Revised May 2012

[ORGANIZATION NAME]

SELF HELP HOUSING

GROUP LABOR & BUILDING PROGRAM AGREEMENT

This Self Help Housing Group Labor & Building Program Agreement (“Agreement”) between [ORGANIZATION NAME] and ______(“Owner-Builder/s”) sets forth the requirements and responsibilities of the parties to the Agreement to form a Self Help Builders Cooperative and for its Owner-Builder members to provide the necessary contributions of labor for the construction of _____ (#) houses at ______(site location).

SECTION I - DEFINITION OF TERMS

“Agreement” means this Group Labor & Building Program Agreement, together with any addendum, attachments or amendments.

“Mutual Self Help Housing” means the construction method by which Owner-Builders in groups of generally five to ten households exchange labor with one another to reduce total construction costs and complete construction on their homes.

“Builders Cooperative” means the Mutual Self Help group of Owner-Builders, who, as a cooperative, contribute labor on the houses within their group to accomplish at least 65% of the tasks (listed on Exhibit B-2 of the USDA-RD Instruction 1944-I, as incorporated herein).

“Technical Assistance” means the organizing, supervision, and administration performed by [ORGANIZATION NAME].

“Lender” usually means USDA-Rural Development who has granted a loan to the borrower for Self Help home construction, or may mean another government lender or a local conventional lender.

“Closing” means, with respect to a loan, the origination and funding of such loan by a lender. At closing, title to the property is transferred to the Owner-Builder.

“Construction Period” is that period of time between loan closing and the final inspections required on all the completed houses in the Builders Cooperative.

"Builders Risk Insurance” or “Course of Construction Insurance" means the insurance required by the Lender(s) purchased by the Owner-Builder before closing on the loan, insuring against potential losses during construction.

“Homeowners Insurance” means the insurance required by the Lender(s) purchased by the Owner-Builder upon completion of the house (in some cases through dues paid to a Homeowners Association), insuring against loss by fire and other natural causes. This coverage replaces the Course of Construction Insurance and is put in place at least one week before USDA-RD final inspection.

“Consolidated Bank Account” (CBA) means the bank account established for each Builders Cooperative after loan closing for the payment of materials, subcontractors, and other necessary costs related to the construction of the Owner-Builders’ homes. The CBA is administered by [ORGANIZATION NAME] until all expenses related to the Owner-Builders’ homes have been paid and the account is balanced and closed.

“Split or Joint Purchase” means costs shared equally by the Owner-Builders for materials, contracts, permits, fees, utilities and any other related costs of construction that are used by or benefit the group, as determined by the Lead Construction Supervisor or other authorized [ORGANIZATION NAME] representative, and in accordance with Lender policy.

“Owner-Builder” means that person or persons who enter into a sweat-equity home construction obligation through the Mutual Self Help Housing Program, as reflected by their status as an applicant or co-applicant on the Application for Rural Housing Assistance (USDA Form RD 410-4).

“Records Keeper” means the Owner-Builder who volunteers for the Builders Cooperative to keep notes during the weekly meetings at the work site, and to review and monitor all Owner-Builder hours for the Builders Cooperative.

“Safety Coordinator” means the Owner-Builder who volunteers for the Builders Cooperative to work with Construction Supervisor to address safety concerns and procedures, and to regularly inventory the tools.

Initial______Initial______

1

"Executive Director" means the authorized representative acting on behalf of [ORGANIZATION NAME], who has the administrative and service delivery responsibility for all fiscal and human resources of the agency. The primary duties include directing general activities of the staff and establishing an effective working relationship with the community, staff and Board of Directors.

"Deputy Executive Director" means the authorized representative acting on behalf of [ORGANIZATION NAME] who oversees all housing development functions of [ORGANIZATION NAME].

“Program Manager” means the authorized representative acting on behalf of [ORGANIZATION NAME] who administers and directs the Self Help Housing Program, and serves as supervisor for the Loan Coordinator / Homeownership Counselor and the Construction Supervisors.

“Lead Construction Supervisor” means the authorized representative of [ORGANIZATION NAME], who manages the Self-Help Housing construction activities and serves as a supervisor for the construction staff.

