Building Homes...Building Hope

Habitat for Humanity Vermilion is a Project Committee of the Lloydminster Chapter of Habitat for Humanity.
Habitat for Humanity is a nonprofit, ecumenical Christian housing organization.
Habitat for Humanity works in partnership with people in need to build and renovate decent, affordable housing. The houses are then sold with no interest charged.
Our goal is to provide families in need a "hand-up" not a "hand-out".

FAQs About Habitat for Humanity


What is Habitat for Humanity?

Habitat for Humanity is an international, non-profit, faith-based organization working for a world where everyone has a safe and decent place to live. Our mission is to mobilize volunteers and community partners in building affordable housing and promoting homeownership as a means to breaking the cycle of poverty.

Historical Background

Habitat for Humanity International was founded in 1976 in Americus, Georgia by Linda and Millard Fuller. The program developed from the concept of "partnership housing", based on Christian principles, where those in need of adequate shelter work side by side with volunteers from all walks of life to build simple, decent houses.

In 1984 Habitat's most famous volunteer, former U.S. President Jimmy Carter, along with his wife, Rosalyn, participated in their first Habitat build project. Their personal involvement in Habitat's ministry brought the organization national visibility and sparked interest in Habitat's work across the nation.

Habitat for Humanity Canada (HFHC) was born in 1985, with the formation of the first Canadian affiliate in Winkler Manitoba. In early 1988 an HFHC national office was established, which is currently located in Waterloo, Ontario.

Size and Scope of Organization

Habitat for Humanity has built more than 300,000 homes in 100 countries around the world. A new home is dedicated worldwide every 21 minutes.

Habitat for Humanity Canada has dedicated more than 1,000 homes from coast to coast since its inception. There are currently 72 affiliates in all 10 provinces and two territories, helping to eliminate poverty housing.

Who controls and manages Habitat for Humanity Canada?

The National Board of Directors determines policy and monitors operations. Board members are dedicated volunteers who are deeply concerned about the problems of poverty housing in Canada. The President and CEO directs the National Office with an administrative staff, assisted by a core group of dedicated long-term and short-term volunteers.

Habitat for Humanity is a grass-roots movement. Concerned citizens from all walks of life come together as volunteers to form a Habitat for Humanity affiliate in their community. Fund raising, house construction, family selection and other key decisions are carried out by local affiliates.

How does Habitat for Humanity work?

Through volunteer labour, efficient management and tax-deductible donations of money and materials, Habitat builds and rehabilitates simple, decent houses with the help of the homeowner (partner) families. Habitat houses are sold to partner families at no profit and financed with affordable, no-interest mortgages. The homeowners' monthly mortgage payments go into a revolving fund, which is used to build more houses.

Habitat for Humanity is not a give-away program. In addition to mortgage payments, each homeowner invests hundreds of hours of their own labour, called "sweat equity", into the building of their house and the houses of others.

THE CONCEPT

Who qualifies for a home?


The three criteria to qualify for a Habitat home are (1) need for affordable housing, (2) ability to repay a Habitat mortgage and (3) willingness to partner with Habitat.

Need for affordable housing is defined by a family income that is below the government-set Low Income Cut-Off (poverty line) for their particular region, and existing living conditions that are inadequate in terms of structure, cost, safety or size. The ratio of shelter expense to total income is also factored.

Ability to repay a Habitat mortgage requires that the family has a stable income sufficient to cover the monthly mortgage payments and other expenses that come with home ownership.

Homeowners must demonstrate a willingness to partner with Habitat by contributing 500 hours of volunteer labor ("sweat equity") towards the building of their home.

How are families chosen?
Families are chosen on the basis of the above criteria. Family selection occurs at the local affiliate by way of an application process. To obtain an application, contact us

What do families contribute and what do they receive in return?

In addition to mortgage payments, each homeowner invests hundreds of hours of their time to assist in the building of their home. In return, Habitat homeowners are given the unique opportunity to buy a home through an interest-free mortgage. Thus, gaining substantial equity they would not have if renting. They also acquire a safe, affordable place to live and the pride of ownership.

How do we acquire land?

Acquiring affordable land has been one of Habitat for Humanity's greatest challenges. Habitat seeks the assistance of governments at all levels in acquiring suitable donated or cost-reduced land. Habitat also relies on individual donors for land donations. In many cases affiliates must purchase land.

How are the homes built?

Through volunteer labour, efficient management and tax-deductible donations of money and materials, Habitat builds simple, decent houses with the help of the homeowner. Habitat houses follow standardized design criteria that maintain the "simple and decent" archetype.

Most Habitat projects are single dwellings or semi-detached homes, but Habitat for Humanity is expanding its build projects to include restoration and refurbishments, condominiums and town home style projects.

How does this program benefit the families and communities in the long-run?

Over time, a families' equity in their home increases. Habitat families also often see an improvement in their financial situation since the percentage of their income being spent on housing remains at 25%. Prior to purchasing a Habitat home many of these families are spending over 50% of their income on rent.

