SCHabitat.org: Homeowership: Selection Criteria: Ability to Pay

This couple receives credit counseling to work out a payment plan for old debts. They will re-apply for a Habitat house next year.
(Steffan Hacker/HFHI)

Habitat homeowners are responsible for a modest mortgage on their homes. Please visit our habitathomeowner.com website to determine if you might meet our financial criteria. Please note this website will not guarantee that you meet our financial criteria.

The following information will help you understand how we calculate your ability to pay.

Income
Determination of Ability to Pay requires that the total gross household income (the amount before taxes or other deductions) must fall within the posted range. Income includes wages, SS, disability, SSI, food stamps, TANF and court-ordered child support.

Family Size	Monthly Range	Yearly Range
Year 2008 Guidelines
One	$1,730 to $2,500	$20,750 to $29,800
Two	$1,730 to $2,850	$20,750 to $34,100
Three	$1,730 to $3,200	$20,750 to $38,350
Four	$1,730 to $3,550	$20,750 to $42,600
Five	$1,730 to $3,850	$20,750 to $46,050
Six	$1,730 to $4,100	$20,750 to $49,450
Seven	$1,730 to $4,400	$20,750 to $52,850
Eight	$1,730 to $4,700	$20,750 to $56,250

Calculate Earnings
If you are paid an hourly wage, to calculate your annual earnings, multiply your hourly rate by the number of hours you typically work each week (do not include overtime). Then multiply by 52 to calculate your yearly income and divide this number by 12 to determine your gross monthly wages. If you are paid every two weeks, do not just multiply that number by two to calculate your monthly income.

Credit
SCHFH strongly encourages anyone who is considering applying for homeownership to begin to reduce their debt. We do not expect a perfect credit history, but we cannot accept applicants who have debts (such as collections or judgments) that could be turned into liens against real estate property. We also need some evidence that you are currently making regular and timely payments according to the schedules set up with your creditors. We strongly recommend that you check your credit reports several months before applying so that you will have time to clean up any errors on them. (Please see the Important Links page under the Homeownership menu to find contact information for the three credit reporting bureaus.)

If your debts seem unmanageable, we urge you to call Consumer Credit Counseling Service . CCCS will not only help you clean up your credit, they may be able to help you reduce the total amount you need to pay. (Please see the Important Links page under the Homeownership menu to find contact information for Consumer Credit Counseling.)

Debt-to-Income Ratio
Your debt-to-income ratio cannot exceed 50%. We add up all of your monthly payments, including your estimated Habitat mortgage and basic utilities. We divide that amount by the total of your gross monthly income (before taxes or other payroll deductions) to find your debt-to-income ratio.

Note: Applicants often fail to report their debt accurately on their applications. When we calculate your debt, we include everything listed on your credit report. If your report shows that you are a co-signer on a loan or have any joint accounts, be aware that you are legally responsible for those debts. Even if the other person is paying as agreed, we will include these accounts when we calculate your total debt.