(Seguin) — As COVID-19 exacerbates the housing crisis in Texas, lumber costs continue to rise, and Texans still recover from Winter Storm Uri, there is a need now more than ever for strengthened and coordinated efforts from nonprofits and the government to address the need for affordable housing. That’s according to Sarah White, community outreach office for Habitat for Humanity Texas.
White says she is pleased to announced that Seguin’s own Guadalupe Valley Habitat for Humanity will receive a Bootstrap Loan for one of its families with the assistance of Habitat for Humanity Texas. White says the Texas Bootstrap Loan Program, also referred to as the Owner-Builder Loan Program, is administered by the Texas Department of Housing and Community Affairs Department (TDHCA) and is designed as a self-help housing construction program. She says it provides an opportunity for low-income families to purchase or refinance property that will then be used to build or repair a home through “sweat equity.”
“Bootstrap funding is one of the state’s most successful, cost-effective programs helping very low-income residents achieve homeownership through “sweat equity. Habitat Texas’ role is to originate the loans for the smaller affiliates. The loan processing is one that can be done on the affiliate level, but these loans require lots more paperwork and more coordination between title companies, attorneys, etc. When we do help an affiliate, the staff still helps Habitat Texas get things signed and track things down.”
We just do all of the filling out of forms and such. Then, we upload documents to Bootstrap’s systems and correct anything that needs to be corrected. It’s lots and lots of detail work, but it frees the affiliate up to not have to mess with them. They get 10 percent of their loan amount in administrative fees after closing from Bootstrap,” said White.
White says this, layered with the COVID-19 pandemic, highlights the struggle of Texans across the state. However, she says for one new family, the Gonzales Family, in Seguin, the dream of building and owning their very own home just became a reality!
According to the TDHCA, as part of this program, 65 percent of the labor necessary for the home must be provided by the homeowner through working with a state-certified NOHP, Nonprofit Owner-Builder Housing Provider, such as Habitat for Humanity. Similarly, Habitat believes in a hand up, not a handout allowing homeowners to build alongside Habitat volunteers.
White says through the combined efforts of Guadalupe Valley Habitat for Humanity’s Housing Ownership Program, Habitat for Humanity Texas’ HabTex Mortgage Services, and the Bootstrap Loan Program, a local family is now a proud homeowner.
Not only does the Bootstrap Loan Program help low-income families and the state government, it also allows the local Habitat affiliate to build more homes and better serve the surrounding communities.
Madeline Zwicke, the executive director for Seguin’s local chapter of Habitat says this program will allow for the group to continue to build affordable homes for low-income families in Guadalupe County. She says donations and fundraising events have been severely impacted this year. She says this funding will help us to continue to move forward and reach our goal of building more homes this year.
For an affiliate to purchase the property and all necessary materials to build a home, it typically costs around $125,000. This money must be raised through donations, ReStore revenue, and support, which is quite a challenge for two homes per year. Therefore, the Bootstrap Loan Program provides resources to the affiliate that can then be used to help more families.
Again for smaller affiliates, like Guadalupe Valley, Habitat for Humanity Texas, the state-level organization, assists with the paperwork through originating the loan. This support comes as a much needed blessing to the local staff by helping expand their capacity.
Zwicke adds that “with the funds obtained through the Bootstrap Loan Program, we will build an additional home this year. This funding will give us the opportunity to build more homes over the next year and serve more families in our community.”
According to the National Low Income Housing Coalition, the average hourly wage required to rent a modest, two-bedroom apartment in Texas is $20.90 an hour, a stark contrast from the state’s minimum hourly wage of $7.25. A single parent making minimum wage in Texas must work a staggering 115 hours a week to afford a two-bedroom apartment.
On top of that, a staggering 1 in 3 Texans live in substandard housing, meaning it is overcrowded, lacks plumbing, or is too expensive, leaving little money for other basic needs.
Since 1993, the GVHFH in Seguin has partnered with more than 30 homeowners to build better lives for themselves and their children by providing decent, affordable housing. In 2014, the non-profit opened the Habitat ReStore – a volunteer-run home improvement store located at 256 W. Court Street. Since the opening of the ReStore, the proceeds have enabled the group to build at least two homes per year for partner families willing to work side-by-side with Habitat volunteers.