Habitat Housing Model
Habitat solves the dilemma of financing a home through the homeownership model.
In a nutshell:
- We identify eligible homeowners or Habitat Families.
- We help build them a home and have them take part.
- We house families and reinvest their contributions into building more homes for those in need.
- We help families build equity and save for their future through their interest-free monthly payments.
Habitat selects a Habitat Family based on:
- Level of need
- Ability to repay a Habitat mortgage
- Willingness to partner with Habitat
Family Selection Process:
Each family is required to complete a pre-screening form. Eligible applicants are asked to complete a full application form which is then reviewed by our family selection committee, a staff-supported group of volunteers who represent all aspects of society. Family finances and credit ratings are carefully considered before the committee interviews the family. References provided are checked and communication is made with the landlord and employers. A personal interview and a home visit are also part of the review process.
Once selected, an agreement is signed and the family is required to volunteer 500 hours of sweat equity before they move into the home.
We offer many ways to complete the sweat equity hours including helping in the ReStore, assisting in fundraising efforts, labouring on someone else’s home and, of course, working on their own home.
The home is paid for through an interest-free mortgage, with payments based on 30% of the household gross income. The mortgage payments go into a revolving Build Fund that can be leveraged for future home builds. Should a family wish to move, Habitat for Humanity buys the home back and returns a cash lump sum to the family which represents their monthly payments to date minus expenses for administration. Families do not benefit from market inflation but rather have their payments returned to them as a hand-up for a down payment into the traditional mortgage market.
Families are required to attend workshops to help them learn about the responsibilities of homeownership and financial literacy. They cover topics such as setting goals, budgeting, use of credit, problem solving and being part of a strata. The workshops are designed to prepare the family for the financial, property and community responsibilities that come with owning a home.