Learn About Mortgage Foreclosures on Habitat for Humanity Homes

Habitat for Humanity is a non-profit, non-government Christian organization dedicated to building decent, affordable housing. Their homes are built with labor that's been volunteered and are sold at no profit. Homeowners are chosen by the organization for their need, their ability to pay back their affordable, non-profit mortgage, and their willingness to work with Habitat to give "sweat equity" for their new home.

Mortgage payments to Habitat for Humanity are like a rent-to-own contract, for the first few years, with the money going towards future home building projects. Owners selling their homes before the mortgage is paid are obligated to sell it to Habitat at what it cost to build (their original loan amount). All of these are designed to prevent foreclosures against Habitat for Humanity homes.

In 1976, Millard and Linda Fuller started Habitat for Humanity and it has since grown to an international organization, headquartered in Atlanta, Georgia. Every area with a Habitat for Humanity project has a local chapter that oversees and manages the projects, homeowner selection, and mortgages.

In 2005, Habitat had built over 200,000 homes over its lifetime as an organization, housing over one million people. Options exist for homeowners who are in financial trouble and cannot pay back their Habitat for Humanity mortgage loan. Avoiding foreclosure is one of the goals of the organization. Homeowners can sell the home back to Habitat for its building cost, work sweat equity with the organization as a volunteer to make some of their payments, or otherwise work with their local chapter to keep out of foreclosure.

Some cities and states have Habitat for Humanity Mortgage Foreclosure Prevention Programs, providing advocacy, counseling, and referrals. Sometimes they offer financial help for families that are behind in mortgage payments. Groups have found, through study, that it's cheaper to prevent a foreclosure than it is to enforce one and is not only better for the organization, but better for the individual involved as well. Foreclosed homes often sit vacant for months, losing value and causing drops in value for those around them.

Occasionally, though, foreclosures do happen despite all of these efforts to stop them. Often, homeowners have not made payments for several months (even a year) and sometimes may have abandoned the home as well. These rare occasions are when foreclosures can happen on a Habitat for Humanity home.