This story appears in the 2015 Summer Edition of Rural Voices

by Mike Shimon

A local Habitat for Humanity provider reaches more families using the USDA Mutual Self-Help program

The Marquette County Habitat for Humanity (MCHFH) affiliate, serving Marquette County, Michigan, was established in 1992 as a nonprofit organization with the core mission of eliminating substandard housing. MCHFH works with tenant families living in poor housing conditions and provides them an avenue to realize the dream of homeownership. The families must be low-income and willing to work sweat equity hours to help build their home.

During the first seven years, MCHFH provided homeownership to 16 families but there was a need to serve more families. In 2000, we started working with USDA Rural Development and NCALL Research, a regional Self-Help Technical Assistance (TA) provider. It took many months of work to apply for funding under the USDA Mutual Self-Help program. When it was done, though, we began serving many more families.

In general, self-help housing is a great system because the family partner groups gain marketable construction skills and have a real pride of ownership in the home that they helped construct.

Prior to collaborating with the USDA and NCALL, MCHFH worked with one family at a time and built one house at a time. Under the USDA model, partner family groups work together on each other’s homes until all homes in that group are complete. No family moves in until all homes in that group are complete. At that time, a group dedication ceremony is held and all families move into their homes at the same time.

In general, self-help housing is a great system because the family partner groups gain marketable construction skills and have a real pride of ownership in the home that they helped construct. Through required education programs, they also learn about budgeting, finance, insurance, and home maintenance.

MCHFH funds the construction and other expenses to build each home. The family receives a zero-interest mortgage equal to the total of these costs. MCHFH originates and services all mortgages. In addition, we require the families to make monthly escrow payments for taxes and insurance. Typically, a family will receive a 25- or 30-year, zero-interest mortgage based on the family’s ability to pay.

Loan payments go into a revolving fund referred to as “Funds for Humanity.” The proceeds from the revolving fund support approximately two houses per year. The net-profit from our Habitat ReStore,where we sell donated new and gently used furniture, home accessories, building materials, and appliances at a low-cost to the public, provides enough revenue to fund an additional house annually. We have several other funding sources that help us to build one or two additional homes. Funding is a big challenge for us and we are looking into using the USDA Section 502 program in the future.

Of the 94 homes built in Marquette County since 1993, 66 families are still living in their homes. Twenty-eight families moved out of their homes. The homeowners sold about 80 percent of these homes on their own. The remaining families deeded their home back to Habitat in lieu of foreclosure. These homes were either sold to a low-income family using a USDA Section 502 loan or sold on the open market.

Of the families recently served, 77 percent are very low-income, 7 percent are a racial or ethnic minority, and approximately 60 percent are female-headed households. Most of the families have steady employment income and all seem to be committed to improving their lives.
One of the challenges MCHFH faces with the group system is the size of our county. MCHFH is located in the city of Marquette, a community in the Upper Peninsula of Michigan. The service area for MCHFH is 3,425 square miles. It is the largest geographical county east of the Mississippi in the United States and has a population of over 60,000 residents. This rural county provides lots of challenges because of its size, the weather, and the fact that nearly all of our homes are built on scattered sites in multiple cities. This requires substantial time and travel needs for the families.

It was a relatively easy transition from serving one family at a time to adopting the self-help model that required all of the families to work together until all of the houses in a particular group were completed. The biggest challenge in our program is keeping the families motivated because we build on scattered sites and in different communities.

There are some very basic similarities between the Habitat for Humanity and the USDA Mutual Self-Help Housing programs. Family selection, the family commitment to partner with sweat equity, and their ability to pay a mortgage are critical factors to both organizations.
The Marquette County community has benefitted significantly since we have partnered with USDA. Since our inception in 1993, we have built 94 homes. During the past 15 years, 78 of those homes have been USDA-backed self-help houses. This has made a major impact on improving the low-income homeownership opportunities.

Mike Shimon is the Executive Director of Marquette County Habitat for Humanity in Marquette, Michigan. Marquette County Habitat for Humanity is a nonprofit, ecumenical Christian housing ministry seeking to eliminate poverty housing, and to make decent shelter a matter of conscience and action.

This story appears in the 2015 Summer Edition of Rural Voices

by Bob Marshall

Early efforts in rural California became a Self-Help Housing model for the nation

In 1937, the American Friends Service Committee (AFSC) helped 50 coal mining families build their own homes in western Pennsylvania. This was the beginning of a movement that crystallized in 1963 when the first self-help housing homeowner loans were made to families through the USDA’s Farmers Home Administration (FmHA).

