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HUD Announces $9.9 Million in Sweat Equity Grants

NationalMortgageProfessional.com
May 02, 2016
The U.S. Department of Housing and Urban Development (HUD) has awarded $9.9 million in “sweat equity” grants

The U.S. Department of Housing and Urban Development (HUD) has awarded $9.9 million in “sweat equity” grants to produce at least 541 affordable homes for low-income individuals and families. Funded through HUD’s Self-Help Homeownership Opportunity Program (SHOP), the funding awarded today, along with the labor contributed by these households, will significantly lower the cost of homeownership.

“Homeownership is part of the American dream and it’s all the more meaningful when you’re a first-time homebuyer,” said HUD Secretary Julián Castro. “These self-help program grants encourage new owners and their communities to invest not only money but also time and hard work that benefits the whole neighborhood.”

The following organizations will receive SHOP funds (see individual descriptions below):

►Habitat for Humanity International: $6,188,868
Tierra del Sol Housing Corporation (Consortium): $1,682,632
Community Frameworks: $1,066,000
Housing Assistance Council: $1,040,000
►Total: $9,977,500

The SHOP program provides federal grants on a competitive basis to national and regional non-profit organizations and consortia that have experience in administering self-help homeownership housing programs. The SHOP grants must be used to purchase land and make necessary infrastructure improvements, which together may not exceed an average SHOP investment of $15,000 per dwelling unit. Leveraged funds must be used for the construction or rehabilitation of these homeownership units.

Selected newly constructed units will receive certification as ENERGY STAR qualified units. Selected appliances, products or features that are installed or replaced will be ENERGY STAR qualified. Water usage products will bear the WaterSense label. Many units will also have “Green,” “Healthy Homes,” and “Universal Design” features.

Homebuyers will contribute significant sweat equity toward the development of their units and/or the units of other homebuyers participating in the local self-help housing programs. These sweat equity contributions reduce the purchase price of the SHOP units and make these units affordable for low-income homebuyers. A minimum of 100 sweat equity hours is required from a household of two or more persons. A minimum of 50 sweat equity hours is required from a household of one person. Community participation consisting of volunteer labor contributions is also required. Sweat equity and volunteer labor may include, but are not limited to, landscaping, foundation work, painting, carpentry, trim work, drywall, roofing and siding for the housing. Reasonable accommodations must be made for persons with disabilities.

Grantees may carry out activities directly and/or distribute SHOP funds to local non-profit affiliates that will develop the SHOP units, select homebuyers, coordinate the homebuyer sweat equity and volunteer efforts, and assist in the arrangement of interim and permanent financing for the homebuyers. The grantees ensure that the new homebuyers can afford their homes at the time of purchase and for the long term. Many of the SHOP homebuyers are first-time homeowners and come from underserved groups.

Since 1996, when Congress first appropriated SHOP funds, the SHOP program has provided more than $407 million in federal grants that, together with significant leveraged funds and numerous volunteer hours, are transforming lives and neighborhoods through the production of over 28,500 units of affordable, homeownership housing.

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