Update on Habitat Edmonton’s New Mortgage Model

Habitat for Humanity is a non-profit organization working towards a world where everyone has a decent place to live. We work to build affordable housing for low income families, including those who have faced barriers to homeownership due to racial and social injustice.

For several months Habitat for Humanity Edmonton has been working through a legal dispute with some of the families we serve. We wanted to provide some information for the families, our community and supporters to let them know what’s taken place and how we have worked to try and come up with the best resolution possible for everyone involved.

Fortunately, many of the families involved have now made the decision to move to mortgage under this new model. We are pleased that these families are choosing to remain in the program of affordable homeownership and are confident that the advantages the new model offers will improve their lives in the long run.

The disagreement has related to how we structure the mortgages for the families that participate in our program. Over the years we have had several different ways of funding and administering our mortgages. The way we structure mortgages has periodically changed to meet the needs of the families we support, and the funding realities we are dealing with to ensure we can continue our important work, but we have always ensured that Habitat families pay no more than 30% of their household income for monthly housing costs.

Several months ago we updated our mortgage model again, so that 50% of loans received were at a 0% interest rate and 50% were funded at a lower than market rate supported by a local credit union.  While we used to offer mortgages fully at a 0% interest rate this was no longer sustainable and affordable for the organization and if we would have continued on we would have had to stop building any new homes in Edmonton, at a time when they are badly needed.  You can see more details about our new mortgage model here.

In looking back, we acknowledge that we could have been better at communicating that mortgage terms are only offered at the end of the tenancy period, and that they may be different from mortgages that others in the program have signed. Any perception that we might have created that we are not acting in what appears to be the families’ best interests is unfortunate, and regrettable. We have taken steps to ensure better communication to future families who apply for the program.

The solution we put forward was the best option available. There are some important points to note about it:

  • Families’ monthly payments remain the same. We made sure the new mortgages were no more of a financial strain on the families we serve than the previous mortgages.
  • There is still no downpayment required under the new mortgage model.
  • Families will continue to pay no more than 30% of household income for monthly housing costs (i.e. mortgage, taxes, insurance, and condo/program fees).
  • Because half of the mortgage is with a financial institution, families can build a credit history making it easier to qualify for a mortgage in the open market when they decide to sell their Habitat home.
  • If the value of the home increases families will enjoy increased value, up to a 3% shared appreciation, something they did not receive previously. This amount more than offsets the cost of interest if families stay in their homes for eight years or more.

Over the past two weeks most of the families involved in the litigation have met with us to discuss how they would like to move forward, either in purchasing the home or leaving the program with our financial support. In almost all cases we are continuing to offer them mortgages to buy the homes they have been renting and their monthly payments will not change if they choose to move to a mortgage. We very much would like to see them remain with our program and think it can benefit them greatly, but ultimately that is up to them and we continue to reach out to the families to discuss their options and the process of moving to mortgage.

To accommodate families whose religious affiliation prevents them from taking on a mortgage with interest, we have also worked to develop an exception mortgage to address this issue, which remains available for families to apply to upon request. This is a first of its kind initiative that we are glad to have been able to pilot and will assist other families in similar circumstances. The families will have to meet certain requirements, such as not having taken on other interest bearing loans, but provided they meet these requirements this will offer an option that addresses these individual concerns.

There are also a few families who unfortunately would not have qualified to continue with our program under the previous mortgage model or the current mortgage model because of a variety of personal circumstances. Even under our program, homeownership involves costs that not everyone can take on. For these families, we have worked with them to extend their tenancy whenever possible to help with remediating their credit or employment, or to transition to other alternative housing options if possible.

For those families who are choosing to exit the program, we are offering support to make the transition as seamless as possible. We’re confident that what we’ve put in place for the families involved is fair and equitable. Also, by making these critical changes, we will ensure the ongoing financial viability of Habitat Edmonton and the ability to continue delivering greatly needed affordable housing solutions in our community.

Home in South Edmonton.

Kadra is ecstatic about her new life at Neufeld Landing, a Habitat development in south Edmonton. She is married to Abdul, and they have two children: Tasleem, their 9-year old daughter, and Hamdi, their 5-year old son. She spoke about family walks, getting to know the neighbourhood, and having great family discussions over food grilled on the BBQ. At their apartment, barbecuing wasn’t possible, but now they can enjoy it all summer long. Also, both Tasleem and Hamdi are avid swimmers who feel at home in water.

