Habitat breaks the mold: offers affordable homeownership despite rising costs
Yes, Greater Springfield Habitat for Humanity (GSHFH) builds houses. But, there’s so much more to the nonprofit organization. Simply put, Greater Springfield Habitat offers the limited-income population of Hampden County an opportunity to create better lives and generational wealth for their families. GSHFH operates using a three-pronged approach as a construction company, social service agency, and mortgage provider. In fact, Greater Springfield Habitat’s construction projects are built despite the rise of inflation, financial challenges, and monetary losses wreaked on the organization.
GSHFH primarily constructs three- and four-bedroom single-family homes that measure 1,466 and 1,646 square feet. When configuring the family’s repayment ability, Habitat uses a formula that is not to exceed 42% total debt-to-income ratio. In many cases, GSHFH homebuyers pay $850 to $900/month, which includes principal and escrow. Habitat does not require a down payment. Instead, Habitat requires its potential homebuyers to help build their home and others. Better known as “sweat equity,” future homeowners participate in 300 to 500 hours of volunteering alongside Habitat staff and volunteers.
Juan Gonzalez said just before he and his wife showed up to the January closing of his new home in Holyoke, he ran the numbers one last time to make sure the home was within their financial means. Looking over the math, he was worried. Unnecessarily so. Juan forgot the loan was interest-free. When he heard that he exhaled a big breath and said, “Disregard my math. Thank you, Lord. This home is more affordable.”
“Habitat made the process easy and with a no-interest loan in this economy, we couldn’t have asked for anything better,” said Karina Dise, Habitat homeowner in Monson, who with her husband, purchased their home in November 2007. “We are blessed to own a house and have land that goes with it. We can enjoy the outside when the weather is nice and we don’t have to hear our noisy neighbors who used to live right next door to us. My husband likes to grill outside too, so that’s definitely a plus.”
For comparison, purchasing a similar house in Greater Springfield without the assistance of Habitat, could cost a homebuyer upwards of $1,700/month with principal and escrow. Homebuyers will also be responsible for a down payment or accepting private mortgage insurance costs. According to the United States Department of Housing and Urban Development’s 2023 Fair Market Rent Documentation System, a three-bedroom apartment may cost $1,497/month and a four-bedroom rental can be $1,799.
Neither option is doable for a family that struggles to pay its bills or can’t move beyond their status in life. Greater Springfield Habitat realizes everyone deserves simple, decent, affordable housing. Period. Habitat aims to close the racial wealth disparities by providing subsidies and affordable mortgages to help families break the cycle.
“We had debt, we cleaned it up and went to the bank to see if we qualified for a mortgage. We were told we didn’t have enough money,” said Lori Holt, who with her husband purchased a Springfield Habitat home in May 2014. “Our daughter told us about Habitat and encouraged us to apply. I didn’t think we had a chance.”
Eventually, Lori and her husband applied and were accepted. “It was such a blessing for us,” Lori said. The couple has five children, four of whom are now adults. “We pay for mortgage what a lot of people pay for rent. Habitat helped our family a lot.”
Kim Rivera, who experienced homelessness, on and off since her 18th birthday before owning a Habitat home, said she appreciates what Habitat has done for her. Kim purchased her home in December 2009.
“Habitat gave people like me the ability to get the American dream. I have stability. My children and grandchildren have a safe haven,” Kim said. “I’m never selling this house. I’m going to keep it in the family. I want other generations to know they won’t be homeless. I have three kids and they’ve all seen the benefits of having a home.”
Studies have shown children of limited-income homeowners are 11% more likely to graduate from high school and are 4.5% more likely to complete post-secondary education than children of low-income renters, said Aimee Giroux, GSHFH executive director.
Since its inception in 1987, GSHFH has constructed 74 homes throughout Hampden County.
Habitat chooses its families based on need. In many instances, a family’s current living situation is less than ideal with issues of rodents, limited electricity, no heat, and/or the apartment is in a dangerous location. For many families, gunfire, drugs, and vandalism are frequent. Families who face these realities often have challenges breaking the cycle for their children.
To ensure selected families understand the “hand up” versus a “hand out” ideology, prospective homebuyers must also attend first-time homebuyer and one-on-one financial literacy classes.
To keep the mission moving forward, GSHFH relies on funding and donations. The majority of money comes from home sales, grants, municipal support, and mortgage and repair loan payments.
To make a donation to Greater Springfield Habitat for Humanity and keep the mission moving forward, text BUILD413 to 44-321.