Mutual Self-Help Housing Program Builds Community

On a recent Saturday in Pascoag, Rhode Island, Katheryn Hernandez and her brother Noel were working together to install drywall. Careful to measure twice and cut once, the pair painstakingly marked the opening for the dining room window and fit the panel before cutting, and then finally drove in screws to hold the panel in place. By 11 o’clock, they were making great progress. They had already installed sheetrock in the kitchen, dining room and entry hall of their neighbor’s house.

Drywall installation is a brand new skill for the mother of four who works as a dispatcher for roadside service at the Automobile Club of America. She has already tackled siding and insulation. Laying tile will be next.

“One of my goals was to own my own home by the time I was 30,” said Hernandez. “I’ll be 32 when we all move into our homes, so I’ll at least be close.”

Katheryn Hernandez and her brother add drywall to their neighbor's dining room.

Hernandez is part of a cohort of new homeowners using sweat-equity to buy a home through the USDA Self-Help Housing program. Participants commit to work on their own homes – as well as those of their neighbors – for 35 hours a week for an estimated nine months. They also receive interest rates as low as one percent to cover a portion of the cost of construction. The mortgage payment stays below 30 percent of the participant’s income, which ensures the housing is affordable. 

“This isn’t just a new home they’re building,” said Daynah Williams, director of Homeownership and Asset Building for NeighborWorks Blackstone River Valley Community Development Corporation. “They’re building a community. They have been together for a long time working on a common goal. They help each other and these are relationships that will last a long time.”

The Rhode Island-based NeighborWorks Blackstone River Valley administers the U.S. Department of Agriculture (USDA) Section 523 Mutual Self-Help Housing Program, whereby low-income borrowers work together under the guidance of a nonprofit public housing or community development entity to build each other’s homes. NeighborWorks provides technical assistance including a construction supervisor. They also develop the building site, provide homeownership training, supply the building plans, and help borrowers qualify for a mortgage. The program is available nationwide.

According to Anne Correia, the USDA’s Rhode Island and Southern Massachusetts area director, only one community development corporation in Rhode Island has accessed this program. Massachusetts and Connecticut are not implementing the Mutual Self-Help program at all, and instead focus exclusively on the USDA’s direct lending program to provide subsidized mortgages with zero down-payment requirements.    

The current pace of work could mean Katheryn Hernandez and her four children could be home for the holidays.

“Rhode Island has considerable area that qualifies as ‘rural’ as far as the USDA is concerned,” said Correia. Both the direct lending program and the Mutual Self-Help program are available only in rural communities. In Rhode Island, eligible land includes nearly all of the area west of I-295, and from West Greenwich south to Wakefield and Westerly. There are even portions of Aquidneck Island that are considered rural under the USDA definition.

“The program is very popular in other communities,” said Correia. “In addition to supporting the home-buyer, we also support the non-profit with a technical assistance grant that covers the majority of the cost to administer the program.”

NeighborWorks Blackstone River Valley has built a Mutual Self-Help community in Pascoag, RI, where 30 new homes will be completed. Each house is located on a third of an acre and families can chose their home design, colors and finishes. Hernandez has been working on a 1,440 square-foot saltbox design for her family.

Hernandez had been renting an apartment in Pawtucket where she tried to use a portion of the backyard to grow a tomato plant. “The landlord wouldn’t permit it,” she said, “and it was just the last straw, so I started looking for other options. When I saw this program for homeownership, I was thrilled that I was accepted.”

“I can’t wait to have a garden with tomatoes and zucchini,” said Hernandez. “Have you ever tried a real tomato? It will ruin you for store-bought. The kids want pumpkins. And, I might try growing cornstalks again. I’m so excited about the backyard.”

This fall, members of the third cohort are in the throes of building their homes and hope to move in by the holidays. Two previous groups of “selfies” have moved into their homes. NeighborWorks is currently accepting applications for the last group.

Melba Vega and her husband José Vega stand with their daughter Wendy in front of their new home.

For homebuyers like Melba Vega and her husband José Huertas, the thought of moving in before Christmas is an answer to a prayer. The couple, together with their daughter Wendy, have been looking for an affordable, ADA accessible home for a long time.

“We are so blessed to be able to do this – especially for Wendy,” said Vega. Their daughter was born with cerebral palsy and is confined to a wheelchair. 

Vega, Huertas, Wendy and her dog Oreo, come every weekend to the job site. Vega, who is Wendy’s full-time caregiver, is looking forward to having an accessible shower. “NeighborWorks helped us find the right fixtures for the bathroom. They’ve done everything possible to help us build an accessible home for Wendy.”

Even without factoring in the cost of ADA accommodations, an affordable home in Rhode Island is beyond reach for tens of thousands of Rhode Island families. While the crisis has been intensifying over the past decade, the pandemic made it worse, eliminating most options for renters or homebuyers living on low to moderate incomes. According to the Realtors Association of Rhode Island, year over year cost increases added nearly 15 percent to the price of a home. In August 2021, the median price of single-family homes sold in Rhode Island reached a record $390,000, a 17.1 percent increase.

The Housing Fact Book by HousingWorks RI at Roger Williams University has conducted robust research into housing affordability and its impact on residents since 2005. Now, the list of municipalities where it is affordable to own or rent are at historic lows. In 2020, for the first time since HousingWorks RI started to measure affordability against the state’s median household income, there are no municipalities where a family with the median household income of $67,167 could afford to buy. 

Jeannette Arroyo with her two children Jeremy and Jared, and her boyfriend Gabriel.

The Mutual Self-Help program provides a solution in an untenable market. While homeownership remains the primary driver of wealth creation, many families are priced out that opportunity. The rising prices of building materials on top of zoning restrictions and the wide-spread lack of starter homes have hamstrung families trying to get established.

Jeannette Arroyo wanted a house where she could raise her young family. Arroyo works the night shift as a quality inspector for a medical device company while raising two sons aged 9 and 13. “I wanted a house so I could live in peace. I work nights and sleep during the day, and where I live is quite noisy. I was looking for a situation where I knew my neighbors.”

Arroyo found NeighborWorks through its financial coaching program. “I went to the office to go through their homebuyer’s class and they helped me repair my credit before I applied for a mortgage. The process in total has taken about two years, but given the pandemic, things have moved pretty quickly.” 

Arroyo is optimistic that she and her boys will be able to move in by the holidays. “I have just started hoping for Christmas, but I’m particularly excited about having some privacy,” said Arroyo, “My back yard will be my private sanctuary.”