Habitat for Humanity changes with economic conditions as it secures future build sites

MISHAWAKA — In time for Christmas, Ryan Durham celebrated her first days in a new house built this fall by Habitat for Humanity of St. Joseph County's Muffet McGraw Women Build program.

On Dec. 20, Durham became the ninth homeowner to move into a Habitat-built house in 2023, with three more yet to become occupied.

While she was building her house earlier this year, she told a WSBT-TV news reporter in August that she was grateful to have the chance to live in her own home — not rent — in a neighborhood.

"I was living in an apartment, to actually to give (my son) a home ," she told the television station. "It's his house as well. It's just priceless."

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Although St. Joseph County's Habitat program plans to build "at least" 15 new homes in 2024, the financial component of the program has undergone changes to ensure the homes it builds remain affordable for people.

Jim Williams, local Habitat president and CEO, said high rental housing costs are putting a strain on what's available for families, and the homes Habitat is building are offering a lifeline for families who want affordable living conditions.

"We have been forced to get creative on finding ways to get people into these houses," Williams said.

He said with an average of a 2-bedroom apartment renting in the county for $1,250 per month, many people with small families cannot easily afford living quarters.

Williams said that to get the Habitat homes in the affordability range, the St. Joseph County agency has changed its funding arrangement for homeowners.

Typically, applicants who become part of the Habitat home project take financial classes, put in a minimum of 250 hours of "sweat equity" in helping to build their home and then receive a zero-percent mortgage loan that they have to pay.

That was when homes were appraised at about $130,000. With appraisals of homes now about doubled, Williams said, Habitat has set up financial assists.

Now, he said, people accepted into the Habitat program do all the things they had to do before, but they also must apply for a mortgage.

"They bring in what they can, but Habitat makes up the difference with grants and a second mortgage," Williams said.

The prospective homeowner usually is expected to pay about $1,000 a month, with grants and other assistance provided by Habitat sources.

"Unlike renting, this homeowner is moving into a brand-new, energy-efficient home that they can afford," Williams said. The house is placed on the property tax rolls and the family becomes part of the neighborhood.

More lots, more homes

Fourteen more Mishawaka home building sites for Habitat for Humanity are being offered as part of the city's commitment to the program.

The Redevelopment Commission earlier this month approved the transfer for the scattered lots the city owns, with many of them having restrictions on who can own them and what types of homes can be built there.

The lots sold to Habitat for $1 are:

● 601 Russell St: 2 lots

● 318 W. Tenth St.: 1 lot

● 218-222 S. Byrkit Ave.: 1 lot

● 925 Queensboro: 2 lots

● 210 W. Ninth St.: 1 lot

● 854, 858 E. Third St., 119-121 S. Merrifield Ave.: 3 lots

● 851-853 E. Third St., 209 S. Merrifield Ave.: 2 lots

● 852, 858 E. Fourth St.: 2 lots

Ken Prince, executive director of planning and community development, said Habitat reached out to the city looking for more build sites. At the same time, the city had been evaluating the number of city lots it had in its inventory.

Some of the lots were acquired and homes were demolished with federal funds, which placed restrictions on them as to what could be done with the properties. Prince said other home sites did not have restrictions, but the ciy was keeping them open for future staging areas for the ongoing storm sewer separation projects that have been taking place in the city over the years.

Williams said the new home lots are good for future house builds. For example, the current large-scale Habitat development at the Fields at Highland subdivision is filling up. There currently are only 17 lots left of some 76 home sites there.

Meanwhile, Habitat also secured four buildable home lots in August from South Bend on Harrison Street to construct four single-family homes in the Near Northwest Neighborhood for sale to owner-occupants. Williams said the group has also secured a fifth site there as well.

The agency will get part of $2.67 million in American Rescue Plan money the city of South Bend has awarded to address the "appraisal gap," a situation when the cost to build a home exceeds its potential sales price because it’s located in an area with lower property values. The gap deters lenders from offering mortgages to home buyers.

"The need for entry-level, affordable housing is great," Williams said. "There are lots of ways we can serve as many people in South Bend and Mishawaka."

Email Tribune staff writer Greg Swiercz at gswiercz@sbtinfo.com.

This article originally appeared on South Bend Tribune: Habitat for Humanity adds building sites for more homes