Frequently Asked Questions
Build a Home
Below are some frequently asked questions about building a Self-Help Home.
What is the mutual self-help housing program?
The mutual self-help housing program is a way to help families/individuals achieve home ownership. A non profit company, called Self-Help Homes, assists groups of 6-12 families/individuals form an informal partnership to help each other build each others houses. Technical assistance and training is provided by a superintendent from Self-Help Homes.
How does a self-help housing program work?
Three elements are necessary to make self-help housing work.
- Technical assistance from Self-Help Homes to assist the participants with loan applications and house construction;
- Mortgage loan financing; and
- Families who want to become home owners, and are willing to do most of the work in building their homes.
How many families are in each group?
Generally, a group in the program is made up of 6-12 families.
How many hours of labor does each family contribute to the construction of all the houses in the group?
Each family contributes as much labor as is required to complete all the houses in the group. Generally, about 1,200 hours of labor per family is required, with each family contributing at least 35 hours each week to the building group. "Family hours” include the labor of all owners, any child 16 years of age or older, and 1-3 approved helpers (optional).
When are the houses built?
Most of the construction takes place on Tuesday-Saturday between 8:00 a.m. and 10:00 p.m. Since some participants in the program must work during the day, most work is done in the evenings and on weekends.
Can I select my house plan?
Self-Help Homes has a variety of house plans available in each project area. The size of the house depends on the size of the family, what the family can afford, and the size of the building lot. In many cases, the house plan is assigned to a specific lot.
Can I make changes to my house?
No. These are not custom homes and have to be built according to USDA-Rural Development approved plans. Once you move into your home, you are allowed to make any changes you would like.
Can my children help me build the house?
Children 12 and younger are not allowed at the work site to protect their safety. Children 14 to 16 are not allowed to help build the house. With prior permission from the Construction Supervisor, they may be allowed to do other lessor work i.e. pick up trash, help with additional tasks, etc.. Children 16 years and older are allowed to help build the houses but must be at least 18 years old to use any power tools.
Do all the houses in the group need to be completed before any of the families can move in?
Yes. The program involves sharing labor to complete a common goal. All of the members of a group work on all of the homes, and every house will be completed within a few days of each other.
Can single parent households participate in the program?
Yes. However, there is no reduction in the labor commitment for these families. We have had many single participants complete the program.
Do I have to have construction experience to be in the program?
No. Each participant must meet the same eligibility requirements.
Who provides the loan money for the land, construction materials, fees, and any subcontractors that may be required?
The USDA provides loans for the land, construction materials, and any subcontracting that may be required to self-help owner-builders in rural areas. If another source of mortgage financing is used, Self-Help Homes obtains construction financing which the family repays with a home loan after construction is completed.
What will the interest rate be for my mortgage?
USDA-Rural Development uses current interest rates at the time of closing. Depending on your income and family size, that interest can be subsidized down to 1%.
Who can qualify for a self-help housing loan?
Generally, there are four qualifications:
- Good credit status
- Stable income from employment or other sources
- Income that does not exceed eligibility guidelines. See chart
- Ability and willingness to meet the labor requirement
How long does it take to build a self-help home?
It largely depends on how efficiently a building group works together. Usually, the construction takes between 8-10 months.
Can I just work on my own house?
No. Families enter into a contract with each other to share the labor on all homes within the group. This labor sharing agreement is a fundamental principle of the program.
Can I participate if I have already owned a home?
Yes, however, you cannot own a home when applying for or participating in this program.
How much cash will I need to participate?
Only $500 cash is needed for a down payment, because your labor is the principal down payment. However, you will also be required to pay for a credit report, hand tools and a Tool Deposit which together will cost around $500.
Are families with disabled or handicapped members eligible?
Yes. However, there is no reduction in the labor contribution to the building group for any participant family. In cases where one of the future owners cannot physically do construction work, arrangements for additional work from approved helpers must be made by the participant. There are also house plan modifications available when there are special needs in a household.
Can I sell my home after I build it?
Yes. However, you will owe back the money you borrowed.
Do I get to pick my own finish products, i.e. counter tops, flooring, etc.?
Yes, Self-Help Homes has a show room with selections of counter tops, flooring, cabinets, lighting, and other finishes, including exterior packages that have been professionally designed.
Is there a normal "range” of what the mortgage payment would be?
Subsidized interest rates are determined by income and family size and payments typically range from $1,000 to $1,300 per month. Payments are determined by the closing rates, area of interest, current property taxes, insurance rates, etc...
How much is a typical mortgage after all is said and done?
Depending on the city, lot cost and house plan chosen, mortgages can range from $260,000 (Washington County) to $360,000 (Utah/Wasatch Counties).
How much will I save compared to buying from another home builder?
Typically, you can save between 10% to 20% compared to another home builder, building the same home. Many factors help reduce the cost such as: no builders mark up, sweat equity, and site costs.
Am I disqualified if I have a bankruptcy and/or foreclosure?
There is a 36-month waiting period from the date of discharge for a bankruptcy and/or foreclosure.
How big are the lots?
Lots are typically range from .17 to .25 of an acre.
Is the price of the lot included in my mortgage?
How long does it typically take to form a group to build our homes?
Generally 6 months from the time of full application review. Waiting lists are currently about 12 months.
Will I belong to a Home Owners Associations?
It depends on the neighborhood and available area we have to build.
What if I make a mistake in the construction process?
Mistakes can and will happen, but are always corrected. Self-Help Homes helps you reduce mistakes by training in specialized labor tasks to fit each participant’s abilities. In general, participants repeat these labor tasks on each home, until they are given a new task.
Can I rent out my house?
Yes, however, you cannot receive any subsidy from USDA-Rural Development, and your full monthly payment would be due each month. This would also need to be worked out directly with USDA-Rural Development.
Can I participate in the program if I am not a citizen of the United States?
You must have a Permanent Resident Alien card to participate in the Program, which must be approved through USDA-RD.
What is technical assistance?
Technical assistance is the process of organizing and supervising groups of families in the building of their own homes. It is provided by Self-Help Homes and includes the following functions:
- Locating suitable building sites.
- Recruiting future owners who are interested in sharing labor in the construction of each others' homes.
- Assisting at meetings of the families at which the self-help program and subjects related to home ownership, such as taxes and insurance, are explained and discussed.
- Assisting families in selecting house plans which meet their needs and are within their ability to repay.
- Developing cost estimates for construction materials and any subcontracting that will be required.
- Providing assistance in the preparation of applications for loans to pay for land fees and construction materials.
- Supervising and training families in the proper construction of their homes.
Who provides technical assistance?
Technical assistance is provided by the staff of Self-Help Homes.
Do the Self-Help participants pay for technical assistance?
If the building site is in a USDA-eligible area, this service is provided without charge by Self-Help Homes. In non-rural communities, some or all of the cost of technical assistance may be included in the sale price of the house to be paid from mortgage funds.
Are there other Self-Help Programs in and outside of Utah?
Yes. Go to the following website at http://selfhelphousingspotlight.org/ and select the "Find a Program Near You" tab to find other Self-Help Housing locations.
If you have additional questions, contact Self-Help Homes at (801) 375-2205. We invite you to take a very short survey about our website.