Membership List & Classes

The Home-Buying Membership List will consist of members of 3 classes for each year. Class 1’s will have priority over Class 2’s, who will have priority over Class 3’s. All members on earlier-year lists will have priority over members on later-year lists, no matter their class. In other words, class 1, 2 & 3 members of 2007 will have a chance to top out and purchase a home before any members of 2008 and beyond would—unless members sell their spaces (more on his later).

Class 3 members shall consist of those choosing to pay their required cycle fee (RCF) plus any optional amount above that—actual accumulated cycle fee (AACF)—in order to obtain a higher cycle fee ratio (CFR) that would allow them to jump ahead of other members on the year’s Class 3 list. The CFR is the AACF ÷ RACF (required accumulated cycle fee). The RACF is the RCF multiplied by the number of years of membership. Example: For the prior ($375) couple mentioned, in three years, their RACF would be $1,125: ($375 X 3). This is the amount they are required to have paid in the 3 years. However, let’s say they choose to set their actual cycle fee at an even $1,000. In the three years, they would have an AACF of $3,000 and a CFR of 2.67: ($3,000 ÷ $1,125). This means that any Class 3 member joining in the same year and having a CFR above 2.67 would be placed above them on the home-buying list and any Class 3 member at less than 2.67 would be below them.

Class 2 members will consist of those paying the RCF, any optional additional amount, as well as contributing to the HAC Insurance Fund (HACIF). The HACIF will be a reserve that will be used to supplement insurance on homes purchased through HAC and will be distributed to members who file claims. It could serve as a deductible to the main insurance, or it could pay off total claims if enough is in the reserve. Members desiring to obtain Class 2 status would make an initial HACIF payment equal to at least one RCF. They may then contribute any amount above that at any time. They would elevate their positions on the Class 2 list according to their HACIFR (Ratio)—which is their actual amount of HACIF payments ÷ their RCF. Members topping out (whether or not they sell or opt out afterwards) may not receive a refund on their HACIF payments. Members opting out before topping out will receive a full refund. Members selling their space will receive no refund. Members purchasing homes will initially be covered according to their HACIFR before topping out, with payments being issued proportionately should multiple claims ever be filed at singular times. In time, HAC may offer an optional full-coverage plan for members.

Class 1 members will consist of those paying the RCF, HACIF, any optional amounts above requirements, and contributing to the Donation Payment Option (DPO). The DPO allows members the option of donating money to the Club which will be used to help pay off the house-payment debt of members who have topped out, with this donation being deducted from the homebuyers’ total balance. Members participating in the DPO must make an initial minimum donation of an amount equal to or greater than one RCF. They may then contribute as much more as they wish at any time before topping out and will then be elevated on the Class 1 list according to their DPOR (donation payment option ratio). This is the ratio of the member’s Accumulated Donation Payments (ADP) as compared to their RCF. A member with an RCF of $100 who has donated $300 will have a DPOR of 3.0 and will be placed above a Class 1 member on the same-year list with an RCF of $500 who has donated $1,250 and has a DPOR of 2.5. The “down” side is that Class 1 members will not receive a refund on their donation payments should they opt out or sell, because the payments are, in fact, “donations,” which is why these members are given first-class status. However, the up side is that many other members would in turn pay DPO’s to them—thereby possibly giving them their money right back, or even more!

A great advantage of the DPO is that it allows members who can afford it to sacrifice a little in order to save a lot. If a regular Club member is at least 3 years away from topping out and now pays $700/month to rent a habitat, it makes tremendously more sense to sacrifice (donate), say, $5,000 to cut that time down to one year (so that the member can begin paying to own) than it does to lose $16,800 more on a property he/she can never own.

DPO’s will be credited to the home-buying members’ DPO funds on a monthly basis, with the accumulated contributions being stored in a rainy day fund should the homebuyers fall onto hard times and need payments automatically made. DPO’s will be credited according to the home-buying members’ payment plan. Members on the 5, 10, 15 and 20-year plans will receive contributions at a ratio of 1, 3/4, 1/2, and 1/4 respectively. Example: If the month’s total DPO is $2,500, and there 4 homebuyers (one on each plan), the member on the 5-year plan would have $1,000 contributed, 10 = $750, 15 = $500, and 20 = $250. The homebuyers will still be required to make full monthly payments until debt retirement, with their accumulated DPO’s being used to help pay off their final payment.