Bard McAllister, working for the AFSC in Tulare County, Calif., pushed the concept of self-help housing on behalf of farmworkers. Until 1961, the FmHA could make housing loans to farmers, but not to farmworkers. Bard McAllister worked with the Secretary of the Commission on Agricultural Life and Labor in Washington, D.C. to draft legislation making agricultural workers eligible for housing loans. Congress included this provision in the Housing Act of 1961.

The first “official” self-help housing loans under this Act were made to three families in Goshen, Calif. in January 1963. With Howard Washburn as supervisor, the AFSC operated this initial program. At first, loans could be made only for the houses, not for the land. To work around that stipulation, the AFSC purchased the land with other loans and used a grant from the Rosenberg Foundation for technical assistance. By 1965, Congress removed the restriction against including land in the FmHA loans.

Also, in 1964, the federal Office of Economic Opportunity (OEO) was created. In 1965, Bard McAllister, Howard Washburn, and Everett Krackov, Director of the OEO-funded Tulare County Community Action Agency (TCCAA), applied for a grant from the Migrant Division of the OEO to administer a self-help housing program. Self-Help Enterprises (SHE) was created as a nonprofit corporation and, initially as a delegate agency of the TCCAA, received OEO funds.

In August 1966, I was hired to assist Howard Washburn and others to administer SHE. The day my family and I arrived in California from Pennsylvania, Howard, his wife, and two of their four daughters were killed in a head-on auto accident. Such a tragedy. Three months later, the Board of SHE asked me to be the executive director. I continued in that role until my retirement in 1989. This was a great and challenging opportunity for me and I am most thankful for it.

Photo by George Ballis

In the early years, it seemed like the most difficult task was getting family loans approved by FmHA. Every family’s loan application had to be approved by both the FmHA county supervisor and the FmHA county committee. The latter was composed of three persons, usually farmers. In some counties it seemed like the primary rule was to reject families. The committees were concerned with repayment ability and rightfully so. But OEO was concerned with getting people out of poverty and so were we. The marriage between OEO and FmHA was never a smooth one. In 1970, the FmHA county committee was eliminated, making things a bit easier.

OEO staff liked our program and wanted SHE to work statewide in California. However, SHE board and staff decided that the San Joaquin Valley was a more manageable service area and that SHE would offer technical assistance and support to other agencies wishing to start self-help housing programs.

This we did, and soon several other self-help housing nonprofits cropped up in California. We were also asked for help from agencies in other states. In a sense, SHE was the self-help housing model for the nation.

In 1967, Clay Cochran created the International Self-Help Housing Association (ASHHA), later renamed Rural America, with the purpose of spreading the concept of self-help housing and providing training and expertise to organizations beginning their own self-help programs. SHE supported and worked closely with ISHHA in these endeavors.

In 1973, various self-help organizations came together to create the California Self-Help Housing Association (CSHHA), which met periodically for mutual support. At that time, housing programs for the poor were getting squeezed for funds. CSHHA held a statewide
“Self-Help Housing Day” in Galt, a town near Sacramento, where the Rural California Housing Corporation was building self-help houses. Approximately 500 people attended the event. The state Senate and the state Assembly designated a “Self-Help Housing Week” in March 1973, commending self-help programs for their valuable contributions to community life.

In a sense, SHE was the self-help housing model for the nation.

SHE has also played an active role in the National Self-Help Housing Association, working closely with the National Rural Housing Coalition, and helping support the housing lobbying work carried out for both groups by Bob Rapoza and Rapoza Associates.

SHE recognized that the OEO was not a permanent agency and that one day it would be dismantled. So, by 1971 or 1972, SHE began working with other agencies to identify and support a permanent home for the technical assistance (administrative) grants. FmHA seemed like the logical choice, and by 1972 legislation was approved to accommodate this transition. Thus in 1973, SHE wrote a grant proposal to FmHA for an eight-county, one-year plan to provide technical assistance support for self-help housing. This was approved and thus began the program, which continues nationwide today as Section 523.

Over the years, SHE has developed a solid working relationship with staff at FmHA, now the Rural Housing Service and USDA Rural Development. We felt that we were partners in a valuable home-building and family-building program, and the relationship has become a mutually supportive one. Certainly there are differences, and SHE stands up for the families when it seems they are not getting a fair shake. However, the evolution of the relationship between these two agencies since 1966 has been great.

Additionally, in 1971, the Housing Assistance Council was created, again with Clay Cochran as a major contributor. HAC had a technical assistance staff and a substantial land loan fund. SHE became an early and frequent borrower from that fund.

