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Homeowner Need

Our potential home buyers have a need for better housing. You may have:

  • Current housing that is not affordable (greater than 35% of monthly income)
  • Housing is too small for your needs
  • Sharing your housing with another family
  • Current housing unsafe/ needs repairs

Additionally, Habitat home buyers must be properly matched to the size and type of unit. Households, based on size, must be able to occupy a minimum of 50% of bedrooms within a unit. For example:

  • A family of 5 would not be able to occupy a 2 bedroom home.
  • A family of 1 would not be able occupy a 4 bedroom home.

How much does a Habitat Home cost to buy?

At HFHSWC we don’t set sales prices on our affordable homes. If you are selected to partner with Habitat to build a home, your mortgage will be calculated based on your personal income. Here is an example:

Suzie J makes $40,000 a year. 30% of Suzie’s annual income equals $12,000. This amount less taxes, insurance (and HOA dues if applicable) would be the amount Suzie pays towards her mortgage each year.

30% of Suzie’s annual income:          $12,000

Annual Property Tax:                          $1,500

Homeowner’s Insurance                     $600

Annual HOA dues                                 $500

Total available towards mortgage        $9,400


We multiply the available funds by 30 years (the standard length of a traditional mortgage):

9,400 x 30 = $282,000 would be the 1st mortgage on Suzie’s home.

Let’s assume that Suzie’s Habitat home appraised for $350,000. Habitat secures the remainder of the equity with a ‘silent’ 2nd mortgage to subsidize the value of the home. Once a Habitat homeowner has lived their home for 10 years, the 2nd mortgage starts being forgiven, 1/20th of the amount each year for 20 years. This forgiveness becomes owner equity.

Appraisal:                        $350,000

Suzie’s Mortgage             $282,000

Silent 2nd:                        $  68,000 ($3,400 forgiven each year beginning in the 11th year of homeownership)


So what does Suzie pay each month?

We divide Suzie’s 30% into twelve monthly payments of $1,000. This amount includes taxes, insurance (and HOA dues if applicable). That is what we determine Suzie can reasonably afford, to ensure homeownership stability.

Using the examples from before this is how Suzie’s payment breaks down:


Taxes:                   $125

Insurance:             $ 50

HOA dues             $42

Mortgage               $783                       This amount becomes owner equity each month.

Total:                     $1,000*


*The amount may change slightly annually if homeowner’s insurance or property tax rates change.


You may be asking “What about mortgage interest”. Although a Habitat home appears to be similar to a traditional mortgage, there is one BIG difference. Habitat homeowners receive a zero interest or zero interest equivalent mortgage through our program. That means that the entire mortgage payment becomes instant equity.

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