We build strength, stability and self-reliance through shelter.

welcome

Applicant Information Meeting

Applicant Information Meeting

• Our goal is to provide information to you about our housing program so that you can decide if you want to apply.

• We have provided a space for you to take notes on the handout. If you are taking this class online we encourage you to print a copy and use the space provided to take notes.

• We cannot address specific financial questions during this meeting or outside of the actual application process.

• We have left time for general questions at the end, or if you are taking the online class, you can email us at mission@habitatect.org with your questions.

about us

• Habitat for Humanity is a Christian housing organization serving all people regardless of faith.

• The Christian guiding principles are:– to help our neighbors by selling homes for the cost to build or

renovate without making a profit.

– to believe that when we pick up a hammer and some nails, we can put aside our differences for the common good.

– to empower people by teaching them how to be a successful homeowner.

– that our homeowners can pay it forward to future homeowners simply by making mortgage payments which are reinvested in future homes.

We build strength, stability and self-reliance through shelter.

deserves a decent place to live.

everyone

We build strength, stability and self-reliance through shelter.

why

how

People in our community, and all over the world, partner with Habitat for Humanity to build or improve a place they can call home. Habitat homeowners help build their own homes alongside volunteers and pay an affordable mortgage. With our help, Habitat homeowners achieve the strength, stability and independence they need to build a better life for themselves and their families.

the program

• Each year “to be built” homes or renovated homes are made available for purchase to eligible applicants.

• Applicants must live in the service area shown to the right.

• The purchase price of each home is based on market value and the cost to build or renovate.

• Financing is available

– in rural areas by the United States Department of Agriculture (USDA) or other approved lender, and

– in non rural areas (Norwich, New London and Groton) by Habitat for Humanity or other approved lender.

– In all areas by Habitat for Humanity as a backup lender.

• It can take up to 24 months from the date of acceptance to home purchase date. Home ownership is a long term housing solution.

• Homes available in this application round are in the handout titled “Homes Available.”

• Habitat homes are energy efficient with simple basic home finishes.

Energy efficient,

basic finishes

All homes are basic, but well constructed and very energy efficient. They may or may not have basements but all have standard finishes – white walls, basic lighting, laminate flooring, laminate counter tops, no custom finishes.

property preference form

You will be asked to number the available homes in the order of your preference.Available Property:

QTY # of

Bedrooms

City Sq.

Feet

Features

1 3 Commerce St.

Danielson

1,300

1 3 Serwan Ave.

Willimantich

1,000

the program

• We sell Habitat homes to selected applicants who are:– In need of better housing

– Willing to partner with Habitat and

– Able to pay an affordable mortgage

• Program requirement– Our program serves those who cannot obtain homeownership

through traditional lending, but can pay either a USDA, Habitat or other approved lender mortgage.

– To be eligible for the program, an applicant’s total household income cannot exceed 50% of the area median income by household size as defined by HUD.

income guidelines

Income must fallwithin the following ranges

Household Size

Applicant Minimum Income

Household Maximum

Income

One $30,800 $35,950

Two $30,800 $41,050

Three $30,800 $46.200

Four $30,800 $51,300

Five $33,300 $55,450

Six $35,750 $59,550

Seven $39,640 $63,650

Eight $44,120 $67,750

“Since moving into this home, the children have not missed school because of an asthma attack, they are healthy and happy here”. Maritza

everyparent

wants a better future for their family

Basement of former apartment, mold throughout

need

willingness to partner

Pre purchase and Sweat equity• One applicant: Total of 250 hours

– 150 hours by the applicant• 100 hours must be in construction to learn valuable home

ownership skills• 50 hours must be program requirements

– 100 hours by others

• Multiple applicants: Total of 350 total hours– 250 by the applicants

• 150 hours on construction• 100 hours on program requirements

– 100 hours by others

• Other hours can be donated by friends & family to help create a post purchase network of support

.

Post purchase• A long term commitment to pay your mortgage,

maintain your property and communicate with Habitat for Humanity as needed.

ability to pay an affordable

mortgage

• Housing Expense– We expect that applicant’s

with a housing expense ratio at or below 29% of their income have the ability to pay a mortgage.

– Housing Expenses included in this calculation are:

• the mortgage payment

• taxes

• interest and insurance.

• Total Monthly Expenses– Applicant’s whose total monthly

expenses are at or below 41% of their income are considered to be able to pay both housing expenses and other credit obligations.

