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Abstract

USDA's 502 Direct Loan Homeownership Program offers a limited number of borrowers the option of participating in mutual self-help programs. Through these programs, nonprofit entities organize 5 to 12 borrowers into a self-help team that works together to complete each other's homes. Evidence from a survey of 502 borrowers suggests that the "sweat-equity" method of building a home improves the chances of successfully owning a modest home while enhancing the wealth of the borrower.

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