Home Foreclosures Are Affecting "Habitat for Humanity" for Good and Bad

The long recession with its many foreclosed home available, has benefited Habitat for Humanity in its mission to provide decent homes for low income citizens. Instead of building new homes from scratch, Habitat is now buying up foreclosed homes and rehabbing them.

Habitat is a worldwide organization. It started as a Christian project and expanded to an ecumenical organization. It has been hugely successful putting working low-income people into decent single homes all over the world. Recipients must contribute "sweat equity" in their home's construction, and be able to make payments on a long term interest- free mortgage.

Many Habitat for Humanity chapters have taken advantage of the thousands of foreclosures throughout the country. They are buying up vacant foreclosed-on homes at rock bottom prices.

Their original method of building a new home with volunteer labor is still in force.

Volunteer labor is used on the rehabs whenever possible. Repair professionals are hired to fix code violations thus creating jobs in the community.

No longer having to build from the ground up, Habitat officials are finding they can buy and rehab cheaper and quicker than they can build. Families can move in sooner and owner-occupied houses boost home values in high foreclosure neighborhoods.

Habit receives federal money to help with these projects through grants from the US Housing and Neighborhood Recovery and Stabilization Program. State funds, city money, gifts and donations also support the program.

Unfortunately as the recession has hurt homeowners all over the country, it has driven Habitat to file foreclosure lawsuits on its own clients in many states. Fortunately the number of foreclosures so far is small, and Habitat forecloses only as a last resort. As one Habit official said, "We are in the business of putting people into homes, not taking them out."

Habit officials are working hard to avoid foreclosing on its clients. The program discusses new payment options and tries to avoid filing a foreclosure suit. They try to keep negotiations with the client open until "five minutes before the foreclosure suit goes before the judge."

Habitat does not make a profit on its houses, but does rely on clients to pay them back so they can continue building more homes.

Sources:

St. Pete Times

http://www.orlandosentinel.com/news/local/state/os-habitat-for-humanity-foreclos...

http://www.charlotteobserver.com/2011/01/23/199546/habitat-focuses-on-foreclo...

TBO.com