The U.S. Department of Housing and Urban Development (HUD) announced Wednesday that it is awarding $10 million in grants to four non-profit organizations that will create homes for hundreds of families.
The grants, known as "sweat equity" grants, combined with the efforts and labor of many volunteers and the homebuyers themselves, will create affordable housing for at least 540 low-income, hard-working families and individuals, according to HUD.
"These grants will make owning a home a reality for hundreds of working families," HUD Secretary Julián Castro said. "These families will become homeowners not only because of our public investments, but because of their own contributions. Our job is to support sustainable homeownership and these self-help programs do exactly that."
The grants, which are funded through HUD's Self-Help Homeownership Opportunity Program (SHOP), will be awarded to the following non-profit organizations: Community Frameworks ($540,000), Habitat for Humanity International ($6.21 million), Housing Assistance Council ($1.56 million), and Tierra del Sol (Western States Housing Consortium, $1.68 million).
SHOP funds are awarded via grants on a competitive basis to regional and national non-profits and consortia that are experienced with self-help homeownership housing programs. The SHOP program has provided more than $396 million that, along with leveraged funds and numerous volunteer labor hours, has resulted in more than 28,500 units of affordable housing since 1996 when Congress first appropriated SHOP funds. SHOP funds are used to purchase land and make infrastructural improvements, not to exceed the average SHOP investment of $15,000 per unit; for construction and rehabilitation of the dwellings, leveraged funds must be used, according to HUD. Many SHOP homebuyers are first-time buyers that come from underserved groups.
Homebuyers are required to contribute a minimum number of "sweat equity" hours toward the building and development of their own homes or others that are participating in self-help homeownership programs, according to HUD. The minimum sweat equity requirement is 100 hours for a household consisting of two or more persons and 50 hours for a household consisting of one person. Community volunteer labor participation is also required. Sweat equity and volunteer labor may include any number of activities related to the construction of a home, including but not limited to painting, carpentry, foundation work, drywall, trim work, roofing, or siding, according to HUD.
Grant recipients may choose to carry out activities directly or distribute the SHOP funds to local non-profit affiliates that will assist with the development of SHOP dwellings, select the homebuyers, coordinate the homebuyer sweat equity efforts with those of volunteers, and help arrange for financing to ensure the homebuyers can afford their homes both for the present and long term.