Qualifying for Homeownership

Future homebuyers must meet the following criteria:

1.    Live and/or Work in Fluvanna County

If you do not live or work in Fluvanna County, you should contact the Habitat for Humanity in the county of Virginia that you currently live.

2.    Be in need better housing

Potential homebuyers may currently live in overcrowded conditions or in a home that is poorly built, unhealthy, or damaged. Or, they may be experiencing housing instability, or have rent payments that are not affordable.

3.    Willing to partner with Fluvanna Habitat

Habitat homebuyers must be willing to put in 100 hours of “sweat equity” per adult by participating in some aspect of the homebuilding process. Individuals with disabilities or otherwise unable to physically help in the homebuilding process are offered other volunteer opportunities to fulfill these requirements. Sweat equity hours include meetings or classes in personal finances, home maintenance, community conversations and other activities that help ensure long-term stability and success. Habitat’s path to homeownership is an important and in-depth process, requiring hard work, time, and dedication. This dedication helps to ensure the long-term success of Habitat homeowners.

4.    Be able to pay an affordable monthly mortgage

Because homebuyers purchase a home from Habitat, they must be able to demonstrate that they can pay a monthly mortgage payment. Unlike rent payments, monthly mortgage payments go towards full ownership of a home. We partner with individuals and families throughout the homebuyer process to mentor them in improving their overall financial health and developing appropriate repayment plans that will help them pay off existing debts. Habitat works with future homebuyers who may need to improve their credit scores.

5.    Pass a background check

Each adult applying for a Habitat home must pass both a criminal and sexual offender background check.

6.    Meet income requirements

Habitat targets families that fall in the annual income range of $32,982 and $56,000, which is 50%-80% of
Fluvanna County’s median income. We will work with all applicants individually.

What in my Credit Report would cause me to be disqualified from becoming a future homeowner with Fluvanna Habitat?

Fluvanna Habitat for Humanity must follow USDA and Habitat approved guidelines when approving future
homeowners. Per guidelines, we cannot approve a mortgage application if your credit report contains one
or more of the following:

  • A foreclosure completed within the last 5 years
  • An IRS tax lien or other tax liens if no payment arrangements have been made
  • Debts, collections, judgements or write offs if no payment arrangements been made
  • Chapter 7 bankruptcy discharged within the last 5 years
  • If you have not successfully completed required Chapter 13 requirements within the last 12 months

 

Indicators of Unacceptable Credit:

  • Little or no credit history. The lack of credit history on the credit report may be mitigated if the applicant can document a willingness to pay recurring debts through other acceptable means such as third-party verifications or canceled checks. Due to impartiality issues, third party verifications from relatives of household members are not permissible.
  • Payments on any installment account, on a per account basis, where the amount of the delinquency exceeded one installment for more than 30 days within the last 12 months.
  • Payments on any revolving account, on a per account basis, which was delinquent for more than 30 days on two or more occasions within the last 12 months.
  • A foreclosure that has been completed within the last 36 months.
  • An outstanding Internal Revenue Service (IRS) tax lien or any other outstanding tax liens with no satisfactory arrangement for payment.
  • Two or more rent or mortgage payments paid 30 or more days late within the last 2 years. If the applicant has experienced no other credit problems in the past 2 years, only 1 year of rent history will be evaluated.  This requirement may be waived if the program loan will reduce shelter costs significantly and contribute to improved repayment ability.
  • Outstanding collection accounts with a record of irregular payments with no satisfactory arrangements for repayment, or collection accounts that were paid in full within the last 6 months, unless the applicant had been making regular payments previously.
  • Non-Agency debts written off within the last 36 months, unless the debt was paid in full at least 12 months ago.
  • Agency debts that were debt settled within the past 36 months or are being considered for debt settlement.
  • Delinquency on a federal debt.
  • A court-created or court-affirmed obligation or judgment caused by nonpayment that is currently outstanding or has been outstanding within the last 12 months, except:
    ◊ A bankruptcy in which:
    ◊ Debts were discharged more than 36 months prior to the date of application; or
    ◊ Where an applicant successfully completed a bankruptcy debt restructuring plan and has
    demonstrated a willingness to meet obligations when due for the 12 months prior to the date of
    application.
    ◊ A judgment satisfied more than 12 months before the date of application.

An applicant with an outstanding judgment obtained by the United States in a Federal court, other than the United States Tax Court, is not eligible for a Section 502 loan. This requirement is statutory and cannot be waived.

 

Additional Information on Credit Scores – and how we help our family partners/future homeowners

Fluvanna Habitat for Humanity has partnered with the USDA 502 program that pays Habitat back for all house expenses when a home is sold. That helps us with the funds needed to build our next home. Homeowners pay their monthly mortgage payment directly to USDA. To partner with Fluvanna Habitat and USDA, each homeowner must pre-qualify for the monthly mortgage they will be expected to pay. A credit score of 640 or higher is required. We are willing and able to work with families that want to increase their credit score. We utilize our financial education courses along with budget and financial counseling to help our future homeowners. Sometimes, this process takes a short time and sometimes it could take several years to accomplish depending on your individual financial situation. Once a future homeowner has reached the credit score goal, they qualify to purchase a Fluvanna Habitat home.

 

Additional Resources 

Fluvanna County Habitat for Humanity realizes that it cannot help all people in all situations.  Here are some links that you may find helpful if you realize you do not qualify for a Habitat house:

Fluvanna County Social Services

Virginia Department of Health

United Way Thomas Jefferson Area

United Way Quick Reference Resource Guide