Since the inception of SHE, volunteerism has been a major factor for the organization. For a period of four or five years, Franciscan Brothers assisted in construction roles. They helped with land development, carpentry, plumbing, and electrical work. They lived with building families and helped kids with their homework in the evenings, a great service. In a six- or eight-year period, 120 VISTA volunteers provided critical assistance to the program. Their roles included providing family education and training, helping to start a housing rehabilitation program, giving social service support, donating construction assistance to supervisors, and much more. Several of these contributors have continued in the field and are directing self-help housing programs today. My successor, Peter Carey, directed the program for 24 years, retiring in 2014. Tom Collishaw was appointed to the role upon Peter’s retirement. Both men were one-time VISTA Volunteers at SHE.

SHE also encourages work camps of young people spending a week or more working with the families. Many years ago when our daughter, Gwyn, was 15, she was in a seven-week AFSC work camp held with a building group in Planada, Calif. These young high school students were housed in a partially completed self-help home. They worked along with the families on their homes. I’m not sure who benefitted most, but I think it was the young people.

A statement from Mrs. Salvador Gutierrez, a SHE participant, stays with me to this day. She said, “It is difficult to express in words what it means to me and my family to be able to see our own home being built. It is beyond any dreams. The problems have been many and the hours long, but the feeling of having something of our own helps to make me forget the years of helplessness and depressed feelings. I believe that with faith in God and by people working together hand in hand, we can accomplish whatever we want. We don’t want anything handed to us; we just want an opportunity to work with our hands and pull ourselves out of the situation we are in.” This is the essence of the self-help movement.

As I look back upon that experience today, I realize how fortunate I was to have been part of it. Seeing families working together and then gathering with them at their move-in ceremony are highlights. Getting to know and work with the many fine people at SHE, HAC and related endeavors have been my great privilege. May the work throughout this nation continue well into the future!

Bob Marshall became Executive Director of Self-Help Enterprises (SHE)in 1966, a position he held until 1990. Under his leadership, SHE became the largest mutual self-help housing organization in the nation. Marshall’s influence reached far beyond California’s San Joaquin Valley, and he was active in the growth of mutual self-help programs across rural America. He was a founder of the National Rural Self-Help Housing Association, a member of the Housing Assistance Council board of directors and a respected mentor and encouraging voice for rural housing. Bob and his wife Joy are still active in the community of Visalia, California.

This story appears in the 2015 Summer Edition of Rural Voices

by Suzy Huard

USDA’S Section 523 Technical Assistance Grants make Mutual Self-Help housing possible

Community Concepts, Inc. (CCI) based in South Paris, Maine, has been helping families reach their goal of homeownership through the Mutual Self-Help Housing program since 1993. To date, families have built 237 homes with six more under construction. An additional 35 families have purchased and rehabilitated homes through an innovative approach to the program. CCI’s Self-Help Housing program would not exist without the Section 523 Mutual Self-Help Technical Assistance Grant, commonly referred to as the Self-Help Grant program, funding provided by USDA Rural Development. This two-year grant allows organizations like CCI to provide homeownership opportunities to very low- and low-income families.

The Self-Help Grant program funding is critical in order to hire skilled employees, pay for office and administrative expenses, purchase tools for the families to use during construction, and pay for any training needed to assist the families such as construction and credit counseling.

The Self-Help grant funding can be used to recruit families to participate in the program. CCI does this through radio, newspaper articles, informational meetings, and social media. We have an agency website with a page devoted to the Self-Help program. Our web page includes information about our program, a link to our brochure, and coming soon, an electronically fillable pre-application. If the public does not know that the Self-Help program exists, then there is no program to help the families achieve homeownership.

CCI’s Self-Help Housing program would not exist without the Section 523 Mutual Self-Help Technical Assistance Grant

CCI assists families with obtaining long-term mortgage funding through USDA’s Rural Development agency. USDA Rural Development offers financing with interest rates as low as 1 percent for qualifying families and no down payment. CCI’s Self-Help Group Worker guides the families through the mortgage application process and works with families who need credit counseling.

Training is an important component of the self-help process. CCI used some of its Self-Help Grant program funds for homebuyer education certification training for our Group Worker. This allows the Group Worker to teach families about topics such as mortgages, credit, budgeting, membership agreement and teamwork. The Self-Help Manger and the Site Supervisor also provide pre-construction training about construction safety, basic construction skills, construction contracts, house plans and hands-on tool training. This training typically lasts about
10 weeks.

