FAQ
faq

Frequently Asked Questions

These are some of the frequently asked questions about our Self-Help Housing Program. We ask that you read over these in order to familiarize yourself with the program. If these frequently asked questions do not cover your question(s) please feel free to contact us by phone or email. Please click here for our contact information.

Q: What does Community Action Center do in developing homes?
A: The Fleming Court project was the first project Community Action Center facilitated that includes a sweat equity opportunity for the homebuyer. Community Action Center will do the following:

  1. Develop home plans, cost estimates for home construction, and construction schedule.
  2. Recruit families interested in providing labor to help as each home is built.
  3. Provide homebuyer assistance in preparing loan applications.
  4. Supervise and train families in the skills needed to complete the sweat equity work.

Q: Who can qualify for purchasing a home providing sweat equity for their down payment?
A: The general qualifications are:

  1. Stable income from employment or other sources.
  2. Ability and willingness to meet labor requirements.
  3. Income not exceeding eligibility guidelines.
  4. A credit history that demonstrates a willingness to repay debts.
  5. You do not own a home at this time.

Q: What type of homes will be available?
A: The four homes in the Palouse View project include 3 bedrooms, 2 bathrooms, and an attached 2 car garage (an optional 4th bedroom is available). There are two basic floor plans, a 2 story home and also a 1 story home.  Each house will have different appearances and families can personalize their home with paint colors, floor coverings, and landscaping. 

Q: How can I find out if I am eligible to buy one of the Self-Help Homes?
A: You can submit a pre-application for review by our loan officer or contact our loan officer to review eligibility requirements on an individual basis by phone or in person.

Q: Can I participate if I have already owned my own home?
A: This program is for families who do not own a home at this time and generally is for families that have not owned a home in the past 3 years.  A mobile home on a rented lot does not count as owning a home.

Q: Are families with a disabled or handicapped member eligible?
A: Yes. Reasonable accommodations are made in the labor requirement for any participant family. There are also plan modifications available when there are special needs in a household.

Q: Will I know right away if I qualify for a loan?
A: Community Action Center can pre-qualify the applicant with unverified information provided by the applicant. However, a final eligibility determination will not be made until a written application is submitted, household income is verified, and a mortgage credit report is obtained.

Q: How do I apply?
A: To apply to become a homeowner in Self-Help Program, you can call our office to request a pre-application packet be sent out, pick one up at the our office, or print an application out from our website and send it in. If you need assistance filling out the application, we will be glad to answer your questions and help you over the phone or in person by appointment.

Once you have filled out your application and provided us with the supporting documentation (such as paycheck stubs, bank statements, tax returns, etc.) we will consider the application complete. We will then order your credit report and proceed with the qualification process.

Q: What is the applicant's responsibilities in the application process?
A: Community Action Center staff are available to assist the applicant from application to loan closing. The applicant is responsible for providing requested information in a timely manner to Community Action Center and the lender. Failure to provide information may result in another applicant being approved to purchase the home.

Q: Will you find out about my credit history?
A: Yes. Your credit bureau report provides information on your payment history including any difficulty you have had repaying other loans or credit cards. That information will be used to see if you can easily repay the loan. All information will be kept confidential.

Q: What type of credit history is required?
A: While we do not require our participants to have perfect credit, we like to see a clean twelve-month history. This means that all of your open accounts must be current with no late payments on record. We require a certain amount of time to have passed from the discharge date if you have had a bankruptcy in the past. The amount of time required depends on the type of bankruptcy and the circumstances. Any charge-offs, judgments or collection accounts over $250 must be paid or settled prior to participation in the program.

If you have not established traditional forms of credit such as a credit card or auto loan, we may be able to build a non-traditional credit history by obtaining statements and letters of credit from your insurance carrier, utility companies, daycare provider and so on.

Q: Does it matter how many other bills I have to pay?
A: Community Action Center staff will look at how much you currently owe to others. We will want to know if paying back the proposed loan on top of your other payments will be difficult for you.

Q: Can I get a loan if I am unemployed?
A: A steady source of income is required to obtain a home loan. An applicant must show sufficient resources to repay the housing loan.

Q: What employment history is required?
A: You need to have a stable employment history. Two plus years with a present employer is a good indicator of stability, but other indicators of potential future stability include recent new employment received after completing advanced training or you recently started a new better job in the same field where you were employed.

