In an effort to help more working families become homeowners, the Department of Housing and Urban Development (HUD) recently awarded $10 million in grants to four non-profit housing organizations, which will create at least 538 affordable homes for low-income families and individuals, HUD announced in a press release.
Funded through HUD’s Self-Help Homeownership Opportunity Program (SHOP), these grants, along with the labor contributions from homebuyers and volunteers, significantly will lower the cost of construction, thus making homeownership a reality for families who otherwise would not be able to afford to buy a home.
The SHOP program provides federal grants on a competitive basis to national and regional non-profit organizations and consortia that have experience in administering self-help homeownership housing programs. The SHOP grants must be used to purchase land and make necessary infrastructure improvements, which together may not exceed an average SHOP investment of $15,000 per dwelling unit. Leveraged funds must be used for the construction or rehabilitation of these homeownership units, HUD said.
“These non-profits receiving grants are making a positive impact in communities across the country through the strong partnerships they have formed between the public and private sector,” HUD Principal Deputy Assistant Secretary for Community Planning and Development David C. Woll, Jr., said in the release. “These grants, in conjunction with volunteer work and private donations, will help make the dream of homeownership a reality for more families.”
The following organizations will receive SHOP funds, and were awarded two Opportunity Zone preference points each during the FY2019 SHOP Competition:
- Habitat for Humanity International ($5,421,011 awarded)
- Housing Assistance Council ($1,307,014 awarded)
- Community Frameworks ($1,121,868 awarded)
- Tierra Del Sol Housing Corporation ($2,150,107 awarded)
“Homebuyers will contribute significant sweat equity toward the development of their units and/or the units of other homebuyers participating in the local self-help housing programs. These sweat equity contributions reduce the purchase price of the SHOP units and make these units affordable for low-income homebuyers. A minimum of 100 sweat equity hours is required from a household of two or more persons,” the release stated. “A minimum of 50 sweat equity hours is required from a household of one person. Community participation consisting of volunteer labor contributions is also required. Sweat equity and volunteer labor may include, but are not limited to, landscaping, foundation work, painting, carpentry, trim work, drywall, roofing and siding for the housing. Reasonable accommodations must be made for persons with disabilities.
“Grantees may carry out activities directly and/or distribute SHOP funds to local non-profit affiliates that will develop the SHOP units, select homebuyers, coordinate the homebuyer sweat equity and volunteer efforts, and assist in the arrangement of interim and permanent financing for the homebuyers. The grantees ensure that the new homebuyers can afford their homes at the time of purchase and for the long term. Many of the SHOP homebuyers are first-time homeowners and come from underserved groups,” HUD added.