“Construction Supervisor” means the authorized representative of [ORGANIZATION NAME], assigned to the Builders Cooperative whose primary responsibility is to provide guidance and instruction to the Owner-Builders, teaching them how to build each other’s homes.

“Loan Coordinator / Homeownership Counselor” means the authorized representative of [ORGANIZATION NAME] who recruits interested families, assists in assessing program eligibility, assists in the preparation and submittal of loan applications and assembles the Builders Cooperatives.

“Bookkeeper” means the authorized representative of [ORGANIZATION NAME] who manages the Consolidated Bank Account on behalf of the Builders Cooperative and its members.

SECTION II - RESPONSIBILITIES OF [ORGANIZATION NAME]

[ORGANIZATION NAME] will have control of the entire Mutual Self Help Program, starting with formation of the Builders Cooperative, and ending upon completion and payment in full for all costs related to the construction of the Mutual Self Help houses and other related improvements and closing of the CBA, at which time this Agreement will terminate.

[ORGANIZATION NAME]PROMISES TO PROVIDE TECHNICAL ASSISTANCE TO THE OWNER-BUILDER(S) AS FOLLOWS:

  1. Assist interested persons in becoming eligible and securing loans for lot purchase and house construction under the Mutual Self Help method.
  1. Conduct meetings with the applicants to explain the Self Help Housing program and subjects related to homeownership such as the loan application and eligibility requirements, maintaining good credit and credit repair, time and money management, loan payments, taxes, insurance and property maintenance.
  1. Assist in selecting, securing, and at times developing building sites that meet the requirements of the respective city or county, USDA-RD and [ORGANIZATION NAME].
  1. Provide house plans and specifications,as deemed acceptable to USDA-RD, to each Owner-Builder with all blueprints necessary. This cost will be included in the construction budget.
  1. To facilitate a series of preconstruction meetings to form the Builders Cooperative and review all aspects of the Self Help Housing program, including but not limited to financing, loan closing documents, house plans, development documents, this Agreement and its labor requirements, contracting and bill paying procedures, tools and safety.
  1. To facilitate weekly Builders Cooperative meetings during construction to address production planning, schedules, and safety, and assist in decision making and problem solving.
  1. To manage the Consolidated Bank Account, maintain accurate records of all purchases made for each Owner-Builder family, to keep on file all invoices, ledger sheets, budgets and contracts, in accordance with Section V of this Agreement. These records will be open to Owner-Builders by appointment.
  1. To monitor construction budgets and provide budget reports on a monthly basis.
  1. To provide a Program Manager and other staff as deemed necessary to oversee construction activities. Duties of the Program Manager include:
  2. Securing building sites
  3. Securing suitable house plans
  4. Establishing relationships with suppliers and subcontractors
  5. Creating the construction budgets
  6. Supervising the Construction Supervisors
  7. Supervising the Loan Coordinator
  8. Supervising the Bookkeeper
  9. Monitoring the progress the project
  10. Implementing disciplinary action with Building Group members as needed
  1. To provide a Construction Supervisor and other staff as deemed necessary who will provide the construction supervision and training for families while they build each other’s homes. Duties of the Construction Supervisor include:
  1. Coordinating subcontractor work.
  2. Purchasing and overseeing timely delivery of materials
  3. Providing a construction schedule and assuring it is adhered to
  4. Setting construction priorities for the most efficient use of time and materials
  5. Training of the Owner-Builders and their helpers in the construction skills they are expected to perform, including instruction on tool use and maintaining a safe work site
  6. Inspecting the work of the Owner-Builders, their helpers, and the subcontractors
  7. Coordinating a Weekly Work Schedule for the Owner-Builders and their helpersthat will include weekends and holidays. Work is planned around how many people are expected to be on site on any given day. The standard workday schedule is generally 8:00 am to 4:30 pm, with exceptions set solely by the Construction Supervisor
  8. Planning and training for unsupervised labor by the Owner-Builders, which shall be permitted only by prearrangement with the Construction Supervisor
  9. Assigning all labor tasks to Owner-Builders, their helpers and volunteers
  1. To provide a construction shack, temporary power poles, adequate water supply, and the appropriate heavy duty tools during the construction period. A fee for the use of these items may be included in the construction budget of each home.
  1. To provide and maintain a first aid kit on the job site; to instruct participants in safe and proper use of tools, and test each participant on this instruction.
  1. To act as bid solicitor, presenting the bids to the cooperative for their discussion and majority approval. To provide contracts as needed which will specify the terms of agreement between Owner-Builder and contractors. To receive proof of contractor’s insurance and bond.
  1. [ORGANIZATION NAME] will act as an intermediary in any situation in which there is a dispute over price, workmanship, or acceptability of materials.
  1. To act as a liaison between the participants and the Lender(s).
  1. To ensure that all homes in each Builders Cooperative will pass final inspection by USDA-RD at the same time (the only exceptions being if an Owner-Builder has breached this Agreement or if circumstances make performance impossible).
  1. To keep on file, in its corporate offices or other safe storage, copies of each Owner-Builder's records for a period of at least seven (7) years.

