Habitat for Humanity                                                         ATTACHMENT 4

   Orange County, NC, Inc.

 1829 E. Franklin St. #1200B • Chapel Hill, NC 27514 • (919)932.7077, FAX (919)932.7079 • [email protected]

February 5, 2009

TO:                  Gene Poveromo

FROM:            Susan Levy, Executive Director

RE:                   Response to Council’s request for additional information regarding long term maintenance of Habitat homes in proposed Bradley Ridge Subdivision.

Concerns were raised by members of the Sunrise Coalition regarding the ability of Habitat homeowners to pay Town of Chapel Hill taxes once the area is annexed.  The issue of long term maintenance of the homes was also raised.  This issue was also raised during the review process for Habitat’s Purefoy Drive subdivision, and the response below incorporates what was previously presented to the Town Council during the review of the SUP for that development.

The process by which Habitat for Humanity homes are built naturally creates the foundation for solid relationships and community spirit. Prospective Habitat homeowners must first help build other Habitat homes before they can own their own home. They are involved with the construction of their own home, which creates pride in the home and commitment to their neighborhood.  By participating in the construction of their homes and attending classes in home maintenance and repair, and training in running an effective homeowners’ association, Habitat homeowners are also better prepared to maintain their homes and their neighborhoods over the long term. 

While Habitat provides in-depth training and mentoring to its homeowners, a fundamental part of its mission is to provide ownership to those whom it serves.  As such, these owners will have the same responsibilities as any other home-owning member of the community and they will be responsible for maintaining their homes and their neighborhood. Habitat provides mentoring to individual homeowners as well as to Homeowners’ Associations created in the subdivisions we develop.  Additionally, Habitat, as mortgage holder on each property, has certain powers to protect its investment in these homes.  Habitat also budgets funds each year for a zero interest revolving loan fund to assist homeowners with emergency repairs. Additionally, Habitat designs the exterior finishes of its homes to be as low maintenance as possible, through the use of vinyl siding and masonry and concrete porches and 20 year roofs.  All homes are also built to Energy Star/Systems Vision standards, and will be built so that they can receive at a minimum the Bronze Certification for green building as established by the Green building Council of the Durham/Orange/Chatham Home Builders Association.   By making the homes as energy efficient as possible, Habitat enables homeowners to minimize their energy related expenses so that their ability to spend money on maintenance is increased.

All anticipated common costs of the subdivision will be carefully determined by Habitat for Humanity and budgeted into the structure of the HOA in the form of HOA dues.  Dues will be collected and escrowed by Habitat (as are taxes and insurance) as a part of the monthly mortgage payment.  Failure to pay HOA dues will be a condition of default on the mortgages.

When approving applicants to purchase the homes in Bradley Ridge, Habitat will compute debt to income ratios based on the monthly mortgage payment, plus HOA dues, plus projected taxes that assume annexation by the Town of Chapel Hill.  The resulting debt to income ratios must be within acceptable limits in order for an applicant to be approved.

Habitat will make every effort to prepare and educate the homeowners who will purchase a home in Bradley Ridge about the restrictive covenants that will govern the subdivision, about the need to budget for the long term costs of maintaining their home, and about resources that are available to them, such as the revolving loan fund for repairs.