QUALIFICATIONS FOR A SELF-HELP HOME

Income Qualification

To qualify for this program, your income must be at or below 80% of the Area Median Income (AMI) as listed in the table below. Additionally, in most cases, child care expenses can be deducted from your total income.

Eligible Income Sources:

• Public assistance (SNAP, SSDI, Section 8, etc.)

• Child support

• Alimony

• Consistent retirement income

Important Notes:

The AMI figures below are based on zero debt and the current area loan amount. They may not apply perfectly to every individual situation.

Income guidelines are subject to change periodically. Please verify the current guidelines with Self-Help Homes.

If you feel you do not meet the income requirements, please don’t hesitate to contact us. We’d be happy to review your specific income details with you.

Debt-to-Income Ratio Requirement

Your debt-to-income (DTI) ratio cannot exceed 41% of your household income. Depending on your income, you typically cannot have more than $400–$500 in other monthly debt payments in addition your potential house payment.

Debt payments include:

• Credit cards

• Car payments

• Child support

• Alimony

• Installment loans

• Student loans (0.5% of the balance if in deferment/forbearance, or the monthly payment amount. We highly recommend getting on an income-based repayment plan)

A USDA-RD approved mortgage calculator is used during the application process. This tool will determine exactly how much debt your household can have while still qualifying for a mortgage payment.

Credit Score Requirement

To qualify for this program, you must have a credit score of 640 or higher. Your credit score can be verified with at least one line of credit.

Important Notes:

• Collections and judgments may impact your credit score and will be assessed on an individual basis.

• If you have filed for Chapter 7 Bankruptcy, you must wait 36 months before applying for this program.

• If you have filed for Chapter 13 Bankruptcy, please contact us for further guidance.

• If you are asked to submit a full application, Self-Help Homes will process a TransUnion credit report at the time of submission.

• A tri-merge credit report will be processed by USDA-RD once your mortgage application is submitted for final review.

Payment Shock Requirement 

To ensure a smooth transition into homeownership, the following payment shock limit applies:

Payment Shock Limit: Your mortgage payment should not exceed 100% of your current monthly housing payment.

Example: If your current rent is $800.00 per month, and your potential mortgage payment is $1,601.00 per month, this would exceed the payment shock limit.

If you are concerned about payment shock, there are other options available. Please contact our office for more information.

Weekly Work Commitment:

• Each family within your group must contribute a minimum of 35 hours per week until the project is completed (approximately 8-10 months).

• At least 50% of the 35 hours per week must be completed by the individuals listed on the mortgage.

• The remaining hours can be fulfilled by friends or family members.

• If additional assistance is not available, the mortgage holder(s) must complete the full 35 hours per week.

Mandatory Work Hours:

Saturdays: At least one individual listed on the mortgage is required to work at least 6 hours on Saturdays, from 8:00 a.m. to 2:00 p.m.

Additional Days: Each family must also work at least two other days during the workweek to ensure consistent project progress. These hours can be done on your own schedule.

Property Ownership Requirement

To be eligible for this program, you cannot currently own a house or property. If you own property, it must be sold before applying for the program.

Important Notes:

Self-Help Homes recommends maintaining a minimum balance of $5,000 in your savings account at the time of application. This ensures you have sufficient funds to cover necessary expenses throughout the process.

If your liquid assets exceed $15,000 USDA-RD regulations will require you to apply the surplus amount as a down payment.