Habitat for Humanity is perhaps the best known of a number of non-profit organizations who use zero or low interest mortgages in order to accomplish their mission of ensuring decent housing for different groups of people.
After the passage of the S.A.F.E. Mortgage Licensing Act of 2008, some states were told that they must apply the provisions of the S.A.F.E. Act to affiliates of Habitat for Humanity. But the motivation for the SAFE act was to curb bad practices by some for-profit lenders who issued mortgages.
Habitat for Humanity works to end poverty housing by partnering with families who are living in substandard or overcrowded conditions. The families put in a certain number of hours of 'sweat equity' by working on the home that is being built for them, or on another project for Habitat. They pay a modest downpayment, and establish an affordable, no-interest mortgage with the local Habitat affiliate for the remainder of the value of their home. As new homeowners they build up equity in their homes, and their pride of ownership in a decent home contributes the the improvement of the neighborhood. Their mortgage payments to the Habitat affiliate enable homes to be build for other families, who become homeowners.
The Nonprofit Mortgage Clarification Act will make it clear that the S.A.F.E. act was not intended to be applied to certain non-profit organizations that issue mortgages. In the House of Representatives H.R. 4400 is intended to accomplish this purpose. Senators to support or co-sponsor the similar version, S. 3106, are needed.
Rep. Shuler, supporting the House version said, "Organizations like Habitat for Humanity partner with struggling Americans to provide them with an opportunity to become responsible homeowners. Because of this unique partnership, foreclosure and default rates on Habitat for Humanity loans are currently and consistently well below national rates."
Senator Kay Hagan, the sponsor of the Senate bill said, "This is a bipartisan bill which will ensure that nonprofits, such as Habitat for Humanity, can continue to help struggling American families purchase affordable homes. These nonprofits should not be burdened by these costly requirements which were intended for for-profit lenders."
Call or write to your senators to urge their support of S.3106.