Federal grants given for affordable housing

January 2, 1981

Taking a major step toward finding if first-time home buyers can obtain affordale housing in the future, the US Department of Housing and Urban Development has awarded 19 first-stage grants of about $10,000 to US home developers.

Costs and building methods in these pilot projects in experimental housing will differ mostly because of regional variations. One grant on the West Coast is being used to favor the do-it-yourself buyer. Developes there have determined that cluster housing on adjacent 25-foot-wide lots could be one answer to new and inexpensive basic housing.

Eeach lot would be fenced with eight-foot-high masonry walls and with alley access. The basic floor plan would show a studio-type layout and special core-wall (built on mobile home specifications) to house all utilities needed for the marginal home. West Coast developers maintain this shell-on-site would cost the individual buyer $3,500 on today's market.

The buyer then could rough in his own house walls and complete the basic home in stretched-out stages.

Another possibility would be for developers to provide a more completely enclosed basic unit of about 600 square feet inside these lots. This, according to West Coast estimates, would cost the buyer about $20,000, exclusive of land. To support a plant of this kind, HUD has agreed to provide conventional FHA mortgage insurance for the owner-builder at this stage and at interim stages of construction.

Developers feel the do-it-yourself builder could pay for much of the construction out of current earnings without the burden of heavy, long-term mortgage payments.