SECTION III – OWNER-BUILDER LABOR REQUIREMENTS

EACH OWNER-BUILDER AGREES/UNDERSTANDS AS FOLLOWS:

1.To work a sufficient number of hours to maintain the construction schedule, which shall be no less than 30 productive construction labor hours per week per Owner-Builder household during the entire Construction Period. (The goal is for the Construction Period to last no longer thantwelve months.) At least 15 hours per week must be worked by members of the Owner-Builder’s household. The balance of hours can be contributed by helpers recruited by the Owner-Builder.

2.Owner-Builders and their helpers will work with the Builders Cooperative to accomplish the following building tasks:

USDA-RD Instruction 1944 - I Exhibit B-2, Self Help Labor Commitment

Building Tasks / Owner-Builder Labor Tasks / Subcontracted Labor Tasks
1. Excavation / 5%
2. Footings & foundations / 8%
3.
4. Floor framing / 4%
5. Subflooring / 1%
6. Wall framing & sheathing / 7%
7. Roof framing and sheathing / 6%
8. Roofing / 5%
9. Siding & exterior trim / 7%
10. Windows & exterior doors / 9%
11. Plumbing -- roughed in / 2%
12. Sewage disposal / 1%
13. Heating -- roughed in / 1%
14. Electrical -- roughed in / 2%
15. Insulation / 2%
16. Dry wall / 8%
17. Porches & steps / 1%
18. Heating -- finished / 3%
19. Floor covering / 6%
20. Interior doors & trim / 6%
21. Cabinets & countertops / 1%
22. Interior painting / 4%
23. Exterior painting / 1%
24. Plumbing -- complete fixtures / 4%
25. Electrical -- complete fixtures / 1%
26. Finish hardware / 1%
27. Gutters & downspouts / 1%
28. Grading, paving, landscaping / 3%
TOTAL / 68% / 32%

* Full Credit for each task is granted to whoever (family or subcontractor) provides the majority of the labor on the task, as corroborated by task identification on the timesheets.

  1. Reasonable accommodations for persons with disabilities are provided in order for them to meet these hourly requirements. Owner-Builders with disabilities may work on less physical tasks or administrative tasks, or use volunteers to provide the required sweat equity. The volunteer working on behalf of the disabled Owner-Builder must enter into this Agreement by signing along with the Owner-Builder below. All homebuyers, including homebuyers with disabilities, must meet these minimum sweat equity requirements.

5.To follow the construction priorities set by the Construction Supervisor or his assigns. All Owner-Builders agree to work on all houses as directed and similarly, to allow all Owner-Builder's to work on their home.

6.Owner-Builders will schedule their time for working on the site in writing on the construction work schedule. They will notify the Construction Supervisor immediately if they are unable to keep that specific commitment. This schedule should be reviewed at the Weekly Production Planning and Safety Meeting.

7.Attend all Weekly Production Planning and Safety Meetings. If an emergency occurs making it impossible to attend a meeting, the Owner-Builder must contact the Construction Supervisor prior to the scheduled meeting and review the notes from the missed meeting the next time on site.

8.Each Owner-Builder household will complete the "Weekly Hours Time Sheet" (including tasks and

lot numbers where performed) and submit it for review by the Records Keeper and Construction Supervisor at the end of the work week.

9.Time claimed must be productive time as determined solely at the discretion of the Construction Supervisor. The Construction Supervisor has authority to disallow unproductive labor hours or unsupervised labor hours that were not prearranged.

