Welcome to

Home Buyer

Orientation

This is my house.

“If I hadn’t found Habitat,

we would still be living in

that one-bedroom

apartment. And it wasn’t

the best of conditions. I

think the kids knowing that

they won’t have to move

again is very comforting.

We’ve made a lot of moves

over the years – 13 in fact.”

Quote from a Habitat homeowner

ORIENTATION MEETING

What is Habitat? (HfHI)

Local Habitat Affiliate

Selection Process and Criteria

Application Information

Requirements If Accepted

Land/House Description

Mortgage loan application

Questions ?

What Is Habitat for Humanity?

Christian Ministry to Eliminate Poverty Housing

Open to all regardless of affiliation/Fair Housing Act

Non-Profit Organization

Began in 1976 by Millard and Linda Fuller

1400 Affiliates in over 70 Countries

Have Built, repaired and renovated more

than 7,000,000 Homes

Habitat Principle -

Homes are: Simple - Modestly Sized - Decent - Quality

Materials, Affordable – No Interest Loan, Volunteer

Labor

Northwoods Habitat for Humanity

Affiliate of Habitat for Humanity International

Founded in 1990 as Bemidji Area Habitat

Managed By:

Volunteer Board of Directors – sets policy

Volunteer Committees – help with the work

Staff – responsible for carrying out policy

56 Homes sold to families since 1990

Funds to Build Homes come from:

Individuals

Churches

Corporations

Other Non-Profit Organizations

The “Fund for Humanity”

ReStore revenue

SELECTION CRITERIA NEED (at least one)

Unsafe – Crime, Drugs

Unsanitary Conditions

Overcrowding

Cost Burden

Does Not Meet Housing Code

ABILITY TO PAY Gross Income 30% - 60% County MI

Cannot Qualify for a Conventional Loan

Debt – Cannot Exceed 25% of Gross Income Combined Income of All Adults in Household

Reasonably good credit

Establish an Auto-Debit account for mortgage payments

WILLINGNESS TO PARTNER 300 Sweat Equity Hours per adult

Be a Good Ambassador for Habitat for Humanity

“Clarence Jordan… dreamed of homeowners who would become full partners giving

over and above their house payments to help others have a decent place to live.” From Kingdom Building for the 21st Century, Voices from the Soul of Habitat for Humanity, 2006

Income Requirements (EXAMPLE ONLY, GUIDELINES MAY CHANGE)

# in Minimum Yearly Maximum Yearly Household Income - Gross Income – Gross ----------------------------------------------------------------------------------------- 1 $15,300 $40,700 2 $17,450 $46,500 3 $21,720 $52,300 4 $26,200 $58,100 5 $30,680 $62,750 6 $35,160 $67,400

Seven or more persons – figures may be adjusted (these figures are for illustrative purposes only)

APPLICATION Application Packet: Income/Debt Worksheet, Application, Borrower’s Authorization (income, landlord, etc.) Complete All Information: BE HONEST!!

- If Married, fill out both applicant sections – you cannot be separated – marital status must be resolved

- Income for all Adults that will be living in the household - Monthly Income: Salary + Food Stamps + Disability + SSI + Alimony + Child Support - Monthly Debt – credit cards, installment loans, past debt - Assets – list all property owned (land, cars, bank accounts) Return all required attachments: - Checklist attached – application is incomplete if all

attachments are not submitted with the application

Why buy a house from Habitat? You pay no profit & no interest

Example: $100,000 house purchased from the open market is worth $100,000 and you pay $182,500 by the time you finish paying for it (at 4.5% interest for 30 years)

A house appraised at $100,000 purchased from Habitat costs you about $90,000 and you pay only $90,000 by the time you finish paying for it

Habitat holds a “silent second” mortgage for the $10,000 difference, forgiven at the term of the mortgage.

It is important that you understand that your payment could change annually because your property taxes and insurance may increase.

Your mortgage is an income based mortgage. That means your principle payment may increase if your income is higher.

Rent vs. bank loan vs. Habitat loan (based on 3 bedroom unit, using median rent in Bemidji area,

assuming escrow payments in loans)

RENT

$1,047

BANK LOAN

$650

HABITAT LOAN

$497

REQUIREMENTS IF ACCEPTED (being a good partner)

Sign a Letter of Intent to purchase

Complete 300 Hours of Sweat Equity

per adult (125 hours of construction,

Family-Friends-Coworkers can earn 50

construction only)

Attend regular Education/Support

Meetings (HomeStretch, Financial

Literacy, Habitat Coursework)

Weekly contact with Mentor

Complete a minimum of 10 hours

per month

Sign Mortgages and Notes

HOME DEDICATION!

