Debt Barrier Removal Program

The two main causes for denial of financing for households has been debt-to-income ratios and credit history. The purpose of the Debt Barrier Removal Program is to help correct credit challenges now to allow for wealth creation in a way that only Habitat’s homeownership model can address. We sell homes at cost which is historically well below appraised value. This gives Habitat room to absorb homebuyers’ prohibitive debts in the price of the home without affecting mortgage financing. Maximum repayment amount of $50,000.

Eligible applicants will be mortgage-ready (income, assets, credit, etc.) but have excessive debts that are hindering their ability to purchase a home.

What debts qualify?

Any debts qualify as long as they affect your ability to get a home loan. For example:

  • Deferred Student Loans
  • Back Child Support (must be current and paying as agreed at time of application)
  • Tax Liens or other government judgments

How will these debts be paid off?

  • These debts will be paid by Habitat at least 4 months prior to home completion (50% of minimum required Sweat Equity Hours or more must be completed)
  • Total cost of paid debts will be added as part of the cost of the home completion, converting the homebuyers debt into an appreciable asset