10.Labor hours do not include lunch breaks, travel time, child care, excessive coffee breaks or any time away from the job site not on construction business.

11.No Owner-Builder will attempt to apply previously accumulated excess hours towards the required weekly hours unless prior permission has been requested and granted by the Builders Cooperative and [ORGANIZATION NAME].

12.Owner-Builders must introduce any helpers, including immediate family members, to the Construction Supervisor when they first arrive at the construction site. Any hours worked must be logged in daily.

13.Owner-Builders must review with their helpers the relevant responsibilities of the Owner-Builders and their helpers as detailed in this Agreement.

14.All approved helpers will sign a worker release form, agreeing to hold harmless [ORGANIZATION NAME] and the other Owner-Builders for any bodily injury or damage to personal property that may occur as result of the work being performed.

15.All Owner-Builders must own a complete set of approved hand tools according to the tool list provided by [ORGANIZATION NAME] and have them available each work day. Come to the job site prepared to work, properly attired according to the Construction Supervisor’s standards.

16.All helpers for the Owner-Builder must have the necessary hand tools for the work being performed, and be properly attired according to the Construction Supervisor’s standards.

17.Any persons conducting themselves in an unsafe, disruptive, verbal, physical, and or threatening manner may be asked to leave the job site by the Construction Supervisor and may be barred from further participation and/or referred to [ORGANIZATION NAME] for further action. The Construction Supervisor shall have the authority to discontinue all or any portion of the project when it is determined by the Supervisor that a dangerous situation exists which may cause personal injury, property or structural damage.

18.In the event that any Owner-Builder does not meet the minimum requirement for weekly labor hours, the shortage must be made up per the following schedule:

Less than 10 hours short – make up within one week following; no later

10 to 20 hours short – make up within 2 weeks following

More than 20 hours short – make up within 3 weeks following

Missing Family hours must be made up with Family hours.

If the Owner-Builder is unable to catch up within 3 following weeks after theinitial shortage, the Work Stoppage procedure outlined in 20.a will be initiated.

19.In the event that any Owner-Builder is not able to report for work for a period of one week or more due to incapacity of the Owner-Builder or any other family emergency, such inability must be reported immediately to the Construction Supervisor by the Owner-Builder. Proof of related circumstances may be requested by the Construction Supervisor. Volunteer hours may be substituted for the incapacitated Owner-Builder to meet the ongoing weekly labor requirements for that week only.

20.In the event of a protracted (more than one week) Owner-Builder absence due to emergency or incapacitation, the Construction Supervisor will meet with the remaining Owner-Builders of the Builder Cooperative, explain the cause of the absence, and the remaining Owner-Builders may elect to perform among themselves the necessary labor contribution of the incapacitated member, allow volunteer labor sent by the absent member, or a combination thereof. Other Owner-Builders may only donate hours worked in excess of each week’s 30 hour labor requirement during said absence, not previously accumulated excess hours. If the remaining Owner-Builders will not accept any of the alternatives offered to allow the absent Owner-Builder’s labor contribution to be made, then the Program Managermay terminate the Owner-Builder from the program in consultation with the Lender(s), regardless of the stage of completion of that Owner-Builder’s house.

21.The Owner-Builder agrees that Program Manager may call for a work stoppage on the Owner-Builder’s house if compliance with the cumulative labor contribution is not met, as follows:

  1. If an Owner-Builder remains 20 hours behind the total minimum number of labor hours expected, the Builder Cooperative’s labor contribution towards the construction of said family’s house may be stopped by the Program Manager until the family hours are caught up by working on the other houses.
  1. If an Owner-Builder falls 40 hours behind the expected number of labor hours, the Program Managermay stop all purchases of materials and contracts for that family’s house until the family’s hours are caught up by working on the other houses.
  1. If the Owner-Builder gets to be 60 hours behind, the Program Manager may terminate the Owner-Builder from the program in consultation with the Lender(s).

22.In the case of transfer of title to another approved applicant, the new Owner-Builder will become a member of the Builders Cooperative, abiding by all the rules and regulations of the Agreement and work will resume immediately on the construction of the house by all Owner-Builders. The hourly requirements for the new Owner-Builder will begin upon assumption of the loan; the new Owner-Builder will not be responsible for "making up" the delinquent hours of the previous Owner-Builder.