Today we are debunking a second myth that Habitat hears all the time: We are land-lords.
Fact: Again, this is simply NOT TRUE. As mentioned in the previous post, Habitat homeowners partner with Habitat to purchase their home. Not only do they have to complete 350 hours of service and homeowner education, called sweat equity hours, they also have to pay $2,100 in closing costs. Once those requirements are completed, they sign the papers and they get the keys to their first home! *
The family enters into a 0% interest mortgage usually a 20-30 year period for the cost of the home. The payments are usually much cheaper than the average rent in the area ; which is $711 for a three bedroom. Except for being 0% interest, the mortgages are just like the ones you and I have; payments are due every month and there are consequences for missed payments.
Habitat does give a one-year builders warranty, so if something goes wrong in that first year (with appliances, water heater, and etc) Habitat will work to replace or fix it. However, after that first year, if something breaks or something needs some maintenance– Habitat does not do this. It is up the homeowner to fix it, or hire someone to fix it. They are regular homeowners, and have all the benefits and responsibilities that it entails.
So there you go! Another Habitat myth BUSTED!
Next week we’ll cover the myth that we only serve African American single moms.
*Some of you are wondering if Habitat homeowner can turn around and sell their home to make a profit. We make sure this does not happen by placing a second, forgivable mortgage on the property. For examples, the sales price (appraised value) of a home may be $100,000 with the cost to the homeowner being $75,000. A second mortgage in the amount of $25,000 is placed on the property. For each payment made on the first mortgage, a payment is forgiven on the second mortgage. If the home is sold, the remaining balance on both mortgages becomes due. This prevents the homeowner from making a quick profit on the house and discourages the use of predatory lending services.