Habitat for Humanity Bay County set to break ground on first of four new ‘Missing Middle’ homes

With a little help from the Michigan State Housing Development Authority (also known as MSHDA), four local families will be open doors to new homes next year. Just as importantly, four lots in the city of Bay City will return to the tax rolls.

Bay County Habitat for Humanity is partnering with MSHDA on its Missing Middle project, which aims to make affordable homes available to middle income families.

Brian Krause, Executive Director of Bay County Habitat for Humanity, says this is an exciting opportunity for these families and the community. The properties they’ll be building on are blighted lots that were part of the Bay County Land Bank. Each one includes a dilapidated or burned-out house that will be torn down to make way for a new, energy-efficient home.

Construction is expensive, but Krause says partnering with MSHDA means state funding will fill the gap, making the homes more affordable.

“Right now, it costs a lot more to build a house than we can sell it for,” he says, so the state is stepping in to fill the gap between building cost and what a homebuyer can afford to pay.

“If I put $210,000 into building a house, but I can only sell it for $130,000 then the Missing Middle Program will pay that money back,” Krause explains. “It’s gap funding, similar to gap insurance, through MSHDA.”

The Missing Middle Housing Program is funded through American Rescue Plan funds. Grants are awarded to help defray the labor and material costs of construction. Bay County Habitat for Humanity was awarded $320,000 to spread across the four homes it plans to build over the next year and a half. 

Habitat for Humanity helps families help themselves. Volunteers pitch in to rehabilitate older homes, but families also must lend sweat equity to qualify for Habitat. (Photo courtesy of Bay County Habitat for Humanity)Cleaning up blighted lots and building new homes is a win for the community, Krause says.

“We love the sustainability of re-doing houses, and we are re-doing houses,” he says.

But building new houses can have a domino effect on the neighborhood.

“The (new) house is worth more, too, and also when you put those new houses in a neighborhood, then the other neighbors start to go ‘Hey! This is cool,’ and they start to take pride in their communities. Then all of the sudden your neighborhood is starting to pick up, and property values are going up. It’s one of those things that just builds on itself.”

Whether Habitat builds new or rehabilitates existing housing, the keys don’t come free. Habitat does not give away homes.

“A lot of people think the houses are given to them (the families,]),” Krause says, but that’s just not true.

Families must pay for the homes, help build them, qualify for a mortgage, and attend financial education classes.

“(Families) pay full price for these houses. They have to make their payments, they have to do all the stuff, and we also keep an eye on them for a while,” he says.

Krause says even during the COVID-19 pandemic, families at only two of the 23 local Habitat homes fell behind on their payments.  He expects that trend to continue.

 “We’re proud of our partner families,” Krause adds.

Anyone who falls too far behind on their mortgage or can’t keep up with payments must pay back fees and funding, including the gap funding, Krause says.

"If they fall behind, we will work with the family to help them get back on track," Krause says. "They must stay in the home for five year or must pay the gap funding back."

Habitat for Humanity expects to continue rehabilitating older homes, but Krause says the new homes are much more efficient and affordable in the long run.

“You can build a new home there, or we can take an old home and put $70,000 to $100,000 into a house that’s 100 years old. You’re still going to have a 100-year-old house – even if you retrofit most of the stuff, you’re still going to have issues with it, it’s still going to be that old house.”

Even during the COVID-19 pandemic, the majority of local Habitat families were able to keep up with their mortgage payments. (Photo courtesy of Bay County Habitat for Humanity)The new homes are what are being called “green homes” because they have high-efficiency appliances, windows, and furnaces, and also have extra insulation.

“This family, for the next 20 years should not have any issues whatsoever, except for paying their house payment,” says Krause. “We can heat a lot of the Habitat houses for about $250 a year because they’re so efficient.”

Groundbreaking on the first home is set for August on a property near Bay City Central High School. Krause says the family that will be moving in there has school-age kids who will be able to walk to school.

Getting kids a room of their own, and a place where they can study is another reason for filling these gaps, says Krause.

"A lot of these families are constantly moving from rental to rental or have no home at all," Krause says. "Kids that are living door-to-door, now they have their own bedroom, they can do their homework, and they can have their friends over.”

Krause says they are working with local contractor, General Housing Corp., to build the homes.The homes are modular, not manufactured homes, and are built beyond current building specifications. All are ADA accessible.

In order to qualify for the Missing Middle Housing Project, families apply through the Habitat for Humanity website. An earnings qualification table is available in the application.

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Read more articles by Denyse Shannon.

As a feature writer and freelance journalist, Denyse Shannon has written professionally for over two and a half decades. She has worked as a contractor for daily and weekly newspapers, national and local magazines, and taught introductory media writing at her alma mater – Central Michigan University. She also holds a Master of Arts in journalism from Michigan State University. She and her husband live in Bangor Township and enjoy sailing on the Bay, and are avid cyclists.