Frequently Asked Questions
These are some of the frequently asked questions about our Home Purchasing Program and Fleming Court Homes. 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 in Colfax is the first project
Community Action Center
has facilitated that includes a sweat equity opportunity for the
homebuyer. Community Action Center will do the following:
- Develop home plans, cost estimates for home construction, and construction schedule.
- Recruit families interested in sharing labor to help as each home is built.
- Provide homebuyer counseling and assistance in preparing loan applications.
- 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:
- Stable income from employment or other sources.
- Ability and willingness to meet labor requirements.
- Income not exceeding eligibility guidelines.
- A credit history that demonstrates a willingness to repay debts.
- You do not own a home at this time.
Q: What type of homes will be available?
A: The four homes in the Fleming Court project include 3 bedrooms, 2
bathrooms, and an attached 2 car garage on a single floor. There are
two basic floor plans with 1,400 to 1,500 square feet of finished
space. 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 Fleming Court 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.
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 by phone or in person. 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 Fleming Court, you can call our
office to request an 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. Failure to
provide information may result in another applicant being approved
to purchase the home. The applicant must also attend a homebuyers
class.
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 student loan, 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 may be
included in the loan amount.
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: 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: Families will receive a wide variety of training starting with
homebuyers education classes that introduce you to the benefits and
responsibilities of homeownership. Safety training prepares you to
work on the job site with construction tools. 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 Home Purchasing Program?
A: Yes. However, there is no reduction in the labor commitment for
these families. "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, framing the garage walls,
installing a pre-hung door in the garage, installing insulation in
the garage, installing drywall in the garage, completing interior
painting, completing exterior painting, installing interior
baseboards 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 Fleming Court 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: Do all the houses need to be
completed before any of the families can move in?
A: Yes. This project involves sharing labor to complete the
construction of these homes. All of the homebuyers are expected to
work on all of the homes, and every house will be completed within a
few days or couple of weeks of each other.
Q: What is the total length of the
process?
A: Once your home purchase loan is approved 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 502
or equivalent conventional first mortgage for 80% of the home
purchase price, and a deferred second mortgage from Community Action
Center for the remaining purchase price. The USDA 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.
