This article first appeared in the St. Louis Beacon, July 29, 2011 - For the first time in its 25-year history, Habitat for Humanity St. Louis has new homes waiting for qualified buyers.
Habitat is usually overwhelmed with applications for the 20 to 30 houses it builds in a year, said Avis Laden, the organization's family selection and support manager. In a normal year, the nonprofit will begin accepting applications in January and cut off the process when the waiting list reaches 1,000 -- about mid-February.
This year, there is no waiting list, and as the organization prepares to dedicate seven new houses Saturday in the JeffVanderLou neighborhood, two homes are still for sale. Laden is looking for buyers for those houses and also for a new 12-home project in Old North.
"In 25 years, we have never experienced this,'' she said.
The need for Habitat homes has not declined, but the lack of buyers is a product of two economic realities: limited employment opportunities for prospective homeowners and tighter qualifications for loan applicants.
Laden said that would-be applicants most often cite job loss -- or insecurity about their current employment -- as reasons they don't even apply to the program.
"People are just trying to put food on the table," she said.
Habitat -- an international nonprofit ecumenical housing ministry -- has built more than 300 homes in the St. Louis area in the past 25 years, with corporate sponsors, volunteers and families working side by side at construction sites. In recent years, Habitat has focused on producing energy-efficient and environmentally friendly houses certified by the U.S. Green Building Council.
The latest crop of homes in the 3000 block of Thomas Street are one- or two-story homes of a contemporary design. During a tour of a four-bedroom ranch-style home that will be ready in mid-August, Laden stressed its energy-efficient design and appliances. Even during the peak heating and cooling months, homeowners can expect utility bills of less than $50 a month, she said.
The home, priced at about $138,000, comes with a zero-interest loan and 10-year city tax abatement. The monthly mortgage would be just over $400.
"It is cheaper than most people pay in rent,'' she said.
In an effort to ensure the success of its homeowners during this period of high unemployment and foreclosures, Habitat tightened its qualifications earlier this year, Laden said. Minimum levels of income are higher and debt-to-income ratios are lower.
"There is still a major demand, but we don't want to give these people the American Dream temporarily,'' she added. "We want them to be successful long-term."
Homebuyers must provide evidence of a stable income and a good credit score -- and be able to make two mortgage payments as a down payment.
Income may not include unemployment benefits, food stamps, temporary assistance, temporary employment income and Supplemental Security Income for dependents.
The organization expected the tighter rules to decrease its applicant pool, but Laden said she didn't expect the numbers to drop as much as they have.
In the meantime, Habitat is providing some new resources to help families prepare for the application process. Because unemployment and a bad credit history go hand in hand, the organization is partnering with a local nonprofit credit counseling agency to help low-income families improve poor credit scores, which are sometimes due to previous foreclosures.
"So many people have been foreclosed on, they need a second chance,'' Laden said.
She is also looking for new venues to meet potential Habitat homebuyers, including area businesses and companies that employ low-income workers.
Once they are accepted into the Habitat program, homebuyers must attend workshops on finance and budgeting, and each family is required to contribute 350 hours of "sweat equity" to the construction process.
Requirements for homeownership, including income guidelines, are detailed on the Habitat website.
