Proposed funding cuts could cripple Habitat for Humanity
By Rochelle Moore
Published in News on April 26, 2017 10:07 AM
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News-Argus/CASEY MOZINGO
Future homeowner Dalia Ramirez, right, and her sister Dilayla Ramirez move a box of siding supplies at a home being built by Habitat for Humanity at 312 Horseshoe Drive Saturday.
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News-Argus/CASEY MOZINGO
Clint Tittle holds up a tape measure Saturday while volunteering for Habitat for Humanity at a house being built at 312 Horseshoe Drive.
Proposed cuts in President Trump's federal budget could have a crippling effect on Habitat for Humanity's work in helping residents secure affordable housing in Wayne County.
Habitat for Humanity International and its affiliates, including Habitat for Humanity of Goldsboro-Wayne, rely on a variety of funding sources through the U.S. Department of Housing and Urban Development, proposed to be cut by $6.2 billion in 2018.
The Trump administration's budget for programs receiving discretionary funding reflects the president's priorities on national security and public safety, with a $54 billion increase in defense spending and $54 billion in cuts. The cuts include the elimination of several housing-assistance programs.
"If it were to pass in its current form, it would have a pretty devastating effect on Habitats across the country, including here locally," said Matthew Whittle, executive director of Habitat for Humanity of Goldsboro-Wayne. "A significant amount of our funding flows from HUD through various sources. If these federal funds disappear, the people who are going to be truly hurt are those folks who are low to moderate income.
"We recognize that it's a proposed budget and that it's a starting point, so we have our fingers crossed."
Habitat for Humanity of Goldsboro-Wayne received almost $300,000 in grants and loans that originated from HUD during the fiscal 2015-16 year. The elimination of HUD's Home Investment Partnerships Program and Self-Help Homeownership Opportunity Program could cut in half the amount of funding the local Habitat receives to build and offer low-cost mortgages, Whittle said.
"These HUD funds, when you total them up . . . it's just under $287,000 a year, which accounts for approximately half of what we have to spend on construction expenses," Whittle said. "So obviously, if these funds go away, it's going to have a significant impact on our ability to continue building."
During the 2015-16 fiscal year, Habitat for Humanity of Goldsboro-Wayne received $45,000 in Home Investment Partnerships Program, HOME, funds that provided three homeowners with $15,000 each in downpayment assistance.
Habitat received another $57,800 in HOME grant funding, which provided reimbursements for construction costs associated with two to three houses, Whittle said. Habitat also received $44,500 in Self-Help Homeownership Opportunity Program funding, which provided grants to help pay for land and develop infrastructure for Habitat homes.
Habitat also received another $140,000 from the N.C. Housing Finance Agency, which originated from HUD, and offered several $35,000, zero-percent interest loans to homeowners, which helped reduce mortgage costs. The funding also helped with the costs of adding energy efficient equipment to the homes.
There are other programs and funding sources that could be cut in the federal budget, including the U.S. Department of Agriculture, which offers low-interest loans for houses built in rural Wayne County, and the AmeriCorps program, which can provide a source of labor for Habitat.
While the federal funding does not financially support Habitat, it does provide several options that help people achieve home ownership, Whittle said. The federal dollars also leverage other funding sources locally.
"HUD doesn't support Habitat, but what it does is it allows us to leverage our private donations, our corporate donations and our grants that we receive," Whittle said. "Any federal dollars that come in, that money is reinvested back into the community through property taxes that the homeowners pay and through our construction spending."
The funding is considered essential to Habitat's home building efforts because every dollar or public funding is able to generate and leverage nearly four dollars in private contributions from individuals, churches, corporations and foundations, according to Habitat for Humanity of North Carolina.
In 2016, Habitat affiliates across the state received more than $8.7 million in HOME funds, with the majority providing zero-percent interest mortgage financing to 220 homes. Habitat affiliates also received another $1.2 million in HUD funding that allowed for the addition of infrastructure to several projects.
The elimination of the federal programs would worsen the plight of the poor and lead to the loss of Home ownership opportunities for very low-income families, said Greg Kirkpatrick, president and executive director of Habitat for Humanity of N.C.
"The affordable housing crisis in most of North Carolina will grow ever worse, and, without new sources of funding, that continuing affordability crisis will result in a further eroding of the quality of housing stock in the state," Kirkpatrick said.
Habitat for Humanity International is a global, nonprofit housing organization that believes housing is foundational to reducing poverty and achieving lasting economic growth.
Since 2001, Habitat for Humanity of Goldsboro-Wayne has partnered with families in the construction of more than 70 homes, most within the city of Goldsboro.
Each year, Habitat and future homeowners, which contribute at least 300 sweat equity hours during construction, build five houses in Wayne County. Eligible homeowners enter into 30-year, zero percent interest mortgage and end up paying between $450 and $550 per month on a mortgage. The fair market value of Habitat homes in Wayne County is about $109,000, but the total that is financed is lower, due to the housing-assistance programs, Whittle said.
Habitat for Humanity of Goldsboro-Wayne spent $431,476 on the construction of five homes and one rehabilitation project, in 2015-16. During the year, Habitat received $68,233 in local contributions and more than 1,330 volunteers contributed nearly 17,000 hours to local projects.
Since 2001, the 70 Habitat houses built in the community have provided $557,000 in local property taxes.
"We always tell people, we don't give away homes," Whittle said. "We give opportunities, and we give folks opportunity to build a better future for themselves on a new foundation of strength, stability and self-reliance through affordable shelter, and that's what these federal funds help us to do."