By Aaron Castleton
With the high cost of buying a home in Utah County, it is extremely difficult to break the cycle of rental housing. The Rural Housing Development Corporation has a solution.
The RHDC has instituted the Mutual Self-Help Housing Program, a program that helps future homeowners join with other families who are likewise building their own homes.
Housing Specialist Secilia Payton said the program organizes eight to 12 families to build their homes together at the same time and its benefits to future homeowners.
“Each family must commit to working at least 30 hours per week on the homes that are under construction,” Payton said.
The joint effort by the families involved allows the primary loan, also provided by the RHDC, to be considerably lower. The United States Department of Agriculture Rural Development provides and guarantees the loans and does not require mortgage insurance.
Interest rates are based on income and can range from 1 percent to 6 percent, allowing the homeowner to make lower monthly loan payments.
The labor that participants contribute, called sweat equity, is considered the down payment. Working 30 hours per week on the homes excludes the families from coming up with the customary 3 percent down payment.
According to the Utah County Association of Realtors, the average price of a home in Utah County was $185,258 as of August 2003.
The Mutual Self-Help Housing Program can drastically reduce the cost of a new home by 25 percent. For example, a $145,000 home could be purchased for close to $110,000 with the Mutual Self-Help Program.
“You get so much equity right off the bat,” Payton said. “It”s a wonderful program.”
The participating families and their friends do 65 percent of the work. The remaining 35 percent of construction is left to a trained construction supervisor who oversees the project from start to finish.
No previous construction experience is required to qualify for this program. The trained construction supervisor will instruct families on the building methods, tool usage and any other construction training.
According to the RHDC brochure, income guidelines are the only qualifying item. For example, a family of three would have to make less than $40,400 annually to qualify for the program.
Mistie Juber and her family moved into their home last weekend after using the Mutual Self-Help Program.
“You put in the work, and it lowers your payment drastically,” Juber said. “We were able to build equity by doing the framing, painting and roofing. It was great.”
The RHDC can be contacted at 375-2205.