Before Habitat, Kadra and Abdul found themselves in a similar situation to many families in Edmonton: trying unsuccessfully to save for a down payment due to high rent costs and other factors. Kadra and Abdul found themselves yearning for a better life without any means of making that life a reality. There was no foreseeable exit from the apartment they had been renting for eight years.

Abdul had a friend whose family was living in a Habitat house, and his friend encouraged them to apply. Kadra and Abdul were both working parents who really wanted to own THEIR OWN HOME. They had little hope that they would be accepted into the program, but they applied any way. Kadra recalled the day they received the call from Habitat Edmonton:

“You have no idea! I was so excited when they told me that they had a house for us! I asked Habitat, ‘are you sure we are accepted?’ We set up an appointment to meet and I didn’t sleep the whole week until we met with them. I called my husband and was screaming on the phone! We’re in! We got a home!”

Kadra was excited to start her 500 hours of volunteering, but some of it was postponed due to COVID-19; however, there was an opportunity to deliver flyers for Habitat, so her and her kids pounced on the opportunity.

“Home ownership is peace of mind,” said Kadra. “Not worrying about getting kicked out, no rent raises, or wasting my money… I can stay in this Habitat house as long as I want and I’m building equity.”

Kadra was speechless when she walked into her home for the first time. She said that words escaped her. She was overjoyed because it was her first home.

“My son was the most excited; he couldn’t run around in our apartment,” said Kadra. “When we moved in, the first thing he did was run around the entire house. He said, ‘Mom, are you going to stop me from running?’ I told him, no! Go!”

Kadra and Abdul thank the many people who made it possible for them to own a home.

She said, “My husband and I couldn’t even have imagined a house like this, but Habitat transformed our lives 100 percent.”

Around the world for Habitat

*Please note that due to COVID-19, all Global Village trips have been cancelled until the end of 2020. 

 

In 2015 two incredible people entered the Habitat for Humanity world: Kerry and Rudy Buchfink. They discovered the Habitat program in 2015 and have volunteered multiple times per year in countries across the world. Since 2015, they have been on a staggering 19 Global Village trips!

Where have they been?

Armenia, Chile, El Salvador, Guatemala, Honduras, Indonesia, Macedonia (x2), Nova Scotia, Nepal, Nicaragua (x2), Poland, Portugal (x3), Prince Edward Island, Trinidad, and the Yukon.

“I’m not sure what we’d be doing if we weren’t building homes with Habitat,” Rudy joked, “We already walk our daughter’s dog 2-3 times a week. If we weren’t building homes we’d probably double that number and take a small vacation once a year.”

Habitat changed their future of dog-walking into building homes for families in need. In 2015, the couple boarded a plane for their first Global Village build, which was in Portugal. The project was a renovation, and Rudy spoke fondly of their first time experience on a Habitat build site.

“When we arrived on site, we saw that [the renovation] was a big job,” said Rudy. “The homes needed everything from trenching to removing the old roofs. We mixed cement in a wheelbarrow and the work was HARD, but the hosts were well organized and so we were making huge progress throughout the day.”

Kerry noted that when they first arrive on site, they immediately notice a language barrier. However, everybody laughed so much while they tried to understand each other that it added a new element of delight to the experience.

“The groups are happy to have you there and they bend over backwards to help YOU in any way they can,” said Kerry.

It was difficult for Kerry to select one trip as a highlight, but she did remember building in Nepal as a neat experience. “Baby goats were born every day on our build site – yes, goats! We also had to take jeeps to the build site because some of the roads were washed out. I’ll remember that build.”

Rudy likewise had a special trip, and that was his trip to Indonesia, “Building the homes was a real community effort. Everyone – even the kids – pitched in to learn construction and to learn English. Habitat helps families get homes; worthwhile homes that they are proud of.”

The couple was surprised by how they were accepted so quickly by people who didn’t even know them – both in the community and on their build teams. It is fair to say that Global Village has changed the Buchfink’s lives as much or more than the impact they have had on the people in the countries they have visited.

