The U.S. Department of Housing and Urban Development recently awarded $13.5 million in “sweat equity” grants to produce at least 741 affordable homes for low-income working families and individuals. Funded through HUD’s Self-Help Homeownership Opportunity Program (SHOP), the grants awarded, along with the labor contributed by these families, will significantly lower the cost of homeownership.
“These grants are about families devoting their own sweat and labor into their American Dream,” says HUD Secretary Shaun Donovan. “With the help of these organizations and armies of volunteers, families are able to see that dream become reality brick by brick.”
HUD’s SHOP program provides federal grants on a competitive basis to national and regional nonprofit 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 may not exceed an average $15,000 per dwelling unit. Leveraged funds must be used for the construction or rehabilitation of these homeownership units. Grantees may carry out activities directly and/or distribute SHOP funds to local nonprofit 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.
All newly constructed units will receive certification as an ENERGY STAR Qualified New Home and all appliances and products or features which 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.
Homebuyer households of two or more persons must contribute a minimum of 100 hours of sweat equity on the construction of their homes and/or the homes of other homebuyers participating in the local self-help housing program. Single person households must contribute a minimum of 50 hours of sweat equity. Reasonable accommodations are made for homebuyers with disabilities. Sweat equity involves participation in the construction of the housing, which can include, but is not limited to, assisting in the painting, carpentry, trim work, drywall, roofing and siding for the housing. Labor is also contributed by community volunteers. The sweat equity and labor contributions by the homebuyers and volunteers significantly reduce the cost of the housing.
Most of the families who benefit from SHOP homes are first-time homeowners so the new home fulfills a lifelong dream. The organizations that receive the SHOP grants also ensure the new homeowners can afford to stay in their homes for the long term to provide a safe, healthy, stable environment to raise children, access jobs and build community.
Since 1996, the SHOP program has provided more than $373 million in federal grants that, together with significant leveraged funds and numerous volunteer hours, are transforming lives and neighborhoods through the production of over 28,000 units of affordable, homeownership housing.
For more information, visit www.hud.gov.