On Wednesday, November 22 Kauai’s Habitat for Humanity held a ceremony for six families who received keys at the Kauai Waimea Huakai Subdivision thanks in part to USDA Rural Development’s 502 Direct Loan program for two of the homes and the 502 Guaranteed Loan program funded six additional homes for a total of eight new homes.
The families are required to invest in sweat equity of 30 hours per week, over about an eight-to-nine-month period, not counting weather delays. All of the six families exceeded this minimum requirement and invested sweat equity ranging from 1,300 hours to over 1,700 hours.
According to Chris J. Kanazawa, State Director Hawaii, American Samoa, Western Pacific, the process of building the homes is truly a group effort. “Self Help projects like the Kauai Waimea Huakai Subdivision isn’t just about building homes. These projects are about building a community. The project requires leadership from Kauai Habitat and brings together the families, contractors, volunteers, financial institutions and title companies, and local and state governments.”
USDA Rural Development Hawaii/Western Pacific Housing Director Cynthia Jackson said it’s vitally important to have USDA RD involved in the funding process for home construction in Kauai. “Affordable housing on Kauai is very scarce and so with our no down payment policy and our subsidized interest rates (for some) it’s the only option for some people to own their own home.”
As for the new homeowners, having a hands-on experience in building their own home is not only a satisfying endeavor, it also greatly reduces the cost for a new home. “Sweat equity is the biggest benefit for new homeowners building their homes through the self-help method. When the families move into their homes they can have around 15 percent equity, on average, that means the family starts building wealth right away and can have opportunities that they would not have otherwise,” added Jackson.
Kauai’s Habitat for Humanity Executive Director Milani Pimental said that USDA Rural Developments involvement is vital to their mission of provided access to affordable housing in Kauai. “For Kauai Habitat for Humanity, it has been critical to have the partnership with USDA RD as its been key to our process in scaling up our efforts to meet the affordable housing need here on the island. The availability of the USDA 502 Guaranteed Loan has been a significant help for our homebuyers as well as the availability of the USDA 502 Direct loan and the USDA 523 Technical Assistance grant, we are able to utilize at certain times.
As for the hands-on experience in building their own home, Pimental said it really is satisfying to be a part of the building process. “As an affordable homeowner myself through mutual self-help housing, I know first-hand that you can get a deeper pride of ownership through the hands-on experience in building. In seeing our current group of newest homeowners commit to their sweat equity during the course of their group build, I saw not only the excitement in their eyes, but also the confidence building week by week, and through the months of the build, she said.
“Just today when the Piimanu family picked up the keys to their home when their home purchase recorded, Keala Piimanu said to me, “I never really used tools before and now we’re thinking about which tools we should buy for ourselves first!” Many of our homebuyers develop a great proficiency with power tools, gain enough knowledge of building to make some repairs if needed, or build things like tables and benches, and another few have overcome fear of heights,” Pimental added.
According to Pimental, the opportunity to build homes through Habitat for Humanity is a fantastic alternative in Kauai. “The opportunity to build homes through Kauai Habitat for Humanity compared with the general housing market on Kauai is a huge benefit. Because Kauai Habitat is able to partner with lenders to provide an affordable mortgage, our organization is in turn able to enable the construction of a home that is truly affordable, and well below current market rates.
As for Pimental, she and her staff get to know the homeowners and have built strong connections with Rural Development as well. “Our staff always enjoys working with our homebuyers throughout their journey and wish them much success in the future. We also enjoy working with our USDA RD staff on Kauai and across the State and thank them for their tireless efforts of enabling affordable home opportunities for our homebuyers,” Pimental concluded.