By Missy Wattenbarger
With budget cuts looming, the Crossville Housing Authority feared that its New Beginnings Self-Help Housing Program would not continue for another month without additional funding. The staff is now breathing a sigh of relief after receiving news that it was named the recipient of a $503,200 grant from USDA Rural Development. The grant will help New Beginnings continue its mission and complete 19 new homes.
"In this economic environment when every public dollar is being scrutinized, we were very excited about the funding for our fourth self-help housing grant," said Marley Wyatt, New Beginnings program coordinator. "With these funds, New Beginnings will be able to continue its mission of providing working families the opportunity to realize the American dream of homeownership."
New Beginnings is designed to provide working individuals and families with low incomes with the opportunity to build their own homes. They are allowed to choose from a variety of lots and from a selection of three-bedroom, two-bath floor plans to meet their needs. An essential part of the program centers around the homeowners providing some of their own labor, which cuts down on construction costs and helps build up equity during the construction process.
To be eligible for the program, homeowners must meet income and credit requirements, have stable employment, not currently own a home and be willing to put in at least 500 hours of sweat equity into the home. Prior to construction, homeowners must also attend an eight to 10-hour homebuyer education course.
Since 2005, land in what is known today as the Southview and Eastview subdivisions has been purchased and developed by CHA specifically for the New Beginnings program. The Southview subdivision contains 29 homes, and Eastview will contain 56 homes upon completion.
The homes are financed with a 33-year fixed-rate mortgage. With a subsidized interest rate, rates can be as low as one percent for some borrowers. Large down payments are not required, and all closing costs are included in the loan amount. Payments can potentially be the same amount as current rent prices or even lower, depending on income.
According to Don Alexander, CHA executive director, most of the people taking part in the program are young families making an average of $23,374. Thanks to the program, these families can afford new homes, with an average mortgage payment of $502.76 (including principal, interest, taxes and insurance).
"We have provided, since 2005, 66 new homes, with the average loan of $113,327 with an average appraisal price of $143,270, putting $30,000 equity for every single person that is on this program," he said. "That has put $9.03 million [of property value] on the county tax roll, and total equity of homeownership is almost $2 million."
Jerry Jolley, area director for USDA Rural Development, one of the partner agencies involved with the program, thanked everyone for "making the self-housing program a flagship for everyone else to follow." He mentioned that more than 153,000 families across the nation were able to own homes last year thanks to self-help housing programs like New Beginnings.
"Seeing clients have a home of their own with an affordable mortgage is a great reward of my job," said Wyatt. "New Beginnings is a group effort. The hard work from all who are involved – from the office to the construction site – is what produces the amazing results.
“It is an honor and privilege for me to work with such wonderful people as USDA Rural Development, our clients, our construction crew and our sub-contractors," she concluded.