Be a good ambassador for Habitat

BASIC HOUSE DESCRIPTION (simple, decent, affordable – no frills!)

Modestly sized lot within city limits

Generally lots are 50’ by 150’

Smaller lots allow for affordability both for purchase, and later, for property taxes

900-1250 square feet depending on family size

Vinyl Sided Exterior with covered entrance, Living Room, Dining Area, Kitchen, Bathroom,

Utility Room, Appliances, and Storage Shed

Basic House Design modified to fit family needs – some options, but not custom-built

May be an existing home that is renovated

Average Mortgage Payment 30% of your monthly income, includes:

Principal / Insurance / Taxes and “allowance” for utilities (based on Section 8 and HUD figures)

Average Cost $100,000 (example only)

Monthly payment 30% of income over term of the loan

includes principle and escrow for insurance and taxes

Annual income submitted to the office, payment may increase

Length of Mortgage = 25 to 30 Years

During the partnership period it is important

that income and debt remain the same as

time of application to the program.

When home is complete and

appraisal is received – move to

mortgage loan application:

After approved for program:

Report changes in

household

Addition of family

members

Additional income

Loss of income

Changes may affect

eligibility and are

required to ensure

you are able to

afford a mortgage

payment.

Please note: upon purchase of your home,

you will be required to report income ANNUALLY

until you pay off or sell.

Restrictions on selling IF YOU NEED TO MOVE…

You cannot sell your home on the open market

during the first fifteen years of your mortgage

without first offering it back to Habitat for

Humanity (right of first purchase).

If you sell your home back to Habitat or sell it on

the open market, you will be responsible for

paying back the amount of the second

mortgage as well as sharing any equity realized.

If you pay your house off early or refinance, you

may be responsible for paying the second

mortgage.

Please Be Aware:

There is no promise or guarantee that if you

attend the orientation meeting you will be

selected.

There is no promise or guarantee that if you are

selected you will be able to purchase a home in

the year you are selected.

Family Selection Process:

›Orientation Sessions

›Completed Application and required documents DUE

September 30, 2020 - BY 12:00 P.M.

›Family Selection meets to review apps

Home Interview and Home assessment scheduled

›Applicants informed of progress

›Not meet requirements or schedule 2nd interview (if needed)

›Family Selection meets to select families to submit to Board

Committee makes recommendation to Board

›Applicants informed of status

APPLICATION & FORMS Qualification Packet

Income to debt ratio

Application

Include everything on the checklist

One-on-one assistance if needed

Call for an appointment if you need

assistance completing the application

Call or email if you have specific questions

Schedule an appointment with staff to verify

all required information is submitted and

application is complete.

QUESTIONS?

Questions/Concerns after this meeting, please

call the Habitat Office (218) 751-4649

Mail Completed Applications to Drop off Completed Applications at

PO Box 1067 or Habitat for Humanity Office (ReStore bldg)

Bemidji, MN 56619 1357 Exchange Avenue SE

Phone: 218-751-4649

Fax: 218-444-3105

Email: habitat@paulbunyan.net

Website: www.habitatbemidji.org

Good Luck!

QUESTIONNAIRE

• Please answer these 10 questions.

• All answers can be found in the

slide deck.

• Guess if you must, you won’t be

graded!

• Email answers to

habitat@paulbunyan.net and an

application will be emailed to you

or we can mail one or

• Bring your answers to the office

and pick up an application.

1. What does “partnership” mean to Habitat?

2. What kind of house will be built for a

successful Partner Family?

3. Which President brought notoriety to Habitat?

4. You will be paired with Mentor from our

Family Support Team. What do we expect

from you regarding your Mentor?

5. If you want to sell your home, what do you

need to do?

6. After you have purchased your home from

Habitat, what will you need to provide us

annually?

7. Will your principle payment ever change?

8. Will you be allowed to make changes to your

home during construction?

9. What 2 random words didn’t seem to fit in

the presentation?

10. How much interest do you have to pay Habitat for your home?