– Total Monthly Expenses included in this calculation are:

• Your housing expense • any other monthly credit

obligations (car, credit cards, etc.)

We use ratios to determine whether the applicant’s income can meet the anticipated monthly housing expense and all other monthly expenses. You must meet both ratios.

Housing Expenses

Mortgage and Interest $ 347.22

Taxes $ 333.33

Insurance $ 83.33

Total Monthly Housing Expenses $ 763.89

Monthly Income $ 3,000.00

Housing Expense Ratio 25.5%

Maximum Ratio 29.0%

An example using a $125,000 first mortgage over 30 years and annual income of $36,000.

Total Monthly Obligations

Housing Expense $ 763.89

Car Payment $ 300.00

Credit Cards $ 166.11

Total Monthly Credit Obligations $ 1,230.00

Monthly Income $ 3,000.00

Monthly Obligations Ratio 41.0%

Maximum Ratio 41.0%

In addition to these expenses, households would still need to plan to pay for utilities like heating, electric, water, sewer, other household

expenses and future home maintenance.

how does Habitat sells homes affordably

when I can’t qualify for traditional lending?

Shared appreciation agreementA promise to pay if a triggering event occurs and the house has gained value that is not the result of improvements made by the

owner. You make no monthly payments, but the shared appreciate agreement balance is due in full if a triggering event occurs. If no triggering event occurs then the shared appreciation balance is forgiven at the end of term.

Your 1st mortgage is what your monthly payments are based on & is calculated using the 29% ratio explained earlier.

• The 2nd mortgage is payable only if triggering event occurs. Examples of a triggering event are:• You refinance, sell or transfer the home, or don’t pay the mortgage.

• You make no monthly payment, but the 2nd mortgage is due in full if a triggering event occurs. • If no triggering event occurs the 2nd mortgage is forgiven at the end of the loan term, in this example after 30 years.

Step 1. Learn about the program through the applicant information meeting.

Step 2. Complete the Prequalification Process

•Curious if you fit our program guidelines? Complete the prequalification packet and mailing it back to us. We will send you a letter and let you know if you’re a fit.

•Reminder: This is Step 2 you haven’t been approved for a home at this stage.

Step 3. Full Application

•If you fit our Step 2 program guidelines you will be invited to complete a full application. You will be asked for more pay stubs, bank statements, utility bills, & other documentation.

•This is the application for homeownership.•During this step a home visit will be scheduled and we will assess your current housing to determine need.

Step 4. Evaluation

•We will use a scoring system to rate each fully completed application objectively.

•Rating criteria are - need, willingness to partner, and ability to pay.

•The highest scoring applications based on the number of houses we have available will be selected for a home.

Multi Step selection process

what happens if I’m not selected?

– Don’t worry if your application is not selected in this round you can reapply.

– You will receive information about why, with referrals or suggestions on steps you can take to strengthen your chances of being successful the next time you try.

– We have many more projects in the works, so keep trying.

Many more houses coming

Mail this checklist back with:

Attendance at an Applicant Information Meeting is required before receiving a pre-qualification packet to complete. Visit www.habitatect.org/homeownership to find out when the next in person meeting will be held or complete the meeting online. Those who opt to use online format must complete the online survey as verification of completion.

A copy of any one of the following must be included as evidence that families are citizens or permanent residents. Families must also reside in HFHECT Service Area Map attached.

o Certified birth certificate o Unexpired US Passport o Department of State Form FS 240, FS 545, or FS 1350 o Certificate of US Citizenship form N-560 or form N-561 o Alien Registration Receipt Card (aka Permanent Resident Card) o Foreign passport with temporary I-551 stamp with unexpired date on it o INS form I-94 indicating INS has approved it as temporary evidence of lawful admission for

permanent residence.

Attached forms completed, these forms include: o Pre-Qualification Certification and Authorization Form - page 3 o Pre-Qualification Form - page 4-5 o Property Preference form - page 6 o Demographic Form

The two most recent pay stubs from each employer and documentation of all others forms of income in your household.

The first two pages of your 1040 Tax form for the two most recent years (If you have not yet completed your taxes for the past year, then provide your W-2 forms)

$20 for a single applicant, $25 for an application with a co-applicant, to obtain a credit report (Payment options - check, money order, cash or debit card)

Mail the documents to: Habitat for Humanity of Eastern CT

377 Broad Street, New London, CT 06320

Pre-Qualification Checklist

We build strength, stability and self-reliance through shelter.

Thank you!

Questions?