Habitat selection criteria

Program Summary

The Habitat homeownership program offers a hand up, not a hand out. As a nonprofit, Habitat for Humanity relies on the support of our local community. Our goal is to provide affordable housing for low-income homebuyers who would not otherwise be able to afford homeownership or a home loan.

To Qualify

Residency requirements:

Applicants must be living or working in our service area (Lincoln, Minnehaha or Turner County) for the 12 months preceding the application drive. Applicants must be a U.S. citizen or permanent legal resident.

All applicants who meet the above residency requirements are screened for our program based on the three criteria outlined below. Applicants must meet the requirements for all three criteria in order to qualify.

1 – Need

Applicants must have a housing need — current housing has one or more of these issues: inadequate, crowded, substandard, inaccessible, temporary, transitional, unaffordable, subsidized, or applicant cannot qualify for a traditional mortgage loan.

Applicants must also have a financial need — annual gross household income must not exceed 60% of area median income for general eligibility and must not exceed 80% of area median income for special eligibility.

In 2021, special eligibility income guidelines apply to:

• veterans/military
• first responders
• frontline healthcare workers

For special eligibility descriptions and requirements, or for general information about Habitat’s income guidelines, refer to the 2021 Income Guidelines.

2021 Income Guidelines

2 – Ability to Pay

The applicant and co-applicant (if any) become the borrowers on the loan and the owners of the Habitat home. Applicant(s) must demonstrate ability to pay an affordable mortgage loan:

• Steady, reliable and verifiable source(s) of income. The income should be expected to continue for at least 3 years. SNAP income is not counted into income calculations.
• A credit history or verifiable payment history showing minimal late payments within the past 2 years. (If the applicant has a credit score, it must be 580 or higher).
• No more than $3,000 total in outstanding past-due debt (collections, judgments or county liens), as the entire balance of these past-due debts must be paid in full before purchasing the Habitat home.
• Bankruptcy needs to be discharged a minimum of 2 years with good payment history since bankruptcy discharge.

3 – Willingness to Partner

Homebuyer partners must sign a partnership agreement. Requirements of partnership include, but are not limited to:

• Complete a minimum of 300 sweat equity hours. Household members age 16 and older can contribute toward the sweat equity hours.
• Complete a series of homebuyer education classes and workshops.
• Maintain or improve financial situation throughout the course of partnership, and meet a $1,500 savings goal.
• Purchase a Habitat home and make regular monthly mortgage payments for the entire loan term (maximum term is 30 years). Habitat homeowner mortgage payments go into our Fund for Humanity to help Habitat build more homes. Habitat homeowners pay it forward by helping to fund affordable housing for future applicants!

How Many Applicants Are Selected?

The number of applicants selected is based on the number of homes Habitat intends to build for the next construction season.  We typically have more qualified applicants than we have openings.  If you qualify but are not selected, you can apply again. Each application drive is a new opportunity for all applicants.

Habitat does not discriminate on the basis of race, sex, color, age, handicap, religion, family status, national origin, or income derived from public assistance programs.