Foreclosures Providing Homes to Those in Need

In the midst of the recent foreclosure crisis in the US, the enterprise of Habitat for Humanity has been able to take advantage of some serious buying opportunities in neighborhoods affected by the US mortgage meltdown. They've been buying up many properties and some for less than half price.

For those of you who don't know much about Habitat, it's an enterprise with about 2,300 affiliates in some 100 countries and in all 50 states. Habitat for Humanity is a $145 million-a-year business based in Americus, GA. The main focus of Habitat for Humanity is to build and they do build nearly 25,000 homes a year for people who earn 25% to 50% of their area's median income. In return, recipients commit to a monthly mortgage payment, contribute about 10 weeks of labor to build their home or others in the community, and make a down payment of $100.

Now, whether or not this recent opportunity for Habitat is an ethical one seems to be raising some debate. On one hand, you have an enterprise which happens to be a charity based on providing housing to those in need, that is profiting from an economic crisis that has forced thousands of families from their homes. In some ways it seems not a very moral way to go about fetching properties. But, on the other hand you have Habitat officials who do not see the situation as an ethical dilemma in the least. From their perspective putting families in need into affordable housing is much more pro-active then letting these neighborhoods remain vacant or even worse having slum landlords take over.

Other criticisms of Habitat suggest that they aren't able to deal with homeowners problems once they take ownership- that they are soon out of the picture leaving the new homeowners to fend for themselves with monthly mortgage payments etc. Some therefore argue whether or not these housing solutions are the best approach to housing America's poor and underprivileged. What has also become a problem in the past is Habitat home owners going to alternate lenders/brokers to re-finance their homes. Many are not aware that they're currently paying no interest and that although they may be able to free up some cash flow by re-financing, their monthly payments with accruing interest may now be well out of their league.

In previous years during the housing boom, it had become harder and harder to for Habitat to do its job well. But today, there are many major purchases in the works. The Habitat affiliate in Phoenix is closing in on a deal buy a 20 home development that was left by a company that went bankrupt. The city of Milwaukee is purchasing condo units in one larger complex and selling them to Habitat for about $5000. Habitat volunteers will renovate them and Habitat will sell them to buyers for $25,000.

Working its way through Congress is a legislation that could help non profit housing agencies like Habitat take further advantage of the housing/foreclosure crisis. One particular bill would send $15 billion to various states for the purchase and improvement of foreclosures. Bush administration has threatened to veto this particular bill.

Regardless of criticism it is no doubt that the foreclosure market has provided innumerable opportunities for Habitat for Humanity.