Chattanooga area home builders launched a drive at their June dinner meeting to raise $50,000 to build their first house for Habitat for Humanity of Greater Chattanooga this fall.

The Home Builders Association of Southern Tennessee (HBAST) kicked off the effort at the meeting at which representatives of Habitat outlined the program of providing affordable homes for families who would otherwise be unable to own a home.

HBAST President Robert Hart Jr. said the builders would have the funds by the first of September with construction set to begin on Sept. 13 and the new Habitat house to be dedicated on Nov. 19.

Jan Varnell, Habitat executive director, along with Jack Riggar, resource director, and Don Wallis, past president of Habitat as well as past president of HBAST, explained the process of building a Habitat house, how purchasers are selected and how Habitat helps the prospective owners complete the purchase.

Ms. Varnell said the home builders’ Habitat house “will be the 179th house for us.” Mr. Wallis said this is Chattanooga Habitat’s 20th year and “this year we expect to build our 200th house.”

The Habitat house will be “built and funded by the HBAST in memory of Ralph Chumley, Calvin Payne and Jim Payne,” who were long-time members of the home builders’ organization.

Homes built by Habitat at a cost of some $50,000, using volunteer labor, said Ms. Varnell, are sold to the new owners who have gone through an extensive program to qualify and pay the $50,000 with a zero interest mortgage and currently a second forgivable $30,000 mortgage. With each mortgage payment, she said, a part of the second mortgage is forgiven.

Funds raise to build a Habitat house, such as those being raised by the builders, make it possible to proceed immediately with construction and mortgage payments by the new owners go back into Habitat to continue the work of the organization.

The HBAST Habitat home will be built in the Shepherd Park development near the Chattanooga airport, the largest multi-home development by Chattanooga Habitat which will have 50 homes when completed.

While the current price of a Habitat house and lot is $50,000, said Ms. Varnell, the latest appraised house value is $98,000. Every Habitat mortgage includes a forgivable second mortgage to fend off predatory lenders and encourage homeowners to stay in their home for the long term. The average house payment is about $300, including taxes and insurance.

If a homeowner decided to sell the house, Ms. Varnell explained, not only would the owner have to pay the balance on the first mortgage, but also the balance on the forgivable mortgage. With the higher appraised value, she added, “we will probably have to adjust the second forgivable mortgage to total the appraised value.” That would eliminate the possibility of a big profit for a buyer turning around and selling the house at the appraised value.

Most Habitat homes are about 1,050 square feet with three bedrooms and one and a half baths. There are some four bedroom houses with 1,150 square feet.

Habitat homeowners meet income guidelines, complete a series of homeownership classes and invest 300 hours of “sweat equity” building their homes and those of other Habitat families. They commit to a monthly payment for 15 to 25 years. Habitat is a hand up, not a hand out, said Ms. Varnell.

Since the new Habitat homeowners usually have never lived in anything but rental or public housing, they attend classes to help them learn what it means to be homeowners including home maintenance that they will be responsible for.

Mr. Riggar said, “We don’t take federal funds for home building. All the funds are generated here.” He said, if available, federal funding may be used building the infrastructure of a new development, but not for the houses.

Mr. Wallis said the Habitat “concept is to create homeownership. We’re trying to make them independent homeowners.”

The money raised here, said Ms. Varnell, stays here and helps buy more property, more lots and build more Habitat homes.

Habitat in a year, she said, receives some 150 inquiries about becoming Habitat homeowners and about half of those qualify.

Julian Bell III, HBAST executive officer, said the board wanted to come up with a project in memory of three builders who devoted a large part of their lives to creating homeownership. This will be “a tribute to three truly great men.”

He said, “We have been blessed by this community” but “we rarely create homeownership from families that have never been there.” He continued, this will be an “opportunity to give back to the community. I can’t think of a more meaningful way” to repay the community than by providing a home for “people not as blessed as we are.”