homeownership
Habitat homeowners are more likely to move up in their careers, further their education and become leaders in the community, than if they continue to pay too-high rents for substandard housing, living paycheck to paycheck.
Habitat for Humanity of Tuolumne County is committed to guiding homebuyers to become stable, self-reliant and successful homeowners. We accomplish this by thoroughly vetting applicants; and by providing education classes and continuous support during the application, loan and building processes.
Economic opportunity begins with the ability to live and work in a vibrant community, with access to safe, decent housing. According to a 2016 study conducted by Sonora Regional Medical Center, the median income in Tuolumne County is $54,000 and in Tuolumne County, 29 percent of renters spend over 50 percent of their income on rent.
Habitat homebuyers pay less on their mortgages than they previously did on rent.
The families who purchase Habitat homes earn 40 to 60 percent of the county’s median income and are considered extremely low to low income by the U.S. Dept. of Housing and Urban Development standards. Their children often qualify for the federal free and reduced school lunch program.
To be selected to be a Habitat homebuyer, families must live in unsafe, substandard or extremely overcrowded conditions. Homebuyers must also be willing to take financial education classes taught by Habitat and eHome America, which is counted toward their required 300 hours of “sweat equity.” They must pay off all medical debt before qualifying for a loan and must not have anything in collections to qualify.
Acquisition of a Habitat Home
A Habitat home is acquired through the use of a number of financing products designed for low-income, first-time homebuyers. The targeted monthly housing payment for home loans – including interest, property taxes, and insurance – is targeted at 30% of gross monthly income. The expected monthly payment for housing and all other debt at the time of purchasing the home so that a homeowner can be successful cannot exceed 41%. Therefore, financing is accomplished through the use of multiple loan components depending on availability.
Sales Price of Home: Based on Habitat International Policy, the sale price of the house is its Fair Market Value. Fair Market Value must be established by an independent, third party appraisal for each house. The sale price cannot exceed Fair Market Value.
First Trust Deed Loan: The buyer is prequalified with the third party lender USDA 502 loan program. This loan program is the first trust deed loan on the property.
Second Trust Deed Loan: The County of Tuolumne administers several grant programs to assist low-income homebuyers. If available, one will be qualified for a Tuolumne County Program loan to be paid after the first trust deed has expired.
Third Trust Deed Loan: Habitat Tuolumne will provide a mortgage loan subordinated to the First and Second Deed Loans. Based on the property value, the First and Second Trust Deed amounts, and any additional assistance available, Habitat Tuolumne will determine the amount of a zero-interest loan to reach the sales price of the home.
Down Payment Assistance: Several down-payment assistance programs may be available that requires sweat equity hours to be used to meet matching fund requirements. If available, one will be qualified for one of these programs.
Example of Financing Package
| Sale Price of Home | $215,000 (2018 Appraisal) |
|---|---|
| USDA Loan | $120,000 |
| Tuolumne County Program | $60,000 |
| Down Payment Assistance | $22,000 |
| Habitat Tuolumne | $13,000 |
