SAN LUIS, Ariz. — Despite soaring housing prices, more than six dozen local low-income families will soon fulfill their home ownership dreams thanks to the help of Rural Community Assistance Corporation (RCAC) and a partnership between several Arizona self-help housing agencies.
In July, the Federal Home Loan Bank (FHLB) Board awarded a $1 million grant to the Arizona Self-Help Network. Comite de Bien Estar, Inc. of San Luis agreed to serve as lead sponsor for the six-member partnership. The money will provide partial down payment assistance to 80 low- and very-low income families to purchase self-help homes.
In a Mutual Self-Help Housing Program, a group of eight to 12 low- and very-low income families and individuals work together under the guidance of a construction supervisor hired by a nonprofit housing developer such as Comite de Bien Estar, Inc. In lieu of a down payment, those in the program provide labor as “sweat equity.”
Homes in any given group of families are built simultaneously, and future owners provide at least 65 percent of all labor. No family moves into their new home until all in the group are completed.
Mutual Self-Help homeowners have mortgages that are generally far less than those of standard new or resale homes and the program – which has built nearly 25,000 homes since 1971 — boasts a delinquency rate of a mere 3 to 4 percent.
The concept of the six-partner collaborative was formed with the assistance of RCAC Rural Development Housing Specialists, Joe Waters and John Michael.
“RCAC raised the possibility of group cooperation at a self-help network meeting about four years ago. We saw there was a need for cooperation between various agencies and the self-help grantees agreed. With the leadership of Comite, collectively they decided to work to form a partnership,” explained John Michael, RCAC self-help technical assistance provider.
The Arizona Self-Help Network also includes Housing America, Somerton; Chicanos Por La Causa, Tucson; Community Action Human Resources Agency, Eloy; PMHDC, Tucson; and Chicanos Por la Causa, Nogales.
“The real success of the program is the willingness of the other agencies to share their information and subsidies so that we all can help the low-income families in our areas start the difficult task of homeownership without being overburdened with a high mortgage payment,” said John McGrady, Development Officer, Comite de Bien Estar.
The FHLB loan will give $10,000 each to 80 families from Yuma, Pima, Pinal, Cochise and Santa Cruz counties to apply to their U.S. Department of Agriculture (USDA) Section 502 subsidized loans. The money will directly reduce their self-help home mortgages and, in some cases, lower monthly payments. After five years of continuous home ownership, the $10,000 loan will be forgiven.
“Thanks to the efforts of Comite de Bien Estar, USDA Rural Development encourages other sources of funds to leverage our 502 loan program to very-low and low-income families,” said Cecilio Torres, Rural Development Manager, Avondale, Arizona. “The leverage program, not only allows Rural Development to assist more families, but allows us to reach those very-low income families whom otherwise would not qualify for our 502 Self-Help Program.”
“Comite de Bien Estar has a terrific track record in housing assistance,” said Eddie Browning, State Director for USDA Rural Development in Arizona. “They are a top producing self-help grantee in Arizona and have already helped hundreds of families realize the dream of home ownership.”
RCAC has been the western regional technical assistance provider for more than two decades. The western self-help region produces approximately 60 percent of self-help houses nationally. RCAC currently assists 64 operating grantees in the self-help program and maintains five field offices in Arizona.