Earlier this month I joined Delaware Senators Tom Carper and Chris Coons in announcing USDA funding support for a project that will help 24 limited-income families build their own homes. It’s called Self-Help Housing.
Under the program, limited-income credit-worthy families work together to build their own houses. Usually, about eight families work together under the guidance of a construction foreman and the process takes about a year. The program requires applicants to provide at least 65 percent of the labor, and at closing, this contribution becomes their “sweat equity.” At the end of the process, USDA provides a direct homeownership loan at an interest rate of as little as one percent.
"The Self-Help Housing Program is one that instills a sense of pride in individuals as they work to build the very structure they will live in," said Senator Carper. "Homeownership is part of the American dream, and programs like the USDA's Rural Development Self Help Housing Program make that dream more accessible as we work our way out of this long and difficult recession," Senator Coons said.
On average, each family contributes about 1,500 hours of labor to the project. That adds up to about $32,000 in sweat equity. That’s a sizable sum when you consider that the average income of participants in the program is under $28,000.
The homes are Energy Star rated, and pass inspection before they can be occupied. No one moves into a home until all of them are finished. The Technical Assistance Grant that will make the project possible was provided to the Milford Housing Development Corporation (MHDC) which will provide selected applicants with credit counseling and construction training. All of the homes are to be built in Kent and Sussex Counties.
The Self Help Program has functioned for decades, and it is predicated on the idea that, as a country, we can live within our means while still making the investments we need to prosper. The program follows a balanced approach. Everyone involved plays a part and no one has to bear the entire burden. Since the start of the Obama Administration, about 60 Delaware families have used this program to become homeowners.