A safe, healthy living environment contributes to the positive growth and development of children. Habitat has recorded many examples of children within Habitat families becoming healthier, completing a post-secondary education and establishing successful careers.

Communities benefit as former renters become homeowners who contribute to the tax base. Habitat build projects also offer an opportunity for community members, of all walks of life, to come together and work side by side in a meaningful way.

As the poverty cycle is broken, and a family's financial situation improves their dependence on local social services is decreased. In addition, pride of ownership leads to a renewed sense of confidence, and along with their stable, long-term housing arrangement, they become long-term contributors to the community and the local economy.

THE ECONOMICS

How are the homes funded?

Habitat builds homes with volunteer labour and as much donated or cost-reduced material as possible. Fundraising takes place to help offset expenses of materials, services and land when they are not available through donations. Financial support is received from individuals, corporations, service groups and the faith community.

Mortgage payments from current homeowners are retained by the affiliate, which holds the mortgages, to fund future projects.

Average cost per square foot?

The average cost per square foot of Habitat houses in Canada is about seventy-five dollars. This cost reflects building materials and services only. Any costs associated with acquiring land would be in addition to this. Labour is volunteered.

What does a Habitat house cost?

Currently, a three-bedroom Habitat house in Canada costs the homeowner between $60,000 and $120,000. Prices will differ slightly depending on location and the costs of land, labour and materials.

Habitat houses are affordable for low-income families because there is no profit included in the sale price and no interest is charged on the mortgage. The average length of a Habitat mortgage in Canada is 25 years.

Who holds the mortgages?

Mortgages are held by the local Habitat affiliate office until the mortgage is paid off.

How are donations distributed and used?

Donations, whether to a local Habitat affiliate or to the National Office, are used as designated by the donor. Gifts received by HFHC that are designated to a specific affiliate or project area are forwarded to that area. Any undesignated gifts are used where needed in Canada and for administrative expenses. HFHC's audited financial statements are available upon request.

How is the selling price determined?

The selling price is computed by determining costs in two separate areas: (a) construction and (b) site acquisitions and development. Construction costs include the cost of purchased building material, the value of donated building material, contracted labour costs (or value if donated) and administration costs (at a maximum of $3000 per house).

It is important to note that donations will vary from house to house. A major objective is to keep selling costs equitable for all families receiving comparable houses, regardless of the amount of donations for any given house.

The rule for determining the cost of site acquisition and development should be affordability to the low-income family, rather than market value. Canada Customs and Revenue Agency requires that a reasonable value for land costs be included in Habitat mortgages. The key to dealing with this issue is for affiliates to consistently apply the same method to all of their houses, so that each family is treated the same.

How does Habitat for Humanity relate to government?

Habitat for Humanity does not accept government funds for the construction of new houses or the repair of existing dwellings. Habitat for Humanity does accept government funds for the acquisition of land or houses in need of rehabilitation. Habitat for Humanity also accepts government funds for streets, utilities and administrative expenses, as long as the funds have no strings attached that would violate Habitat's principles or limit its ability to proclaim its Christian witness.

How is this a hand up, not a hand out?

Habitat houses are sold to families, not given to them free of charge. In addition, families help to build their own home.

By building homes at low cost, requiring very little or no down payment, and not charging interest on the mortgage, Habitat for Humanity is able to provide an opportunity, or a "hand up", to buy a home for families that would not otherwise qualify for a conventional mortgage.

The revolving fund for humanity

The homeowners' monthly mortgage payments go into a fund that is used to build more homes. The more homes that exist, the more cash flow there is available for further building. This "revolving fund for humanity" fuels exponential growth in the number of houses that are built over time.

What happens when income/financial position of families change?
The income of all Habitat homeowners is reviewed on an annual basis. If income increases, monthly mortgage payments are adjusted to remain at 25% of their monthly income. If income decreases, usually due to a temporary situation such as a job loss, similar adjustments may be made to maintain affordability during this period of decreased cash flow.

Habitat for Humanity is committed to educating and supporting partner families toward successful homeownership. This commitment has resulted in a low mortgage default rate of about 1% in Canada.

What if the family decides to sell their house at a profit, just months after they take possession?

The Habitat mortgage is designed to keep monthly payments low, encourage long-term commitment and prevent short-term profit. This is done by way of a second mortgage. The first mortgage reflects the actual cost of the house, which is usually far less than it's fair market value. The second mortgage reflects the difference between the actual cost and the fair market value.

If a family were to sell their house in the early years of their mortgage (within the first 12 years) the outstanding second mortgage would then be payable.

Habitat for Humanity has the right to purchase the property if the homeowner wants to sell.

What happens if the family does not make their mortgage payments?

Habitat makes every effort to work with the homeowner families to avoid foreclosure through financial counseling, renegotiated mortgages, etc. Strategies such as payment plans and deeds in lieu of foreclosure are implemented when possible.

While foreclosure is the last resort, sometimes it cannot be avoided. Ignoring homeowners' delinquencies can be unfair to other homeowners.