1

Self-HelpSelf-HelpHousing 101 Housing 101

for Rural Developmentfor Rural Development

Self-HelpSelf-HelpHousing 101 Housing 101

for Rural Developmentfor Rural Development

Created by NCALL Research

Updated September 2007

Orientation 2

Who Is NCALL?Who Is NCALL?Who Is NCALL?Who Is NCALL?Began in 1955 as a legislative

advocate

In 1976 started our housing TA on the Delmarva Peninsula

Orientation 3

NCALL’s ProgramsNCALL’s ProgramsNCALL’s ProgramsNCALL’s Programs Self-Help Housing TA Housing Development TA Housing Counseling Rural Development Mortgage Packaging Financial Literacy

– Finanzas– IDA– Growing Your Money

NCALL Loan Fund Delaware Rural Housing Consortium

Orientation 4

NCALL’s Role in the NCALL’s Role in the Self-Help ProgramSelf-Help ProgramNCALL’s Role in the NCALL’s Role in the Self-Help ProgramSelf-Help Program

1983 - began a regional self-help contract through USDA Rural Development

NCALL provides assistance to potential and existing self-help housing grantees in 21 states

Orientation 5

Self-Help TA Services Self-Help TA Services NCALL ProvidesNCALL ProvidesSelf-Help TA Services Self-Help TA Services NCALL ProvidesNCALL Provides Application Training Program Planning Construction Scheduling Grants Management Staff Training Workshops Networking Opportunities Various Other Services

Orientation 6

NCALL’s Self-Help NCALL’s Self-Help RegionRegionNCALL’s Self-Help NCALL’s Self-Help RegionRegion

Orientation 7

NCALL ’s Self-Help NCALL ’s Self-Help Housing TeamHousing TeamNCALL ’s Self-Help NCALL ’s Self-Help Housing TeamHousing Team

Sherry DeZwarte – Housing Coordinator

Ulla Moore – Housing Specialist Lisa Spellman – Housing Specialist Mark Lasocha – Housing Specialist Don Pierce – Contracted Housing Specialist Jill Lordan – Contracted Housing Specialist Valerie Thompson – Program Analyst

Orientation 8

What is Mutual Self-What is Mutual Self-Help Housing?Help Housing?What is Mutual Self-What is Mutual Self-Help Housing?Help Housing?

A method for achieving homeownership

Families working together

Affordable homeownership loans

A private non-profit or local government sponsor

Similar to the church and barn raising of the Amish and Mennonites

Rural Development began funding mortgages through their 502 program in the 1960’s

In 1971 Rural Development began the 523 Grant Program

41,098 homes have been successfully built through this method and financed by 502 loan program (through FY’06)

Currently 125 grantees nationwide

At one time, all 50 states have participated in the Mutual Self-Help Program

Orientation 11

Merits of Self-Help Merits of Self-Help HousingHousingMerits of Self-Help Merits of Self-Help HousingHousing

Affordable, comfortable and attractive homes

Uses the best most affordable financing around

Reduced mortgage – saving an average of $29,455 in FY’06

Improved opportunity for value appreciation and equity growth

Participants learn valuable skills

Builds strong neighborhoods and communities

Orientation 13

Three Necessary Three Necessary ElementsElements Three Necessary Three Necessary ElementsElements The participants supply the needed

labor

Rural Development provides the 502 and 523 funds

Housing corporations organize and assist the families

Orientation 14

Grantee Grantee ResponsibilitiesResponsibilitiesGrantee Grantee ResponsibilitiesResponsibilities

Recruiting participantsConducting pre-construction

meetingsLocating suitable building sitesSelecting house plansPreparing cost estimates

Assisting participants in applying for a 502 loan

Subcontracting work on the participants’ behalf

Supervising and training participants in the construction of a group of homes

Supervising the participants’ 502 loan funds

Orientation 16

How the Homes How the Homes are Builtare BuiltHow the Homes How the Homes are Builtare BuiltFamilies work together in groups

of 4-10

Houses start and finish construction together

No one moves in until all of the homes are finished and approved

Work is done by the participants in the evenings, on weekends and days off

Families not willing to give up free time should not join a self-help housing group

Orientation 18

How long will it How long will it take to build the take to build the homes?homes?

