Like the help and encouragement we get from our family, friends, and the many people that support the Tippie College of Business, Habitat homes are a hand-up, not a hand-out.
All Habitat partner families put in 250 hours of sweat equity per adult to build their home and the homes of other Habitat families. This sweat equity, or volunteer hours, substitutes for a cash down payment. Sweat equity vests the partner families in the project and has them work shoulder-to-shoulder with community volunteers to build their home. The families gain self-reliance, increase their self-esteem, and learn new skills as a result of the sweat equity as well. This is why Habitat is a hand-up, rather than a hand-out.
When the home is completed, the family will buy the home from Habitat using a 25-year, no-profit, 0% interest mortgage. The first mortgage is equal to the cost of the home. Habitat retains the right of first refusal for the first seven years of home ownership; if the family has to move for some reason, Habitat will buy back the home for the amount the family has paid on their mortgage. This first mortgage prevents quick sales or profits being made. All homes have a second mortgage equal to the equity in the home. This second mortgage is forgiven after the 14th year.