Self Help Housing talk draws full house
Representatives from RurAL Cap visited Nome Tuesday, January 16 and gave a talk on the U.S. Department of Agriculture’s Mutual Self-Help Housing Program. A crowd of around 85 packed into the Nome Eskimo Community’s Trigg Hall to hear how qualifying families can build their own home with the USDA’s Rural Development direct mortgage loan program. With this program qualifiers contribute home building labor under the guidance of a construction supervisor and that labor becomes their “sweat equity” down payment.
“In a nutshell, the Mutual Self Help Housing Program is a product of the USDA where they provide a grant to RurAL Cap to assemble a group of people who are interested in working as a group with mortgage loans from USDA to build their own homes,” said Mitzi Barker, acting CEO of RurAL Cap. “They build together as a group, the homes are usually co-located. It’s not on a lot you currently own. The group works together and nobody moves in until all the homes are done.”
The houses are built in groups of at least eight and as many as 15 with all the homeowners working at least 35 hours a week on the construction.
“We purchase the lots in a very close proximity and make sure they are ready for construction,” said Mi’shell French, Homeownership Program Supervisor for RurAL Cap. “Then I qualify the families individually for the mortgage loans that each family would need to purchase a lot from us as well as the building materials as well as contractor labor that would be needed to construct those homes. The family groups of eight to 12 work together constructing the houses. That’s where the mutuality aspect of it comes in. Each family is required to contribute 35 hours of labor each week. Construction supervisors are there always.”
“Are you going to bring in outside contractors or are you going to hire locals?” asked one man.
“We look to hire locals,” answered French. “What we generally hire out is foundation, electrical and plumbing systems, sheet rocking, the roofing and any dirt work as well.”
Everybody in the group works on everybody else’s house. The construction of each house proceeds at the same pace and nobody moves in until the final house is ready.
“So you’re saying that if they were built that families wouldn’t be able to move in until all the houses are done?” asked a man. “So if only two houses get done they just sit all winter empty until the rest get done the following summer.”
“The goal is to get them all built at the same time,” said French. A program on the Kenai run by RurAL Cap builds the houses in 12 months. Because of Nome’s weather and transportation issues they are trying to get that down to six months.
“It might mean doing something as a kit, or using panels, or contracting more stuff out,” said Mitzi Barker. “So we’re working with those officials to see what we can do to condense that construction period. The down side is that the sweat equity of the families will be commensurately smaller. I’d like to get it down to a summer of construction, do the finish work inside and then in by Christmas.”
RurAL Cap, which Barker describes as “a multi-headed beast,” does Head Start in 27 communities around the state, rental and supported housing in Anchorage, weatherization in Juneau and Western and Northwestern Alaska, and they are running the Mutual Self-Help Housing program in Soldotna.
Five years ago Barker had a conversation with an employee of the Nome Eskimo Community, who asked “Can you do anything to help us build housing?” At that time the community had a number of families qualified for USDA mortgages but there were no houses for sale. RurAL Cap does weatherization in Nome and thus has experience with the Nome construction environment, which includes the barge schedule and the short construction season.
Nome Mayor Richard Beneville asked how many houses the program has built off the road system. The answer was “None.” But with Rural Cap’s experience off the road system with weatherization and other projects they are not naïve about the issues of construction in bush Alaska.
“There’s a two-phase application process,” said French. The pre-application determines whether a family can qualify for the loan or whether they might need counseling on their credit problems.
“The mortgage loan product is both a construction loan and a permanent financing,” said French. There are no payments and no interest during the construction period.
“Does the home have to be in the city limits?” asked a man.
“No,” was the answer.
“Are the designs already done and are there several to select from? Or can you build anything you want?” asked one of the interested citizens. “We are looking to see what best suits the area, what’s needed here and what families would like to see,” replied M’shell French. “Generally we do have a couple of plans that families would be able to choose from based on income eligibility.”
The designs of the houses are supplied by RurAL Cap and may not be altered. There will be several designs to choose from. As some of the funding comes from Alaska Housing they build to a five-star energy standard and the designs for the Nome houses are still in the works. RurAL Cap is working with community members as well as Cold Climate Housing Research Center to develop house plans for the Nome area.
“Can I ask a hypothetical question?” asked a man. “Say your wife has good credit and the other member of the household has poor credit. Would one person be on the deed?”
“We can do that,” answered French. “If the co-applicant doesn’t have great credit we can apply in just one person’s name.”
Detailed information about the Mutual Self-Help Housing Program can be found at www.RuraLCAP.com.