It took thousands of volunteer hours and countless boards, nails and other supplies to build the nine Habitat for Humanity houses in Newton. Community members have banded together to construct the homes, and now they'll be receiving a little extra help from a new source: the city of Newton.
At their Tuesday meeting, Newton City Commissioners voted to grant Habitat for Humanity $180,000 in funding. The money will be dispersed on a per project basis and is in the format of a loan that will be repaid.
Tim Johnson, assistant city manager, previously told commissioners the funds come from the federal Community Development Block Grant program, which provides communities with resources to address development needs.
City Clerk Denise Duerksen said the city has about $430,000 available but is restricted in how it can use those funds. Right now the city also is working with Hope Home Repair and is providing about $80,000 in funding.
“You can only use it for these projects — you can’t use it for anything else,” Duerksen said.
The Habitat for Humanity program has operated in Harvey County for about 16 years.
The cost to build a new Habitat home is about $80,000. The actual cost of building the home is the amount of the first mortgage, and the difference between the cost of building and the appraised value is the second mortgage. The mortgage is paid back on a 0 percent interest loan over a 20-year period. Each year that all payments are made on time, 10 percent of the second mortgage is forgiven.
Families who would like a Habitat home must submit applications, which are evaluated based on the family's size and income, and their inability to obtain adequate housing through conventional means. The family also must be able to demonstrate they can pay the mortgage, taxes, insurance and other monthly expenses.
There is a required $1,000 down payment before construction begins. Taxes and insurance are escrowed and paid like a regular home loan.
Families also are asked to help with the construction of the home. Every adult family member must contribute at least 250 hours of volunteer work. Friends and relatives can join in and donate their hours toward the family's minimum 500 hours of "sweat equity."
The organization's goal is to construct one home a year, and they estimate once they reach 25 homes, they will have a revolving revenue stream to support the building of subsequent homes.