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Peninsula Housing Authority Encourages Low-Income Homeownership

In Practice
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Peninsula Housing Authority Encourages Low-Income Homeownership

Photograph of four people participating in the construction of a home by lifting the framing of the fourth exterior wall into place.
Households in PHA’s Mutual Self-Help Homebuilding Program must work at least 16 hours per week while all of the homes are constructed. Image courtesy of the Peninsula Housing Authority.
For low-income households, downpayment requirements often are a barrier to homeownership. In two rural counties at the northern tip of Washington’s Olympic Peninsula, the Peninsula Housing Authority (PHA) helps households overcome this barrier and become homeowners, through its Mutual Self-Help Home Building program. The program allows participants to exchange the traditional downpayment for sweat equity by helping to construct their own home as well as the homes of others in their neighborhood.

Expanding to Meet Regional Needs

The Mutual Self-Help Home Building program began in Clallam County in 2003 and expanded to Jefferson County in 2013, after the housing authorities of the counties merged to become PHA in 2011. Both the merger and the program are attempts to efficiently address the lack of affordable low-income housing in those rural counties, where more than half of renter households spend at least 30 percent of their income on housing.

The program is primarily sustained through U.S. Department of Agriculture (USDA) Rural Development grants (for administrative costs) and loans. Under the program, PHA buys the land for the homes, and instead of a downpayment, prospective homeowners actively participate in building their own new homes as well as those of other participants in their development; they can move in only after all of the homes have been completed. Participants must complete 32 hours of work per week in their names for the duration of the project (generally 10 to 12 months); of these hours, 16 must be completed by the participating household and 16 can be donated by volunteers. Physically disabled participants may have volunteers donate all of the required hours. PHA’s construction supervisor trains and supervises program participants in addition to managing contractors and ensuring that materials are delivered.

A number of organizations support PHA’s homebuilding program in various capacities. Community Frameworks uses HUD’s Self-Help Homeownership Opportunity Program funds for land acquisition and preparation. The Rural Community Assistance Corporation provides technical assistance to PHA on community outreach, agency management and budgeting, USDA rules and regulations, homeownership training, and other subjects. The Port Angeles Association of Realtors offers a grant for the remaining principle on a case-by-case basis to lower participants’ monthly mortgage costs. Other local partners include Habitat for Humanity of Clallam County, which has helped construct homes, and Serenity House of Clallam County, Dove House Advocacy Services, and Olympic Community Action Programs, which have referred applicants to the program.

Program Requirements

Photograph of the front façade of a one-story, single-family home as construction nears completion. The house includes an attached garage.
Under the Mutual Self-Help Homebuilding Program, participating households obtain a fixed-rate loan for a 2- or 3-bedroom home, with monthly payments that are often less expensive than market rate rents. Image courtesy of the Peninsula Housing Authority.
To be eligible for the homebuilding program, applicants must earn less than 80 percent of the median family income for their county: $45,350 in Clallam County and $50,950 in Jefferson County for a four-person household in 2013. PHA reserves approximately 40 percent of homes for households earning less than 50 percent of the county’s median income. Applicants for the homebuilding program may use Section 8 Homeownership Vouchers to help with monthly mortgage payments and other homeownership expenses.

PHA offers all applicants to the homebuilding program loan screening and credit repair assistance as well as prepurchase counseling, which is required for applicants who have not owned a home within the preceding three years. Carolyn Stimbert, the housing coordinator for Mutual Self-Help Home Building, states that PHA has helped applicants for a year or two to comply with USDA standards for credit scores, debt to income ratios, and other loan requirements.

Benefits for Participants

The homebuilding program provides participants with multiple benefits. Not only are low-income households able to begin building wealth through homeownership, but the cost of monthly mortgage payments, taxes, and insurance for their new three-bedroom homes are also often lower than market-rate rents for two-bedroom units. The program’s fixed market-rate mortgages ensure that residents will have the security of stable monthly mortgage payments. In addition, residents benefit from reduced energy costs because homes built under the program exceed local energy-efficiency regulations by 15 percent.

The program offers participants the opportunity to help build homes that are customized to match their budgets and physical needs. Although PHA typically builds three-bedroom homes, recently the organization has planned two-bedroom homes for the elderly and disabled. The smaller homes are less expensive to build and purchase, which may help elderly or disabled households qualify for loans. Although all of the homes in the homebuilding program are accessible, PHA will install additional accessibility features to meet a disabled resident’s particular needs. Finally, Stimbert notes that program participants benefit from the sense of community that develops as they work together to build their homes.

The Dream of Homeownership

PHA’s homebuilding program has produced 62 homes in Clallam County for low-income households. Participants for the program’s first planned project in Jefferson County, which will include seven homes, are still being selected, and PHA hopes to begin construction in February 2014. Local support for the program and PHA’s willingness to customize the housing to a resident’s accessibility needs help make the program successful. By overcoming the barrier of a downpayment, the homebuilding program creates an affordable alternative for many housing cost-burdened, low-income renter households in this rural area. According to Stimbert, “The dream of homeownership is still alive,” and the homebuilding program helps make that dream a reality.

The fall 2012 issue of Evidence Matters provides a more in-depth discussion of barriers to low-income home ownership and details efforts to overcome these barriers.


The contents of this article are the views of the author(s) and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban Development or the U.S. Government.