How long will it How long will it take to build the take to build the homes?homes?The total process takes 12

to 16 months–3 to 4 months in pre-construction–8 to 12 months in construction

Orientation 19

Pre-Construction Pre-Construction Period Includes:Period Includes:Pre-Construction Pre-Construction Period Includes:Period Includes:Choosing house plansSelecting building sitesCompleting Rural

Development paperwork Awaiting loan approvalParticipating in Pre-

Construction Meetings

Orientation 20

Construction Construction PeriodPeriodConstruction Construction PeriodPeriod

Typical construction time: 1.5 months per house

6 houses = 9 months of construction time

Orientation 21

Family Labor Family Labor ContributionContributionFamily Labor Family Labor ContributionContributionFamilies contribute as much labor

as is required to complete ALL of the houses in the group

Generally each family contributes 30 to 35 hours each week

Family hours include the labor of either spouse and any child over 16 years of age

Orientation 22

Orientation 23

Family TasksFamily TasksFamily TasksFamily TasksFamilies must complete a

minimum of 65% of the construction labor tasks

Technical work such as foundation, plumbing, heating and electrical is subcontracted out

Families generally will do such tasks as:– framing– setting of trusses– roofing– insulation– sheathing– siding– windows & doors– drywall– painting– interior trim & cabinets – landscaping

The agency provides a construction supervisor on site to train and guide the participants

Orientation 26

Application StepsApplication StepsApplication StepsApplication Steps Pre-Application

– Proof of interested families

– Available, affordable land

– Organizational feasibility

Final Application

–Families 502 eligible

–Land secured

–Staff available

–House plans, specs & estimates complete

–Organizational readiness

Operating Grant

–Production of houses proposed within budget and time allotted

Orientation 28

Rural Development Rural Development Section 523 Pre-Section 523 Pre-Development GrantDevelopment Grant

Rural Development Rural Development Section 523 Pre-Section 523 Pre-Development GrantDevelopment Grant

Purpose:

Provide an organization with financial assistance to prepare and complete the final application.

Terms:

Six months

Maximum of $10,000

Available only once for a defined area

Cannot be used for land options or building materials

Authorized Uses:

Staff salary, fringes and other office expenses directly related to work on the final application requirements

Obtain house plans, copying etc.

Advertising for eligible applicants

Orientation 31

Self-Help Technical Self-Help Technical Assistance GrantAssistance GrantSelf-Help Technical Self-Help Technical Assistance GrantAssistance Grant

Purpose:To pay administrative costs

associated with operating a self-help program

Terms:

Rural Development National Office reviews all grants

Grants may not exceed two years

Regional T&MA Contractors and Rural Development Area and State Offices must analyze

Orientation 33

Public BodiesRural TownsPrivate Non-Profit

Corporations

Who May Qualify Who May Qualify For A 523 GrantFor A 523 Grant

Orientation 34

Sample Self-Help Sample Self-Help HomesHomesSample Self-Help Sample Self-Help HomesHomes

A completed home in southern Maryland, sponsored by Southern Maryland Tri-County Community Action Commission.

Orientation 38

Orientation 39

Orientation 40

Orientation 41

USDA’s SupportUSDA’s SupportUSDA’s SupportUSDA’s Support

During National Homeownership Month in 2002, President Bush celebrated with a new Maryland self-help family.

Orientation 42

Orientation 43

Insert State SlideInsert State Slide Grantees GranteesInsert State SlideInsert State Slide Grantees GranteesCurrently NCALL is not working

with any potential groups in _State

name______ We would love to have a grantee

hereStates without grantees receive

priority funding

Orientation 44

Why _Why _(Insert State name)(Insert State name)______ ______ Should Want a Should Want a GranteeGrantee

Why _Why _(Insert State name)(Insert State name)______ ______ Should Want a Should Want a GranteeGrantee

Brings additional 502 funds into ______(State

Name)___________ (National Office set aside) The Mutual Self-Help program helps

serve VLI Non-profits assist RD with publicizing

programs and processing loans A conservative estimate of economic

impact is $7 for every $1 of affordable housing investment

Orientation 45

What Types of What Types of Agencies to Look ForAgencies to Look ForWhat Types of What Types of Agencies to Look ForAgencies to Look For

This program is difficult Experienced organizations and staff

– Have produced housing– Understand development and

regulations– Can access or develop land– Good community relations

Multi-funded agencies– Leveraged resources to offset

participant and agency costs

Orientation 46

Current ClimateCurrent ClimateCurrent ClimateCurrent Climate During FY ’07, operating grantees

funded at 60% Potential for 6 to 8 new grantees funded

with maximum grants of $250,000 Potential for 12 Pre-Development

grants Lobbying for increase in 523 and 502

funding

Orientation 47

OutreachOutreachOutreachOutreachPer our current contract, NCALL

outreaches to potentially interested organizations

NCALL will provide any interested groups with an orientation package, and assistance with feasibility

Orientation 48

NCALL Self-Help NCALL Self-Help StatisticsStatisticsNCALL Self-Help NCALL Self-Help StatisticsStatistics

Currently 19 grantees operating with 19 grants

3 predevelopment grantees 16 prospective grantees $29,455 average sweat equity in FY’06 Almost $13 million in 502 funds in FY ‘06 Over $5 million in 523 grants in FY ‘06

THE END