Q: How do you verify my income?
A: We must be able to verify your income directly with your employer either by mail or by phone. We also must be able to document your income and earnings from paycheck stubs or printouts from an accountant who handles the record keeping for your employer. In some cases your tax returns will be the best methods to verify income.

Q: What if I think my income is too low?
A: The home purchase loan will have a low interest rate, is adjusted by income, and is combined with a long repayment term. The loan repayment is based on the homebuyer repaying a percentage of their income toward the housing payment, taxes, and insurance. Generally, payment of these direct housing costs are set at 30% to 33% of the homebuyers household income.

Q: How can I determine if my income is adequate to repay a home purchase loan?
A: The total amount of the proposed monthly house payment, real estate taxes, insurance, and other credit debts cannot exceed 41% of your gross monthly income.

Q: Does this mean that I will not need any cash to purchase a home?
A: Generally, the applicant will need a limited amount of cash. The applicant pays a small application fee and a credit report fee. As a homebuyer you will need to buy some tools and put some money into a reserve account for taxes and insurance. Loan closing costs are estimated to be approximately $2,000.

Q: How much will I need for a down payment?
A: A down payment is not required. Loans may be made from up to 100% of the market (appraised) value. Your sweat equity work is your investment in your home.

Q: What if I have never worked in construction and do not have any construction skills or knowledge?
A: Currently the self-help tasks are to paint the interior and exterior of the home, do the landscaping, and provide construction clean up.  To participate in our program, we do not require or expect you to have construction experience. We will provide the training necessary for you to safely perform the work that is required and we will supervise on-site any time you or your neighbors are working on your homes.

Q: What kind of training do we receive to be ready to build our home?
A: Depending upon the assigned tasks and if necessary, safety training will be provided. Finally, our site supervisor will train you on each construction task that you will be required to perform as part of your sweat equity commitment.

Q: What do I get by working on my house?
A: You are able to become a homeowner without paying a cash down  payment by working on your home. You also gain knowledge of the construction process that takes place.

Q: Can single parent households participate in the Self-Help Program?
A: Yes. The minimum required hours is 50 per adult household member. "Family" hours include the labor of all owners, any child 16 years of age or older and approved helpers.

Q: Can I just work on my own house?
A: No. Families enter into a contract with each other to share the labor. This labor sharing agreement is a fundamental principle of the program.

Q: How many hours of labor does each family contribute to the construction of all the houses in the group?
A: Each family contributes as much labor (sweat equity) as is required to complete all the houses in the group. The estimated sweat equity time is a minimum of 250 hours provided over a 6 month construction period.

Q: What type of work will the homebuyers be completing?
A: The sweat equity work will include work such as completing weekly cleanup of the job site and house, completing interior painting, completing exterior painting, and completing the landscaping.

Q: When do we have to do the sweat equity work?
A: Since many homebuyers will be working during the day, work in the houses will be scheduled to be completed in the evenings and on weekends based on a schedule that works for the four homebuyers.

Q: How many families must there be in this project?
A: The Palouse View project is limited to four families. Future projects of similarity may have different size groups.

Q: How long will it be before I can move into my new home?
A: Typically, a family can move in within 30 days after completion of all the homes in the building group.

Q: When does construction start?
A: Construction is scheduled after the loan is closed with USDA.  

Q: What is the total length of the process?
A: Once your home purchase loan is closed and construction starts, we expect the house to be completed in six months or less.

Q: What are the terms of the loan?
A: There will be a USDA Section 502 or equivalent conventional first mortgage for 85% of the home purchase price, and a deferred second mortgage from Community Action Center for the remaining purchase price. The USDA Section 502 loan has a low interest rate based on the homebuyer's income, and a 33 year repayment period. The second mortgage from Community Action Center is a no interest loan with repayment deferred until the property is sold.

Q: What is included in the monthly house payment?
A: House payments include principle and interest on your first mortgage loan as well as an amount collected and held in escrow to pay your homeowners insurance and property taxes. All elements of your monthly payments including any fees are considered when we calculate the amount of your payment.

Q: Can I sell my home after I build it?
A: Yes. However, you will repay the money you borrowed.