Program lets families save money by building own home
Families must work 35 hours a week building 1,500-square-foot home, qualify for 1 percent interest rate
Family Resources of New Orleans has started a program called the Rural Development Mutual Self-Help Housing Program. This program, which began in June of 2007, gives eligible families the opportunity to work together, usually in groups of four, to build their own homes. To be eligible for the program, the families must have a credit score of at least 640 and can have an income level as low as $11,000. In most cases, the home must be the family’s first, though the United States Department of Agriculture, which helps sponsor the program, will make exceptions if the family lost their home during Hurricane Katrina.
The families must work at least 35 hours a week during the building process, with groups of four families working on each others homes. No one can move into a home until all four famililies’ homes are completed.
And these aren't small homes either.
They all have three bedrooms, two bathrooms and are around 1,500 square-feet. The homes share a similar floor plan, but all have unique exteriors. The market value for the homes is close to $150,000, though it will only costs the families $118,000. Of that total, $90,000 to $95,000 is construction costs and the rest of the total comes from the lot price.
"There is only one other program in Louisiana that helps people like this," Paula Pete, executive director of Family Resources of New Orleans, said. "There is a huge shortage of housing in St. Charles Parish and we don't want families to have to leave the area to find a home.
"Some of them have worked at the plants for over 20 years and they want to stay in the area."
Besides helping a family construct their home, Family Resources of New Orleans also helps the families get a low interest rate. The construction costs and lots are financed through the USDA and families can get a subsidized loan that has a 1 percent interest rate for 30 to 33 years. Pete says that most families will end up paying only $400 to $500 a month.
"We started the program in Killona because that area has been neglected in new home construction," Pete said. "90 percent of the people there live in mobile homes, and if another hurricane were to come, all those people would be in jeopardy. They invited us into the community and we are trying to help them as best we can."
Family Resources has already purchased 3.78 acres of land in Killona and wants to build 24 homes there. However, the homes can be in any neighborhood as long as the person owns their own land. If they are looking for land, it has to be affordable so that they can qualify for the USDA loan.
Family Resources also makes sure that the families are working with a licensed contractor, and as a result, Pete says the homes are beautiful when completed.
Right now, two homes have already been built in Killona and another home is going up in Boutte Estates.
"We've had 500 people apply for the program over the last two years," Pete said. "We work with those people to meet the requirements so that we can help these families get wealth by owning their first home."
To help the families meet the requirements, Family Resources offers credit counseling and credit repair.
For more information on the program, contact Family Resources at 985-785-0570 or visit the website at www.familyresourcesofno.org.
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