Almost everyone has heard of Habitat for Humanity. And that’s awesome! But sometimes we discover misconceptions about what we do, how we work, and who buys homes with Habitat. So, we’ve put together this list to help set the facts straight.
Of course, if you have any questions, we’d love to talk with you. Just give us a call.
Fact #1: Households buy homes with Twin Cities Habitat for Humanity
Households partner with Twin Cities Habitat to buy a home they love with a mortgage they can afford. Our mortgage is available to households who may otherwise be unable to obtain conventional mortgage financing. All buyers must meet our income guidelines—falling between 30% and 80% of the Twin Cities median income, depending on family size.
Every family pays an affordable mortgage, originated by our wholly-owned nonprofit mortgage company, TCHFH Lending, Inc. Monthly mortgage payments are set at no more than 30% of homebuyers’ monthly income. The 30% cap ensures that families can afford decent healthcare, nutritious food, transportation, and education.
At the time that Habitat homebuyers buy their home, we limit their closing costs to $3,000, plus the first year of their homeowners insurance policy. On an ongoing basis, homeowners are responsible for their monthly mortgage payment, which includes the principal and interest, property tax, homeowners insurance escrow, and a monthly maintenance fund contribution.
Homebuyers also contribute sweat equity hours by: volunteering on the construction of their home (or another Habitat home), working at one of our ReStore Home Improvement Outlets, taking homeownership training classes, and completing one-on-one financial coaching.
Fact #2: Households can use Habitat’s mortgage to buy homes for sale on the open market or homes developed by Habitat
Households who partner with Twin Cities Habitat have options. After they qualify for our Homeownership Program, they have the option to buy a home built or rehabbed by Twin Cities Habitat, or work with a realtor to find a home they love that’s for sale on the open market.
No matter which path they take, all Habitat homebuyers must meet the same financial criteria, complete our homeownership education, and apply for a mortgage through our wholly-owned mortgage company, TCHFH Lending, Inc.
Fact #3: Affordable housing has no adverse effect on neighborhood property values
Housing studies have shown affordable housing has no adverse effect on neighborhood property values. At Habitat, we’re proud to build quality homes in more than 50 cities across the metro area. Read more below (Fact #4) about how our homes are built to fit into their neighborhoods.
Here’s one of many examples of the positive impact Habitat has had on a neighborhood:
Several Twin Cities Habitat homes were built in the Hawthorne EcoVillage in North Minneapolis during the housing crisis. A five-year report on that neighborhood shows Habitat’s work coincided with significant decreases in foreclosures, vacant properties, and drug arrests. The report also shows a jump in owner-occupied homes and the number of new trees planted.
Fact #4: Twin Cities Habitat builds quality, energy-efficient homes
Twin Cities Habitat develops quality, attractive, simple, modern homes. All homes built or rehabbed by Habitat meet or surpass every building code in the communities where we build. On top of that, we aim to match the size and quality of surrounding homes.
All homes must pass stringent inspections by city or county inspectors. While most work on the homes is done by volunteers, all volunteers are trained and supervised by Habitat staff. In addition, plumbing, electrical, roofing, and other skilled work is done by licensed professionals.
Twin Cities Habitat for Humanity is the #1 builder of ENERGY STAR homes in Minnesota. Our homes are 45–50% more energy-efficient than the standard new home. We use all ENERGY STAR appliances, 95% efficient furnaces, and extra insulation.
We ensure our homes are healthy and safe, installing active radon mitigation and continuous vent systems, and using low VOC paints. All homes are built to basic LEED standards, and some are also built to meet LEED Silver, Gold, and even Platinum standards.
The results are homes that meet or exceed all area building codes, are more cost-efficient for homeowners, and are better for our planet.
Fact #5: People of all backgrounds, races, religions, etc. can partner with Habitat
Twin Cities Habitat for Humanity is an Equal Opportunity Lender and a Fair Housing organization. We follow all Equal Opportunity Lending and Fair Housing laws, and we do not discriminate based on race, religion, nation of origin, gender, sexual orientation, family status, marital status or any other protected classes.
Our staff is prepared to work with households at various levels of preparedness for homeownership and we encourage any low-income household with the dream of ownership to apply. See our eligibility criteria to find out if buying with Habitat might be right for you.
Twin Cities Habitat does outreach to many communities throughout the region to raise awareness of our program and encourage potential homebuyers to apply. Our referral partner network also helps us connect with communities where we may lack relationships.
