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Habitat’s Dilemma: A New House Beckons but Can’t Find a Qualified Taker

This house on East Ocean Avenue in Marmora is available to a family that qualifies through Habitat for Humanity Cape May. It features three bedrooms and two baths and has 1,144 square feet.

By Karen Knight

MARMORA – A Habitat for Humanity home on East Ocean Avenue in Marmora is ready to be occupied, but the organization has been unable to find a qualifying family for months.

The 1,144-square-foot modular home with three bedrooms and two baths was the site of an August 2022 groundbreaking ceremony, with an intended family participating. However, that family had to withdraw as a new homeowner “at the last minute” due to a change in circumstances, Habitat Executive Director Sarah Matthews said.

“It’s puzzling to us why we are not flooded with applications,” Matthews said about the home, which has been available since this past summer. “We have had applicants who met our new income ranges, but have a lower credit score or a higher debt-to-income ratio, so they didn’t qualify.

“We are aware people are in need of housing because of emails and conversations we have about the housing situation in the county. But it’s just not that easy to qualify.”

Applicants for a Habitat home must meet three main criteria: A demonstrated need, ability to pay, and a willingness to partner with Habitat. Matthews explained that “need” might include problems with the family’s previous home, including problems with the water, electrical, sewage or heating systems, or the family’s failure to meet city property maintenance standards. Also taken into consideration are the number, ages and sexes of children compared to the number of bedrooms in the home.

“The percentage of your monthly income that you currently spend on housing is considered when determining need,” she said. “No more than 30% of your income is expected to be used to pay for the principle, interest, property taxes and insurance of a Habitat home.”

Matthews said Habitat Cape May decreased its minimum income requirements since reopening applications for this home so the organization could reach a broader market. Previously, the income range for a family of three was $43,143 to $56,074. Now the lower end is $34,507 for a family of three, and it goes up to $44,476 for a family of six.

“We realized that with so many people making minimum wage, we needed to reach a broader audience,” Matthews said, “so we adjusted our range to allow more people to potentially qualify.”

Applicants must have a credit score of at least 620, with a debt-to-income ratio approved by the bank issuing the mortgage. There is a 30-year deed restriction on the property resale and refinancing and a forgivable 30-year silent second mortgage to achieve affordability, Matthews said.

The third criterion, willingness to partner, means becoming a partner family completing a minimum of 300 hours of volunteer work, or “sweat equity.” Sweat equity, she explained, includes helping with the construction of the home and the homes of others. Since this home is already built, she said the sweat equity could be earned by volunteering.

“You can volunteer at our ReStore or with the administrative office,” Matthews said. “There are events we hold where one can volunteer, or help write letters.” Because the bulk of sweat equity is completed after moving in, a $500 refundable acceptance fee is required and returned upon completion of the sweat equity.

Matthews said there are a number of factors that may be affecting applications for the house.

“Most people in the area are established within their own community, so they may not want to move to Upper Township if they are living in the lower parts of the county,” she said. “They want to keep their longevity and family roots where they are currently living.”

Other reasons they may not be able to qualify is lack of full-time year-round jobs, lack of a “young” workforce to provide the services required by tourism, the county’s leading industry, and lack of a feeling of readiness by families to take on the responsibilities of a mortgage and home ownership.

“So many young people have left the area, especially after the pandemic,” Matthews said. “The pandemic really changed the face of our tourism and service industry, as anyone can tell you who has been in a restaurant during the summer and the business didn’t have enough staff.

“We are not cultivating younger families to come to the area by providing affordable housing for them. Many of the year-round rentals have become short-term or seasonal rentals, or the owners decide they want to Airbnb them. When this happens, the family finds themselves without housing, and without a chance to prepare to become a homeowner.”

According to the Cape May County 2020 Data Book prepared in August 2022 for the Cape May County Planning Department, there are 99,394 total housing units in the county of which 40,670, or 41%, are occupied, and 58,724, or 59%, are vacant. Of those vacant housing units (58,724), 50,551, or 86%, are considered for seasonal, recreational or occasional use. Twenty-two percent, or 8,947 of those 40,670 occupied housing units, are renter-occupied. Efforts to get updated data were unsuccessful.

“We are in significant need of long-term multifamily housing,” Matthews said.

Elizabeth Franco, Habitat’s operations manager, said 90% of those applying are families whose rental home was sold and whose rents are being raised, and the family finds itself not ready for home ownership. “They just can’t jump from renter to home ownership,” she said. “People just don’t seem to be looking for starter homes here.”

Any family applying for a home is kept in the application process for as long as possible. Matthews said Habitat will work with a family to help them understand where they are falling short, and how to make improvements so they still have a chance for a Habitat home.

“It’s a real crisis,” Franco added. “We’re not getting enough qualified applicants, and people are buying homes and converting them to seasonal rentals. We will keep eligible applicants moving along the process until we seal the deal.”

Anyone interested in applying or seeking more information about Habitat home ownership should contact homeownerservices@habitatcapemay.org.

Contact the author, Karen Knight, at kknight@cmcherald.com.

Reporter

Karen Knight is a reporter for the Cape May County Herald.

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