Tiny homes are being built around the country for a variety of reasons — some are designed for affordability, others are prefabricated to be constructed quickly, and some are made by people who simply choose to live a minimalist lifestyle.

In Detroit, an entire neighborhood of tiny houses is under construction, with one primary goal: giving homeless and low-income people the opportunity to own a house.

A rending of what the neighborhood will look like (below), compared with its current state (above) Cass Community Social Services A local nonprofit organization called Cass Community Social Services is spearheading the project, which will build 25 single-family homes ranging from 250 to 400 square feet. The first house was completed in September, and six more are expected to be built by the end of the year.

At least half of the 25 houses will be occupied by formerly homeless people, with seniors, college students and Cass staff members making up the rest of the population.

The concept of providing tiny houses for low-income people isn’t new — San Jose, California recently passed a law to facilitate the construction of tiny homes for the homeless, and many other cities, including Austin, Texas and Portland, Oregon have created villages of tiny homes for the homeless. These initiatives are supported by research that suggests the most efficient way to combat homelessness is to simply provide those living on the streets with homes.

But the Detroit model is different for an important reason: It's the only tiny house community in the country where residents rent to own.

"Everybody is talking right now about ending homelessness, but really the goal for this project is to end poverty for these families," Reverend Faith Fowler, the executive director of Cass, tells Business Insider.

When they move in, residents will start by signing a one-year lease with a stipulated rent that amounts to no more than one third of their monthly income. They'll continue to sign new annual leases for their first three years in the home (as long as they pay rent on time and comply with the rest of the terms).

After three years, they’ll be invited to sign a land contract that amounts to the total rent for four subsequent years. After paying that off (seven years after moving in), the resident will legally become the owner of the land and home. Their rent will have essentially bought them the house.

Fowler says the hope is that the homes can become cushions the residents can fall back on in times of crisis, and can allow them to take out loans with better interest rates.

"You have something to leave on generationally in your family, which is part of the American Dream," she says.

A construction crew works on the neighborhood's first tiny house Cass Community Social Services The houses can hold individuals or couples, and are being built by a combination of professional construction workers and Cass volunteers.

Once complete, the neighborhood will also be exceptional for another reason: Each tiny home will look unique. Cass purchased 25 individual sets of architectural plans, ranging from Cape Cod to Victorian to Modern styles.

"Everything is very different on purpose so people have a pride in their home," Fowler says.

Now that the initial model house is finished, the rest of the homes are expected to be built in batches of six. Because they're so small, each only requires five weeks of construction and costs an estimated $40,000 to $50,000.

The development is completely funded by private money, much of which has come in the form of grants from organizations like the Ford Motor Company and the RNR Foundation. So far, Cass has raised $800,000 of the desired $1.5 million.

The interior of the neighborhood's first tiny house Spencer Hayes/Cass Once all six homes currently under construction are complete, Cass will move the first round of tenants into the area. The organization is accepting applications through the end of October, and Fowler says over 600 paper applications have been handed out so far.

The organization is primarily looking for people who are ready but financially unable to become homeowners, she explains. The applicants' financial, criminal, housing and employment histories will all be examined, and the top candidates will be invited for an interview, partially to get to know them and also to make sure they understand the neighborhood will be in the spotlight.

Once they move in, tenants will become part of a homeowners association, which will be involved in the process of choosing future residents. They'll also take part in mandatory monthly classes about financial literacy and home ownership.

These policies came out of several months of research that Fowler conducted in the summer of 2015, when she visited other low-income tiny home villages around the country. She says those trips led her to make several novel decisions for the community.

Unlike many similar residential projects, the Cass Tiny Homes community won't feature communal space for cooking or doing laundry, since that could make it more complicated for residents to sell their homes later. Plus, the tiny houses are being built on regular 3,000-square-foot lots. All but one of the lots were completely vacant before Cass took them over, and Fowler says the organization counted 300 other vacant lots within a mile of the model house.

An overhead view of Cass' future tiny home neighborhood Cass Community Social Services

Fowler says Cass' decision to locate the homes in a central area of Detroit also sets it apart.

"The other communities we visited are outside of town, they’re removed from the life of the city," she explains. "We wanted to tuck ours into an existing neighborhood."

The full community of homes is expected be complete by next Christmas — "if all the stars align," Fowler says.