Fact #6: Habitat homeowners use less government assistance after buying their homes, saving Minnesota taxpayers millions
A recent study showed that only 3% of Habitat homebuyers receive government assistance since buying their homes with Habitat, compared to 26% before buying.
Meeting basic needs can be a struggle for many low-income families. Public assistance for households earning less than half of the area median income helps them make ends meet.
For one out of four low-income Habitat homebuyers, government assistance was crucial as they prepared for homeownership. But we’re happy to know that Habitat’s affordable mortgage* payments enable families to save more, increase wealth, and reduce their need for public assistance.
Habitat homeowners’ reduced use of public assistance saves Minnesota taxpayers $6.4M to $9.3M each year.
Fact #7: Most Habitat mortgage payments are less than the average rent in the Twin Cities
There is not one county in the United States where a full-time minimum wage worker can afford to rent a two-bedroom apartment (spending 30% or less of their take-home income). In most counties, minimum wage workers would have to work almost 80 hours per week to afford a one-bedroom apartment. When 40%, 50%, or even more of your money is spent on housing, there isn’t enough left over to pay for adequate healthcare, decent nutrition, or the educational needs of children.
Habitat homeowners are much better off financially than those who rent. With our mortgages structured to cap monthly payments at 30% of household income, Habitat homeowners can pay their monthly housing payment and still have money left for other necessities and savings.
When homeownership rates go up, it lifts the entire community. Habitat homebuyers tend to be active in their communities, and they’ve reported that their kids’ academic performance improves after becoming homeowners. When the cycle of poverty is broken through homeownership, the positive impact multiplies for generations.
Fact #8: Twin Cities Habitat for Humanity guides its own policies and practices, largely independent of Habitat for Humanity, International
Local Habitat for Humanity affiliates are independent, nonprofit organizations that operate within specific service areas and abide by the framework of the Habitat Affiliate Covenant. Each affiliate focuses its building, repair, mortgage lending, and fundraising efforts within their service area. Habitat for Humanity, International shares branding, marketing, and research with local affiliates to help us achieve our goals, but it exercises no direct authority over local affiliate programming.
We’re grateful to be part of a network of 1,300+ Habitat affiliates worldwide and are proud to participate in Habitat’s global mission through our global engagement work. We’re also proud to be a leader among Habitat affiliates—we were recognized by Habitat for Humanity International as an Affiliate of Distinction, one of just five affiliates of our size to receive the honor.
Fact #9: Habitat for Humanity is a non-governmental organization
Both Habitat for Humanity, International and Twin Cities Habitat for Humanity are independent, nonprofit organizations and are not part of the government.
We do accept some government funds, grants, and property to advance our mission and our neighborhood revitalization efforts. To access these funds, we must meet certain criteria and be good stewards of those resources.
Fact #10: Habitat for Humanity, International was founded by Millard and Linda Fuller—not President Jimmy Carter
Habitat for Humanity was started in 1976 in Americus, Georgia by the late Millard Fuller and his wife, Linda. The idea for the ‘fund for humanity’ was based on Reverend Clarence Jordan’s work at Koinonia Farm. He wrote, “What the poor need is not charity but capital, not case workers but co-workers.” It’s this basic philosophy of ‘co-working’ that continues to guide our work today.
But what about former President Jimmy Carter? You’ve probably heard about his affiliation with Habitat for Humanity, but let’s be clear: Jimmy Carter is not the founder of Habitat.
However, President Carter and his wife, Rosalynn, are longtime supporters and dedicated volunteers. Their home in Plains, Georgia is eight miles from Americus and they’ve been connected to Habitat’s mission since 1984.
Each year, they lead the Jimmy and Rosalynn Carter Work Project to help build houses and raise awareness of the need for affordable housing. In October of 2010, the Carter Work Project spent a week in Minneapolis and St. Paul building and repairing homes.
*All Habitat mortgages are originated by TCHFH Lending, Inc., a wholly-owned subsidiary of Twin Cities Habitat for Humanity, Inc.
Want to learn more?
Below are some great sources for information about poverty and housing issues:
- Department of Housing and Urban Development
- Evicted: Poverty and Profit in the American City by Matthew Desmond
- Housing Assistance Council
- Joint Center for Housing Studies of Harvard University
- Minnesota Housing Partnership
- National Low Income Housing Coalition
- The Stanford Center on Poverty and Inequality
- The Urban Institute