Other uses of the Section 523 grant funds include the purchase of the power tools used in the construction of the homes and vans to carry the tools between building sites.

After completion of the preconstruction training, the homeowners close on their USDA Rural Development-funded mortgages. The Self-Help Group Worker attends these closings with the families to help with any questions and to be a friendly face in a new situation. Rural Development sets up a supervised bank account to pay for construction materials and related costs. CCI’s Self-Help Bookkeeper assures that construction-related expenses are paid.

Families start construction together under the supervision of the Self-Help Construction Site Supervisor when the lot has been cleared and the foundation has been poured. The Site Supervisor is always on site with the families guiding them and teaching them skills as they go along through the construction process. The families and Site Supervisor work one night a week and both Saturday and Sunday, eight hours each day. The families work through all four seasons. They build through the hot and humid summers, the freezing blowing snow in the winter and everything else in between.

Each month the families meet at the CCI office with the Site Supervisor and the Self-Help Group Worker. They go over any issues that might arise, talk about their progress and what comes next. The Group Worker discusses homeownership issues, such as maintaining a septic system and other house maintenance.

Over the course of construction, the families fill out and sign their weekly time sheets. The Self-Help Bookkeeper keeps track of all the hours to assure that the families are getting their required hours in.

It takes about 10-12 months to complete the six homes. Once the construction is complete, the families, the Site Supervisor, Group Worker and Rural Development employee meet to conduct a final inspection of each individual home. The Rural Development employee completes the final inspection of the homes and the new homeowners receive the keys. There is usually a ceremony congratulating the families on their great accomplishment. The next group of six families also attends the ceremony and the “golden shovel” passes to them to start their journey through the Self-Help program.

The Self-Help Program would not be able to help the families it does without the Section 523 Mutual Self-Help Technical Assistance grant. The grant funding allows CCI to provide a valuable service at no cost to our families. With this funding CCI has a group of technically-educated self-help employees, such as the Group Worker, Bookkeeper, Site Supervisors and Program Manager.

Suzy Huard is the Housing Improvement Services Bookkeeper at Community Concepts, Inc. in South Paris, Maine. CCI offers a variety of housing, economic development and social services for Maine’s communities of Androscoggin and Oxford Counties. CCI’s self-help program also serves Franklin, Cumberland,and Kennebec counties. CCI’s services support both the basic needs of low-income families and promote self-sufficiency.

This story appears in the 2015 Summer Edition of Rural Voices

Discusses personal growth and sustaining the momentum through Self-Help Housing

Affordable housing, specifically self-help housing, is very dear to my heart. This program, or one like it, could have made a difference for my family when I was a young girl. My father’s family is from the Native Village of Port Heiden, a traditional Alutiiq community on the Aleutian Peninsula. When I was born, my first home was a 500 square foot cabin on my paternal grandparents’ homestead in Ninilchik, not far from where I live and work today. While pregnant with my brother, my mom cared for me on her own while my father was away many weeks at a time commercial fishing. We lived a subsistence life, eating fish and game and foraging off the land;
we made do with very little and had no access to transportation. Mom hauled all of the water we used to cook and clean and collected the coal used to heat the cabin from the beach. The cabin had no indoor plumbing or electricity.

My parents divorced when I was young. My mom struggled during this time, sacrificing her most basic needs to keep my brother and me fed and clothed with a roof over our heads. She worked several minimum wage jobs just to make ends meet, but she never complained and we never felt poor. As I grew up, I witnessed my mom’s determination while she worked her way up and out of poverty as a single mother. I learned a great deal from her about perseverance and making do with what you have.

After graduating high school, my first job was a receptionist at a local bank. After two years, I was promoted to a mortgage loan closer. I was with the bank for 15 years. After a difficult divorce, I found myself alone, with no home, no source of income, and two young sons to support. I took a minimum-wage position that brought in just enough to pay the rent and provide basic necessities for my children. I knew there should be better opportunities for someone with my banking and lending background, but jobs in the field were scarce in my rural community, compounded by the 2008 mortgage lending crisis. I was awarded a scholarship through my Alaska Native corporation of Cook Inlet Region, Inc. and put myself through college while working full time and supporting my children. I received my Associates degree in General Business in 2009 and graduated at the top of my class – the first college graduate on either side of my family.

In October of 2009, I applied for a homeownership program coordinator position at Rural Alaska Community Action Corporation (RurAL CAP) in their Self-Help Housing Program. It was exactly the type of position I was looking for. I could apply my mortgage lending experience and education to help make a difference in my community. It was my first job interview in over a decade. Mustering my confidence, I presented my credentials and experience and discussed my passion for helping people in my community. Because of my mortgage lending background, communication skills, compassion and desire to help others, and business education, RurAL CAP felt that I was the best fit for the position and decided to give me a chance.

