How it Works
Applying to the Homebuyer program is a lengthy process. The time it takes to apply depends on when you inquire about the program, our application schedule, and our building schedule. In general, we only accept applications when we are ready to begin building homes and we only accept applications for the homes we intend to build next. When you apply during an open application phase, you apply for the next set of homes we plan to build.
The application process for the Homebuyer program is split into two application phases: the program phase and the loan phase. When you initially apply to the Homebuyer program, you submit and complete a program application. If you are selected and you complete the program requirements, you will submit and complete a loan application. Below we discuss the program phase of the application.
This is an in-person information session about the program, the homes we build, where we are building, and what it takes to qualify. It is about an hour long. If you have attended orientation in the past, or you want to apply at a later time, your attendance at orientation is good for one year from the date of orientation.
After you attend orientation, you should consider whether it is the right time to purchase a home and whether a Habitat home fits your housing needs. You may want to wait to apply to clean up your credit, you may want a different style of home than what we are building at the time, or you may have other priorities that may make contributing sweat equity more difficult. Take the time to seriously consider whether you are ready for homeownership.
Before you begin working on an application, you should determine whether you are eligible to apply and participate. Click here to review our eligibility requirements.
2. The Application
Once you determine you would like to apply, you should begin to collect the documents we require. In general, you need to provide documents verifying the information you put on your application. The documents you give us will depend on your current situation, but we typically require:
- Proof of income. This may include copies of tax transcripts, paystubs, public assistance award letters, child support payments, etc.
- Bank account statements
- Credit Card statements
- Rental agreement/current lease and rent receipts
- Copies of all regular monthly bills, invoices and account statements.
- Documents showing other debt. This may include auto loans, student loans, medical debt, collection accounts, legal judgments, liens, bankruptcy discharge filings, etc.
This list is not exhaustive. At orientation, we will provide you with a better idea of what we require.
Once you collect all of your documents, you should begin completing the application form. Use your documents to fill in the application. For example, use your checking account transaction history to estimate your average monthly expenses.
Be sure to submit a written cover letter with your application. This is a good opportunity for you to explain why you believe Habitat should select you for a home. This is also a good place to give us more details about what makes your application unique.
After you collect your documents and complete your application, you need to schedule a meeting with Habitat staff to review your application. We require you meet with us before submitting your application to ensure your application is complete and help you submit the best possible application. It is also a good chance to ask questions and address any concerns you may have about your application or the program.
Most people do not submit their application at their first meeting. Instead, many people must schedule additional meetings to collect all of the documents we require to support their application. The first meeting is usually the longest, about an hour long. Subsequent meetings are generally shorter.
3. Reviewing Your Application
Habitat staff perform an initial review of your application to determine whether you are eligible. Habitat staff will complete an initial review and determine your eligibility within three days of submitting your application. If you are ineligible, Habitat staff will send you a letter denying your application. If you are eligible, Habitat staff will refer your application to Habitat’s Selection Committee.
Habitat’s Selection Committee is a standing committee of the Board of Directors. Selection Committee members must apply to be on the committee, pass a background check, and successfully complete HFHI-ABA loan origination training.
The committee reviews applications referred by staff. Generally, it takes about two months to review your application. Once the Selection Committee reviews each application, it will come to a consensus and forward well-qualified applicants to the Board of Directors with a recommendation to approve. After the Selection Committee makes its recommendation, Habitat staff will contact you to go over next steps. Once the Board approves your application, you will begin working on your sweat equity hours.
4. Sweat Equity
Habitat uses the term “sweat equity” to refer to the hands-on involvement of prospective homeowners in the construction of their homes and in other Habitat events and community activities. Through sweat equity, you have an opportunity to invest physically and emotionally in the mission of Habitat.
Sweat equity is not a simple program requirement or a down payment on a home. Sweat equity is also not in any way meant to be a test for prospective homeowners to pass or fail. Rather, it is one of the key distinctions of the Homebuyer program. Sweat equity is a core tenet of Habitat’s program. It is Habitat’s most valuable tool in building partnership among prospective homeowners, Habitat staff and volunteers. It is intended to contribute to three fundamental goals in the Habitat program:
- Partnership: The mission of Habitat for Humanity is to assist applicants in the construction of their own home. Sweat equity provides meaningful interaction between prospective homeowners, Habitat volunteers, other homeowners, Habitat staff, community members and future neighbors. That is why we will often refer to prospective homeowners as partner households.
- Pride in ownership: As prospective homeowners work on their own homes, they begin to develop a sense of pride and attachment. You invest not only your money in a home of your own, but also time and energy, and witness the work of others on your behalf.
- Development of skills and knowledge: On the building site, you will gain an understanding of the construction of your home which we hope will help you as you maintain and care for your home over for years to come.
Prospective homeowners begin their sweat equity after being accepted into the program. Each adult of your household who is over 18 years old at the time you submit your application must complete a minimum of 250 hours of sweat equity. It usually takes 10 to 12 months to complete 250 hours.
Since many future partner families have never owned a home before, we require that you complete an online course to learn more about buying a home and to prepare you for homeownership. We utilize eHome America, a 15-hour comprehensive online training that also provides one-on-one housing counseling and a certificate of completion.
Please note: there is no financial value placed on sweat equity, and it is not considered a down payment for a home. If you withdraw your application before completing a house or otherwise leave the program, there is no financial compensation for sweat equity hours already completed.
Please also note: we are committed to providing an equal opportunity for every person to successfully participate in our homebuyer program. You have a right to request reasonable accommodations. If you have questions about your right to request reasonable accommodations, or have any concerns about participating in our program, please contact us.
5. LOAN PHASE
Once you complete your sweat equity hours and you receive your certificate of completion for homebuyer education, you will begin working on your loan applications. In general, we require you to submit three loan applications to three different financial institutions.
We will help you complete your loan applications, and if you’re approved, we’ll make sure your loan will be affordable for you (we won’t approve any financing that is unaffordable, or has any predatory features). To help offset the cost of a mortgage, we also offer down-payment assistance to eligible buyers.
If you’re not approved for a traditional home loan, we offer in-house financing. In essence, Habitat acts as a lender of last resort for folks who may not qualify for traditional or conventional lending products.
One way or another, we try to make it work.