Habitat for Humanity

Interest-free Mortgage Living

Habitat for Humanity

Interest-free Mortgage Living

Habitat for Humanity

Habitat for Humanity are the only genuine affordable housing program which provides the benefit of zero-interest mortgage, mortgage payments that never exceed 25% of a low-income household’s income and builds hope and improves well-being of those families most in need. The Habitat model is remarkable as it combines the benefits of 500 hours of sweat-equity of the low-income families, volunteer labor, building materials, financial donations donations, and government affordable housing grant money into a interest-free home equity mortgage for the households most in need because of their low-income conditions (i.e. poverty). No interest is charged on the mortgage saving a low-income household thousands of dollars over time and making more disposable income available to them. The economic benefit to these families is that effectively enjoy the equivalent of a living wage thus solving one the key poverty issues: the lack of sufficient disposable income to live a good life. Habitat has figured out a way to architect a mortgage, cover its operating costs and forgo a profit providing not only low-income households but all of society with a measurable economic well-being benefit. (Source: Mark Anielski - Author, The Economics of Happiness: Building Genuine Wealth, Edmonton, Alberta, Canada)

Habitat for Humanity

The remarkable thing about the Habitat home equity model is that the mortgage is based on a family paying no more than 25% of their pre-tax household income. The conventional measure of affordable housing and poverty is when a family or individual is paying more than 30% of their income on housing. Remarkably roughly 1/4 of Canadian households (13.1 million) are currently spending more than 30% of their income on housing, thus would qualify for affordable housing programs like Habitat. In Alberta, an estimated 280,000 households would qualify for affordable housing programs.

Another remarkable features of a Habitat for Humanity home equity mortgage is that 100% of the mortgage payments are refunded to the family once they choose to move out of the Habitat home. That means that the family is able to take all of the equity they have built in the Habitat home and apply it to the purchase of a new home. Moreover, many of these families choose to move out and beyond their Habitat home as their economic conditions and income have improved. An increase in economic hope and well-being is another key benefit of the Habitat model. (Source: Mark Anielski - Author, The Economics of Happiness: Building Genuine Wealth, Edmonton, Alberta, Canada)

Ivo Valkenburg

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