I feel the self-help housing model is the perfect example of how a family with limited income can achieve homeownership. What I find so compelling about the program is that families are not simply given their home like it’s some kind of an entitlement, which is sometimes the case in rural Alaska. They have to work hard for it. Because of that, the sense of accomplishment they have when they move in is undeniable. They know how to maintain their home. They can afford their home. They have learned new life skills and, most importantly, they have pride in what they have accomplished. This transcends into every other facet of their lives. Self-help housing is not easy, but that is what sets it apart from all other programs.

Self-help is also very rewarding on a personal level. I am making a real difference in my families’ lives. I see defeated people every day as they begin the application process. I see people who have been beaten down and had everything taken from them. It is such a fulfilling experience for me to tell them ‘yes’, when so many times they have heard ‘no’. That simple word, ‘yes’, changes them and that sense of accomplishment is empowering. Their confidence grows when they start to take the steps that make a real change in their lives. I see them looking people in the eye and holding their heads high. I see them taking the chance and applying for that higher paying job. I see how successful their children are becoming in school. I see the tight knit community the families become. It is rewarding knowing that I help my families and my community with the job I do here every day. It is incredibly hard work – for the families as well as for our staff – and the work is incredibly rewarding.

This year RurAL CAP is building its 50th self-help home in the central Kenai Peninsula area. I believe that for self-help to continue to make the impact it does here, marketing and education are key. Many people don’t know this opportunity exists. We must market this program to the families who will benefit so they know it’s available. We need to educate our elected officials. They need to know the benefits of self-help housing, not just to the individual families, but also the community as a whole. This is vital so we can continue receiving the funding for the program.

They know how to maintain their home. They can afford their home. They have learned new life skills and, most importantly, they have pride in what they have accomplished.

Another challenge is recruiting qualified individuals and families. Many applicants have credit and budgeting challenges. Very low- and low-income individuals often do not have the resources needed to overcome these obstacles. They also have no idea where to start and need guidance throughout the process. Unfortunately, the Kenai Peninsula does not have a local credit counseling agency. The nearest one is located 150 miles away in Anchorage. A local credit counseling agency is needed. To assist in recruiting self-help families into the future, it is critical that our young people are taught the skills they need to take care of themselves financially. Our children are largely unprepared for the financial responsibilities of being an adult when they get out on their own. I would like to see personal finance become a core class taught in all of the local high schools covering budgeting, fiscal responsibility, credit, loans, investments, and savings. Well-educated children become well-educated adults and are better able to support themselves and their families. If these personal finance classes were offered a year or two before the families are ready to become homeowners and a local credit counseling agency were available to them, my recruitment numbers would increase dramatically.

For self-help housing to continue for another 50 years, funding must be available to support it. At this time, self-help is dependent upon government funding both to operate it (USDA’s Section 523 Technical Assistance (TA) Grant) and to fund the construction of the individual homes for each homeowner (USDA Rural Development Section 502 Direct loan). Reliance on federal funding is a challenge for several reasons. First, we never know from year-to-year if the funding will be available or how deep the cuts will be in any given year. It’s going to take continued presence on Capitol Hill and communication with our elected officials. Policymakers must be informed about the need for ongoing federal support for this program. This program does and will continue to stimulate housing production in underserved, rural communities where private developers can’t meet the entire demand for affordable homes. They need to see success stories firsthand to understand that this program works and is helping to provide the ongoing need for decent, affordable homeownership in rural America. Second, we must seek alternative ways to model the program to form partnerships with other lenders for the individual construction and permanent loans our families need. There may be a time in the future when the federal funding is severely reduced or is not available. We must address this distinct possibility by having alternate funding sources available when that time comes. To do this, we need to start forming partnerships with housing authorities, technical assistance providers, and local lenders.

The Self-Help Housing program provides a time-tested way for low-income families to achieve the goal of homeownership. It extends tangible resources that these families can use to be successful. It teaches valuable life skills that flow into all other areas of their lives. It gives hope, pride, determination, strength, and accountability. It is my sincere hope that we can continue providing this program in rural America for many years to come.

Mi’shell French is the Homeownership Program Supervisor at the Rural Alaska Community Action Program, Inc (RurAL CAP), a private, statewide, nonprofit organization working to improve the quality of life for low-income Alaskans.