Partnership Agreement Sample (Page 3 of 10) in pdf

cash payments you have paid towards closing costs. You will not, however, be

compensated in any way for any of the “sweat equity” hours you have volunteered, as

described in Paragraph 2 of the next section of this Agreement.

Based on our current house production procedures, we expect the completed house to

generally conform to the basic house description attached to this Agreement.

YOUR OBLIGATIONS UNDER THE HABITAT HOMEOWNERSHIP PROGRAM

Your participation in the Program is subject to the performance of all of the following

requirements within [ ] months of execution of this Agreement:

CLOSING COSTS PAYMENT: You must pay to Habitat for Humanity the amount of

$____________ at closing that will be used to pay certain costs associated with the

home sale or loan closing. To save these funds, you must pay $_____ to Habitat for

Humanity each month until loan closing. The money will be refunded to you in full if

you fail to meet the requirements of the Program or if you elect to withdraw from the

Program for any reason. [Alternatively, you can save these funds on your own, and

provide proof of savings to Habitat for Humanity monthly.]

[NOTE TO AFFILIATE TO BE REMOVED WHEN FINALIZING PARTNERSHIP AGREEMENT:

Affiliate can adjust the template language above to include closing costs or down payments or both.

A cash payment of the closing costs or other unsubsidized cash down payment requires planning and saving

for the prospective Habitat homeowner. Discussion of the need for a cash payment of closing costs must be

covered with the signing of this Partnership Agreement, In cases when the affiliate collects the funds for

closing costs or a down payment, it should be disclosed to potential homebuyers that they are fully

refundable in the event the applicant is deselected from the program or if the applicant decides to

withdraw his or her participation from the Habitat homeownership program. These payments

should be kept in a trust account established for this purpose and should not be commingled with

the affiliate’s funds until closing.



Down payment: The part of the house’s sale price that the buyer pays in cash at closing. It reduces

the amount of the loan (usually through a grant obtained by the affiliate). If funded by a third-party

subsidy provider, the amount of down-payment assistance is typically evidenced by a deferred

subordinate mortgage (“soft second”) in favor of the subsidy provider.



Closing costs: Cash required at the closing to pay for items such as title policies, recording fees,

inspections and escrow reserve funds. Closing costs are in addition to the sales price and are outlined

in the Good Faith Estimate, the Truth in Lending statement and the settlement statement.]

2. SWEAT EQUITY: Before the closing of your loan, you and your family members must

work at least _______ “sweat equity” hours as a Habitat for Humanity volunteer. The

total “sweat equity” requirement per family will not exceed ____ hours. At least _____

hours of your sweat equity hours must be completed in construction of your own

Partnership Agreement Sample Page 3