Dealing with new government regulations is never easy to do or to understand.  Here’s our best effort to explain what we need and how you can help.

In the simplest terms:

• The Federal government passed a regulation (the S.A.F.E. Act) to require all mortgage lenders to be registered and licensed
• Each state is required to implement their own S.A.F.E acts to assure these regulations are upheld.
• The regulations were intended to harness in for-profit lenders, HOWEVER neither the Federal nor the Illinois State Act exempts Not-for-Profits such as Habitat from these regulations.
• Licensing & registration is expensive – set up fees, annual fees and in some states per-loan fees apply
• The program goes into affect July 31, 2010
• If a change is not made at the Federal or State level Habitat’s ability to provide housing for low-income families will be significantly impacted.

How you can help
Federal level

• Contact your House and Senate representatives
• Ask them to support Representative Heath Shuler’s proposed Bill #H.R. 4400 which exempts 501(c)3 nonprofits who:
• Make mortgage loans to promote home ownership for poor or low income, disabled, or other disadvantaged individuals or families; and
• Offer mortgage loan rates that are lower than the bank prime rate or that are no-interest loans (This is what Habitat does), or loans with interest rates significantly below the interest rates generally available in the market; and
• Are otherwise not primarily in the business of soliciting or brokering mortgage loans

State level
The original Illinois State Bill HB4011 included the exemption detailed above.  Unfortunately Amendment #3 to this bill DELETED THE EXEMPTION.

• Contact your Illinois State Senator and Representative
• Ask them to reinstate Section 5,  Sec. 1-4, subsection (d) of state bill HB4011 which states:
• A nonprofit organization that is recognized as tax exempt under 26 U.S.C. 501(c)(3) whose primary activity is the construction, remodeling, rehabilitation or homes for sale to and or use by low-income families is exempt from the Section provided that:
  (A) the nonprofit organization makes no profit mortgage loans to low-income families and
  (B) no fees accrue directly to the nonprofit organization from those mortgage loans

Below are links to sample letters.  Please remember that a voice and your personal feelings regarding Habitat and these bills can make a real difference!

Sample Letters

Federal
State of Illinois

To find the contact information for your representative

US Senators – click drop down box at the top right-hand corner

US House Representatives – enter your zip code in the box at top left-hand corner

IL State Senators & House of Representatives