Habitat Homeownership
Program Guidelines for Applicants

Habitat for Humanity of Northern Arizona provides qualifying households the opportunity to purchase a home through an affordable mortgage.

When you submit a pre-qualification survey, we are confirming your household meets our basic program guidelines. The main areas we review are income, credit, U.S. legal residency, and confirming you are a first-time homebuyer. The below information will give you a clearer picture of what we are looking for.

Income

Habitat’s affordable homeownership program is for households earning between 50% and 80% of the Area Median Income (AMI).

Income Documentation

You will need to submit proof of income, so we may calculate your annual household income. 

Income Limits

These charts show the current minimum and maximum gross annual income separated by household size for our program. These numbers typically change every year and are set by the U.S. Department of Housing and Urban Development based on cost of living. 

Credit

We review the credit of the applicant and co-applicant (titleholders) to make sure you have a history of making payments on time and keeping up with obligations. This shows us you are likely ready for the responsibility of homeownership. We do not have a minimum credit score; however, we are looking to make sure there are no major issues on your report. Our credit review is very detailed, but some basic items to note are:

  • No foreclosures or bankruptcies in the last three years. We are looking at the date of discharge for the bankruptcy.

  • No open collections, profit and losses, judgements, or liens. Any of these - no matter how small – must be cleared before you can move forward.

  • We do not allow more than two late payments in total in the previous 12 months.

  • Maximum debt-to-income ratio of personal reoccurring debt of 8%. Habitat’s program has a maximum debt-to-income ratio of 43% and assumes your monthly housing costs to be 35% (the maximum allowed by the program), leaving just 8% of your income that can be used toward monthly debt (student loans, credit cards, auto loans, etc.).

Proof of U.S. Legal Residency

All applicant(s) whose name will be on the title must show proof of legal U.S. residency and at least one applicant must show proof of permanent legal U.S. residency. 

First Time Homebuyer

To qualify for our homeownership program, you must be a first-time homebuyer using HUD’s definition. Generally, a first-time homebuyer is someone who meets any of the following requirements:

  • An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers).

  • A single parent who has only owned with a former spouse while married.

  • An individual who is a displaced homemaker and has only owned with a spouse.

  • An individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations.

  • An individual who has only owned a property that was not in compliance with state, local, or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.

Household

Applicants and household members must live together for at least 12 months prior to applying for this program. All household members must be living together in their current home 10-12 months out of the year. Exceptions to this can be made on a case by case basis.

Selection

We select Habitat homeowners based on meeting our all of our program guidelines and standards and these criteria: ability to pay, need for housing, and willingness to partner.

Ability to Pay

We are looking at the income and credit of the applicants (which is described in detail above).

Need for Housing

We consider the stability of your current housing situation. Is your housing transitional, below market rate, unstable or unsafe? Is your current situation overcrowded? Does your current housing situation result in a cost burden (a very high percentage of your income going towards rent)?

Willingness to Partner

The Habitat homeownership program is a hand up, not a handout. You will be purchasing a home and needing to meet certain requirements to achieve that. We require sweat equity and a savings plan.

  • Sweat Equity
    Partner households: Any adult residing in the home must contribute 200 hours of sweat equity into the construction of their homes. Friends and family can donate a portion of those hours. Most of this work is done on the construction site, with reasonable accommodations made for health and disability reasons.

  • Savings Plan
    Once your household has been selected as a partner household, we will be working with you to create a savings plan that helps you save for your closing costs. More information is given if you are selected as a homeowner.

  • Public Advocate

    We will sometimes ask partner families or individuals to participate in communications efforts, including but not limited to video and print testimonials, media interviews, and photo shoots. As a partner, we ask you consent to have the content generated from these efforts used for marketing and fundraising purposes.