BrandonTimes: Will work for home equity

Will work for home equity

Families exchange labor for a down payment on a house. The USDA subsidizes the mortgage.

By JANET ZINK
© St. Petersburg Times
published February 21, 2003

[Times photos: Skip O’Rourke]
Kim McKamey-McCullers sweeps up at a Homes for Hillsborough house that her sister will move into. Home buyers, their friends and families work off the down payment by helping build the house. This house is in the Summerview Oaks subdivision off U.S. 301 just north of Big Bend Road.

SUMMERFIELD -- It's a gray Saturday morning when most people who've worked a full 40-hour week are lazily sipping coffee or happily spending their hard-earned cash.

But Kathy McKamey, a music teacher at Wimauma Elementary School, is pushing a broom, stomping a shovel into dirt and working up a sweat to help build her new home.

She's one of a group of families buying a house in Summerview Oaks through the nonprofit Homes for Hillsborough, which helps people earning less than 80 percent of the area median income buy a house by exchanging labor for a down payment. The homes are built in rural areas using mortgages from the U.S. Department of Agriculture.

"For years I've wanted to purchase a house, but I just couldn't do it," McKamey says. "My income-to-debt ratio was out of whack."

When the county's median income level rose but her teacher's salary didn't, McKamey found she qualified for a loan through Homes for Hillsborough.

The program is funded by annual grants of about $240,000 from the U.S. Department of Agriculture and $135,000 from Hillsborough County.

Groups of six to eight families work together on each other's houses. Each family must contribute 600 hours of labor, and no one moves into their home until everyone has put in their hours and every home is complete.

"They trade sweat equity in place of a down payment," says Earl Pfeiffer, executive director of Homes for Hillsborough, which serves as general contractor for the projects.

Professional construction crews do most of the work. They pour the slabs, build the frames, install the plumbing and electricity and put on the roofs. The families lay sod, pick up nails, sweep away sawdust, and paint both exterior and interior walls.

Elementary school music teacher Kathy McKamey hauls away concrete from the front of her home under construction in the Summerview Oaks subdivision.

Family construction coordinator Jesse Ornelas, who bought a house through the program two years ago, organizes the weekend work crews.

"When a family comes in and puts some effort into it, it shows in the house," says Ornelas. In his estimation, the Homes for Hillsborough residences in Summerfield Crossings are on par with those produced elsewhere in the community by national home builder Lennar Corp.

Homes for Hillsborough, whose offices are in Ruskin, was formed in 1993 and started building houses in the southern portion of the county in 1997. So far, 104 homes have been completed or are under construction in five locations in Ruskin, Wimauma and Summerfield.

Homes at Summerview Oaks, on U.S. 301 just north of Big Bend Road, cost from $79,000 to $89,999 to build. They range from a two-bedroom, 1,161-square-foot home to a four-bedroom home with 1,589 square feet of living space.

To qualify for the program, applicants must be first-time home buyers or have not owned a home for three years, earn at least $16,000 a year, have at least two years in the same line of work and good credit.

The county waives about $2,000 in impact fees as long as the residents live in the house for seven years. The same goes with closing costs, which can be as much as $12,000. Half of the closing costs are forgiven after five years, and the other half is forgiven after 15 years.

Mortgages, financed by the Department of Agriculture, are subsidized based on the family's income.

"The bottom line is, because of the subsidies, families end up with mortgage payments as low as $425 a month," Pfeiffer says. "That allows somebody that makes about $7.50 an hour to qualify for a home. That's the magic in this that really makes it work. That financing."

The program, founded more than 20 years ago by the USDA to help farmers build homes, has received continued support despite changes in administrations.

Last year, the USDA awarded about $7.5-million to 49 nonprofits in 28 states. In addition to Homes for Hillsborough, the USDA funds programs in Crystal River and Apopka.

"Federal government has taken a position that this program is an empowerment program as opposed to a handout. It lets people use their own hands to change their destiny," Pfeiffer says.

Ida Luera, 33, moved into her four-bedroom Ruskin home the day after Thanksgiving with her children Stephanie, 7; Genaro, 12; and David, 13.

She stumbled upon the program four years ago when she was driving around, looking for a place to live so that she and her children could move out of the mobile home she shared with her father and stepmother.

She called Homes for Hillsborough and applied, but was turned down. Her divorce from her husband of nearly eight years was not yet complete, she had credit problems and child care issues. Three years later, she had resolved those problems and applied again.

Luera was earning $10.50 an hour in her job at the Hillsborough County Tax Collector's Office when Homes for Hillsborough approved her loan.

Then, the hard work began.

"We did a lot of painting, we did caulking, we did a lot of construction cleanup and some landscaping," Luera says. "When you work a full-time job and you've got three kids and you have to come here it's very exhausting. It was a lot of work."

In addition to working on their homes, the families helped build a community playground.

"My kids saw the house from start to finish and they were probably more excited than I was to get the house," Luera says. "We drove by every day."

Now, they each have their own bedrooms and neighbors that they share a special bond with.

"We're all working toward a common goal," says McKamey, as she leans against a broom. "Home ownership."

Ida Luera, center, did a lot of painting and caulking on her house in Ruskin. Here she’s surrounded by her children Genaro, 12, left, David, 13, and Stephanie, 7.