Homeownership - Do I Qualify?
Applications will be evaluated for eligibility in three key areas: need, ability to pay, and willingness to partner. Here is a general summary:
- Your current living situation is inadequate for your family; you have a serious need for an affordable home.
- Your total family income is no higher than 65% of area median income by household size. Please see the chart below. In some instances, the maximum allowable is 60% of median income. Last updated winter of 2019. Please note that income guidelines are revised annually.
- You don’t qualify for a conventional mortgage for a market-priced home.
- You do not currently own a home, and have not owned a home in the last 3 years (some exceptions apply).
ABILITY TO PAY:
- You have a stable income, and enough income to pay a monthly mortgage, including taxes and insurance, of $590-$775 (depending on house size and term of mortgage).
- You are deemed “credit-worthy.” We will evaluate your current debt and other living expenses compared to your income. Although we do look at credit reports, we do not use credit scores. If you are taking steps to repair any credit problems, we will take that into consideration.
WILLINGNESS TO PARTNER:
- You are willing to complete 250 hours per adult of “sweat equity” working on construction of Habitat homes.
- You will complete homeownership courses and various other service requirements.
Is there anything I can do now to get ready to apply for a Habitat home?
YES! Aside from filling out an application, there are certain documents that are always required with our applications. You can collect this documentation and keep it organized, safe, and ready. Here’s a list (under 'Documentation Required to Apply for a Mortgage') of some of the most important items.
Documentation Required to Apply for a Mortgage
- Tax returns. You will be required to submit copies of tax returns from the three most recent years. So be sure to file your taxes, and save a copy, and save copies of your W-2s. You should be aware that non-documented income (such as under the table income) will be an obstacle to qualifying for a mortgage.
- Income documentation, from employment or self-employment. If you are employed, you will need to submit a series of recent paystubs. If you are self-employed, you should maintain financial records so that you can submit profit and loss statements, as well as 1099s or other relevant documentation.
- Regular income. Child support, social security, veteran’s benefits, transitional assistance, or other. Be sure to save your most recent award letters, court order, etc. to be able to document this type of income.
- U.S. citizen or legal permanent residence papers. You will need your U.S. passport or your U.S. birth certificate, or your documentation of permanent legal residency. Keep the original and submit a copy with your application.
- Bills and bank statements. You will need to submit your most recent, at the time of your application.
Repair your Credit
In addition, you can take steps to repair your credit, if needed. We strongly encourage you to request a copy of your credit report - FREE. Do not be tricked by commercials or internet advertisements that charge for this service! Call Central Source at 1-877-322-8228, or www.annualcreditreport.com. If there are errors, you can take steps to correct them. We understand that families have debt. If you have a debt work-out plan and are keeping up with your payments, it will be favorably considered by our credit reviewers.