Proyecto Azteca: Sweat Equity
Bordering the Future
Proyecto Azteca in San Juan, Texas, helps colonia residents build safe, decent housing through self-help construction strategies. Since 1991, the program has helped 80 colonias families build their own homes, and has emerged as a model for other colonia organizations along the border.
Proyecto Azteca builds on the philosophy of self-help by organizing family participants into construction teams and offering affordable mortgages to cover construction costs and lot purchases. The teams work with construction professionals, and home designs are based on the input of colonia representatives. The wood frame homes contain 816 square feet and three bedrooms. All families residing in Hidalgo County are eligible to participate. Proyecto Azteca helps families earning as little as $4,500 with mortgage payments of between $67 and $90 monthly.1
The houses are financed with federal HOME Investment Partnerships (HOME) funds from the Hidalgo Urban County Program. Proyecto Azteca uses the funds to offer no-interest mortgages for qualifying colonia residents. Of 58 loans administered by Proyecto Azteca since 1991, not one has defaulted. The Texas Department of Housing and Community Affairs (TDHCA) participates in the program by providing dollars from its Single-Family and Housing Trust Fund programs. The agency administers 22 homes, an arrangement that has caused some discomfort for residents who find it difficult to talk to nonlocal loan administrators.2
Under a 1995 state law calling for self-help centers in colonias, Proyecto Azteca was awarded a two-year, $800,000 contract. Self-help centers were intended to provide the technical expertise necessary for colonia residents to build or rehabilitate their homes.3 The centers were also authorized to convert contracts for deeds into conventional mortgages, allowing residents to build equity as they paid off their new homes. Proyecto Azteca's Self-Help Center, located on the construction site in San Juan, has been in business since November 1996. The center offers preconstruction classes and access to quality construction tools through its tool library.
In February 1997, Proyecto Azteca proposed a model subdivision for Colonia Jessups residents living in substandard housing. The project, approved by TDHCA and financed by the Department's Office of Colonia Initiatives, was the state's first attempt to replace a substandard colonia. Colonia Jessups, home to 17 families in northeastern Hidalgo County, posed health and safety risks, the least of which were unpaved roads and scattered outhouses. The area had been plagued by floods since several feet of topsoil were removed from the land before lots were sold to residents. And, like most colonias, Colonia Jessups had no water or sewer lines, the subject of a lawsuit filed by the Texas Attorney General.4
After conducting a needs assessment and talking to residents, Proyecto Azteca staff decided to move the colonia to a 15-acre tract, a mile from its original site. In late 1997, developers began platting the land and putting in water, sewer, and electrical lines. Home construction began in February 1998, with hopes of having 17 homes completed by the fall. Estimated relocation costs were $491,500, including financing for home construction and land acquisition.5 Mortgage loans for the homes were to follow Proyecto Azteca guidelines and be repaid over 20 years at no interest. Families participating in the project were expected to pay $125 to $150 a month.6
Financing of the new lots was complicated because families had already invested sizable amounts in their original lots. Conceding the initial investments, Proyecto Azteca agreed to give families zero-interest "balloon loans" for the cost of the new lots, payable in 10 years. Families achieving financial compensation under the state's lawsuit agreed to pass along any awards to Proyecto Azteca to pay for their new lots. If the lawsuit proves unsuccessful, Proyecto Azteca plans to renegotiate the balloon notes with families at the end of the first 10 years.
1 This figure includes the refinancing of the resident's lot. It does not include taxes and insurance which raise the payment to $110-$140.
2 Interviews with Jesus Limon, executive director, and Leslie Newman, Proyecto Azteca, San Juan, Texas, November 14, 1997.
3 Texas S.B. 1509, 75th Leg., Reg. Sess. (1995).
4 Jessup residents allege they bought the land believing the developer's claim that water and sewer services would be provided in the future and before the flooding problems became apparent.
5 Proyecto Azteca, "Colonia Jessups: A Proposal to Create a Model Subdivision" (San Juan, Texas, February 1997). This amount covers financing for the 17 original families living in Colonia Jessups. The construction cost for Proyecto Azteca's wood-frame homes is $15,500. Lot acquisition cost is $9,500 per lot.
6 Telephone interview with Leslie Newman, Proyecto Azteca, San Juan, Texas, April 17, 1998. This would include property tax, insurance, and payment on the outstanding principal.