Consumer complaint received 2016-11-26
Product: Mortgage — Other mortgage
Issue: Settlement process and costs — 
Company: HABITAT FOR HUMANITY INTERNATIONAL, INC. (MN)

I 'm writing to express concern about the lending practices of the non-profit housing organization Habitat for Humanity ( HFH. ) As a person who received a home from XXXX Minnesota Habitat for Humanity, I 've a unique perspective on the experience. I see a non-profit housing organization so focused on its mission to keep HFH in operation that they do n't see or turn a blind eye to the negative consequences it bestows upon families it works with. 
Quite simply, HFH is giving families keys to homes with underwater mortgages. HFH acts as it 's own realtor, appraiser, underwriter and lender. These homes are no more affordable than a traditional mortgage. They claim to offer no interest loans but it 's not the reality. HFH inflates the purchase price of a home in an attempt to capture interest. In my case they sold me a townhome for approximately $ XXXX more than it was worth. This leads me to a lot of questions ... Where is the benefit of families required 200hrs of sweat equity? What Is the actual cost to rehab or build each home? Why are families charged so much for homes when often a portion of the labor, materials, land and occasionally an existing home are actually donated to HFH? The math does n't add up for me. 
This practice sets families up with disadvantage disguised as a blessing. They pay higher monthly mortgage payments than they should because it 's calculated with inflated numbers. They are taking on debt far in excess of the purchase price ( or even the value ) of the home. This makes it nearly impossible to build up any real equity for years or even decades. They are essentially trapped in their situations. Partly because they are in over their head but also because HFH will not work with you if you have any difficulty paying your mortgage. These are the same sort of lending practices that big banks were reprimanded for during the recent Great Recession. I recently needed to sell my HFH home. I was lucky to afford a lawyer after first hiring a realtor and discovering the ugly truth about my mortgage. As you know, many low income families will be unable to afford a lawyer or may find the idea daunting. 
Also worrisome is HFH 's practice of failing to disclose figures until just before closing. A family has no idea about the price of the home, or payment amounts until days before moving in. I 'm also not fooled by HFH explanation of home repair emergency saving accounts as a reason for the higher mortgage payments. It appears just another way to squeeze money out of already low income and desperate families. 
Please do n't misunderstand me, I 'm not accusing HFH of doing anything illegal. In fact, the most disturbing part is that HFH practices are likely perfectly legal. They 're clearly looking out for the best interest of the non-profit, but what I 'd like them to consider is, although their practice ensures HFH continued success, it is ultimately doing a disservice for families. 
This has a slight odor of predatory lending. Not only for selling homes for more than their value but also for not properly disclosing to families that they 'll be paying more than the home is worth and thus be unable to sell for many years. The families that come to HFH are desperately looking for help. Most are low income without access to traditional mortgages. Many are immigrants or uneducated about the intricacies of home buying. 
I 'd like to ask that you please consider investigate HFH. Are they serving their charitable purpose or are they simply lining their pockets and acting as a mortgage lender disguised as a XXXX non-profit housing organization? Are they meeting their fiduciary duties such as acting in good faith and honesty? Please help ensure low-income families are put into safe and stable homes that are actually affordable instead of trapping them into mortgages they can barely afford.