Financing deal helps boost affordable home construction plan

More Habitat homes coming

The comfort, safety and independence created by affordable housing just got a step closer to reality for more families, seniors and veterans in B.C.’s Interior region.

Thanks to an agreement with Interior Savings Credit Union to provide financing services, Habitat Kamloops will be able to significantly increase the number of homes it helps build each year for those in need.

Historically, Habitat’s home ownership program offered 100% financing with zero interest, no down payment and 500 hours of volunteer work by a recipient family whose monthly mortgage payment was tailored to not exceed 30% of their income.

“That meant Habitat needed to fund 100 per cent of the land and building costs,” says Bill Miller, executive director of Habitat for Humanity Kamloops, adding some of those funds came from a number of sources, including sponsorships, and donated supplies and materials.

“Basically, we have now negotiated a deal that provides a combination of a mortgage with the credit union, and a second mortgage with Habitat,” Miller says. “It has typical mortgage terms covering 65 per cent of a home’s assessed value. And where the home recipients win is the remaining 35 per cent covered by Habitat acts as equity.”

That allows Habitat to buy back the property and offer it to another family, senior or veteran in need if the original homeowner moves.

But moreover, what the addition of financing means is Habitat can build a greater number of houses each year, all while the cost to the home recipients remains at a manageable amount, based on their income.

“Typically, we were only able to provide one of two units each year. This agreement with Interior Credit Union will enable us to move in an entirely different direction that will allow us to build many more,” Miller says, adding the ultimate goal is to provide 40 to 60 homes annually.

“And that can be single-family residences, duplexes, townhouses or multi-family homes.”

While this will help fill part of the need for affordable housing in the region, the local economy will also benefit from getting people into their own homes, thanks to the ability for Habitat to access capital to buy materials and pay for services when building homes.

“Originally, we used the model where we asked the community to donate their time or materials to build a home,” Miller says. “But you can only ask the community for that so many times.

“Now, we can call up a business and tell them to give us their best price.”

Studies have also shown that for every dollar Habitat Canada spends in the community, it creates $4 of economic benefit.

For more information about Habitat Kamloops, visit their website at habitatkamloops.com.


This article is written by or on behalf of the sponsoring client and does not necessarily reflect the views of Castanet.

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