No one should live paycheck to paycheck just to have a roof over their heads or choose between food and electricity.
“Extreme poverty anywhere is a threat to human security everywhere.” — Kofi Annan, Seventh Secretary-General of the United Nations
While American families currently struggle with finances from being in a pandemic, many have been struggling long before now. These Americans often must decide between feeding their family for the week or paying the rent. It is now in fact common to work multiple jobs just to still live paycheck to paycheck.
Most home development companies will say that they are making affordable homes, but many are asking affordable for who? These companies put profit first before the people who need the homes. Some take advantage of the incentives that are provided to help make affordable new homes. The most common method used is making a large community and only turning the minimum percentage of units into low-income housing. They will then use the rest for luxury or high-income units. We have seen communities with 100 units only have 5 units designated for low-income families. This becomes a problem for many Americans because they may only be able to afford or get qualified for those low-income units.
The Current Solution
There are programs today offering help to get a home, but many have restrictions and long waiting lists such as Section 8. These types of programs may not offer the best living conditions, and most will not help you to own your home. There are also programs such as the First Time Home Buyers Assistance (FHA). This can be a good choice since they can provide junior loans to help with the down payment, but it also has its downsides. When you use the FHA and do not have at least 20% of the purchase price the lender will add something called Private Mortgage Insurance (PMI). PMI is insurance that the lender makes you pay just in case you default on your mortgage. It does not protect you from losing your home. Another downside to FHA is the interest rate will normally be higher than if you chose a conventional loan. In some states depending on the program, you use you may not be able to refinance until you pay off the junior loan which can be tens of thousands of dollars.
We want to take a different approach on becoming a homeowner making it easy and less expensive overall. Our approach is to have a hybrid system of a Co-op and a traditional mortgage. The land that the homes would be on is purchased all together and each family would get a share to live in their homes. One low payment a month that would cover the cost of your home and all utilities. By sharing the cost of building and sustaining the community we lower the monthly payment per family. Part of the savings can then be used to help expand and create more communities.