does a Self-Help Housing Program work?
Families must apply and qualify for the Self-Help Housing Program Technical Assistance is provided by NeighborWorks to help participants with loan processing and construction activities A group of 8-10 families will be selected to participate
Qualifying participants must attend a series of 4 educational meetings before starting construction
In these meetings participants will learn all aspects of the construction process and are trained to develop the skills needed to build their home. (NO CONSTRUCTION EXPERIENCE IS NEEDED)
After receiving the proper training families will be able to begin construction on their homes and will be allowed to move in when all families in the working group finish building their homes. -
Who provides the loan money for the land, construction materials, fees, and any subcontractors that may be required?
The United States Department of Agriculture (USDA) provides the loan needed to cover the costs for land acquisition, construction materials, and any subcontracting that is needed to complete the construction of the homes.
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How do I qualify for the self-help housing program?
640 Credit Score or Higher, or strong alternative credit
80% of the Area Median Income or lower
Work a minimum of 35 hours a week for 10-12 months (Sundays optional)
Must Occupy the Home as Your Permanent Resident
Be a permanent resident or citizen
Not have owned a home in the last 3 years -
What are the costs for participating in the Self-Help Housing Program?
Participants will need approximately $405 to begin construction. This includes:
$30 credit check fee for pre-eligibility
$75 fee for homebuyer education
$300 fee for your toolbox that can be paid in payments -
How many hours of labor does each family contribute to the construction of all the houses in the group?
Each family is expected to contribute 35 hours a week to the building group. As a result, every family will have contributed at least 1200 hours to the construction of the building group’s homes. “Family hours” includes the labor of all owners, any child 16 years of age or older, and 1-3 approved helpers (optional).
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How long does it take to build the homes?
It largely depends on how efficiently a building group works together. Usually the construction takes between 9-12 months.
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Am I able to choose my preferred house plan?
NeighborWorks has a variety of house plans available in each project area. Based on applicant’s loan amount and availability of each house plan each family will be allowed to select the house plan that they would prefer.
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Will I be allowed to select my own finished products, i.e. counter tops, flooring, etc.?
Yes. NeighborWorks will provide a wide selection of finished products that we will allow families to choose from. Our construction supervision will have some samples of our products for the family to view and select.
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If I’m a single parent, can I still participate in the program?
Yes. However, there is no reduction in the labor commitment for these families. There have been several single participants that have been able to complete the program in the past.
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If I’m not a citizen of the U.S. am I still eligible for the program?
Unfortunately, the program requires that the applicant must be a permanent resident or a citizen in order to be eligible for the program.
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What changes can I make to my home?
These are not custom homes and are required to be built according the USDA-Rural Development approved plans. Once you move into your home, you will be allowed to make any changes you would like.
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Are children allowed to work on the homes?
Children 12 and younger are not allowed at the work site to protect their safety. Children 14 to 16 are not allowed to help build the house. Children 16 years and older are allowed to help build the houses. They must be at least 18 years old to use any power tools.
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Is it possible to work on my own home and not be a part of the group?
No. Each participant family is required to share the labor on all homes within the group. This labor sharing agreement is a fundamental principle of the program.
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Can families with disabilities or handicapped members still participate
Yes. However, there is no reduction in the labor requirement for the participant’s family. If no member of the household can participate, the USDA State Director has to waive this requirement for household members and the household must find other substitutes (family members, friends, etc.) to fulfill their hour requirement.
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Are we allowed to sell our homes?
Yes. However, you are still required to repay the money you borrowed.
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When can I move into my home?
Families are required to enter into a contract with each other to share the labor on all homes with the group since the program aims to build stronger communities through the families shared labor. Therefore, families can move into their homes as soon as all families in the working group finish building their homes.