Habitat houses are a hand-up -- not a handout

People often think the houses built by Habitat for Humanity are just given to the homeowners. That couldn't be further from the truth.

Families typically get a 25-year mortgage with a 0% interest rate. The typical monthly payment is between $500 and $525 a month.

Why so cheap? First, the volunteer labor comes with no costs attached. Second, the Habitat organization follows Biblical scripture that emphasizes a 0% interest rate.

Interestingly, the rate of default with Habitat homes is miniscule compared to what's generally happening in the marketplace at large. That's because the homeowners have a vested interest in more ways than one. Families must also do the following:

• Complete 250 hours of "sweat equity" on other Habitat homes or on their own
• Attend 12 homeowner education classes and hands-on maintenance seminars
• Make all monthly payments on time as a renter for 1 year before a formal closing takes place. At that point, all the money paid thus far is applied as mortgage payments.

This is a hand-up program, not a hand-out one. If you pay, you stay...and if you don't, you go!

Editor's note: This segment originally aired Jan. 31, 2012.