 

*Although Global Village trips have been cancelled to the end of 2020 (and, unfortunately, the Buchfink’s September Global Village trip to Romania was cancelled), you can still read up on Global Village to see what is all involved. https://habitat.ca/en/volunteer/build-globally

 

 

Amanda and her family move into a Habitat home in St. Albert.

A surreal experience: Sabrina’s journey to home ownership.

Sabrina and her sons received their Habitat house keys in December of 2015.
Sabrina and her sons at their home at Neufeld Landing in Edmonton.

On a chilly December morning in 2015, Sabrina and her two sons arrived at Neufeld Landing, the biggest Habitat build in Canadian history. Their anticipation was brewing – it was “key day”: they were about to receive the keys to their new Habitat house in the 64-home development. Her partnership with Habitat required that she volunteer 500 hours and she had completed those hours and was ready to reap the rewards of all her hard work.

A few months earlier, life was different; it was much more difficult. Sabrina had lived in small condos and she wasn’t sure if she would ever be able to afford a house for her sons. She had heard about the Habitat program through her cousin, who encouraged her to apply. Her research led her to an information session, where she learned all the details of the Habitat program. Sabrina was invited to apply, and she submitted her application.
Weeks passed and Sabrina thought that she was likely passed over for another family in need. However, she decided to call the office to inquire. A Family Services Coordinator politely answered the phone. Sabrina asked her about her application and wanted to know how she could improve it for next time and to see why she wasn’t selected. The Coordinator quickly thumbed through her notes and said, “Actually, you have been approved. We were making our calls today. Congratulations!”

Shortly after she received the news, Sabrina began working her 500 volunteer hours, the majority of which she completed at the Habitat ReStore East. She helped unload donations and cleaned them before bringing them out to the sales floor. While completing her hours she met many volunteers and donors for whom she is extremely grateful.
When Sabrina received her house keys, joy filled her entire being. However, nothing could prepare her for how she would feel when she walked into her home. When the door opened, there was light everywhere! In her old home there were no windows in the kitchen, but here, in her Habitat home, there were many more windows for sunlight to pour through. In her words, the experience was “surreal”.

Today, life is much different for Sabrina’s family. Sabrina has strength; and stability. She is building a solid financial foundation for her and her sons, who are now 19 and 16 years old instead of 14 and 11. They’ve grown in myriad ways. They love their independence. They speak of how their old homes felt like hotel rooms, but how their Habitat home in Neufeld Landing feels like home. Indeed, they have a promising future ahead.

When they shut the door behind them to take their dog Waffles for walk, Sabrina and her sons are grateful to be homeowners. Whether they are enjoying their favorite family pastimes: playing board games, enjoying the outdoors, sitting around a campfire, or cooking together, they always know that, as Habitat for Humanity’s founder once said, they have a safe place to rest their heads on terms they can afford to pay.

Nine wonderful years in Anderson Gardens.

In August 2011, Getahun and Ergo received keys to their Habitat home in Anderson Gardens.
Nine years later, Getahun, Ergo, and family are still thriving in their Habitat home.

Nine years.

That’s how long Getahun, Ergo, and their 15-year old daughter and 13-year old son have been living in their Habitat home. Although they received the keys to their home on a warm August morning in 2011, their journey towards home ownership began years before.

Getahun and Ergo had moved from Brandon, Manitoba, a few years earlier and Getahun secured a job as a health-aide with Capital Health. During his time as a health-aide, he was asking his coworkers about social housing, as he and his family had lived in social housing in Brandon before their relocation to Edmonton. Instead of directing him to social housing, they told him he should look into the Habitat for Humanity program.

“What is Habitat for Humanity?” asked Getahun, not knowing that his question would lead to a better future for his family.

The couple explained Habitat’s affordable home ownership program, and so Getahun and Ergo went to the website to see if their family qualified for the program and – to their amazement – they did! After an information session, Getahun and Ergo submitted their application to become homeowners. Getahun recalled how Habitat came to the house they were renting in downtown Edmonton not once, but twice. He knew they were ensuring that Getahun and Ergo would take good care of a Habitat home should they be accepted into the program.

Soon thereafter, the phone rang. It was Habitat, and they told Getahun and Ergo that they were approved!

“We were really very happy because of the stability the home would provide for our family, and it was near my work,” said Getahun.

Once they were accepted into the program, Getahun strapped on safety boots and began volunteering his 500 hours at his future home: Anderson Gardens. His hours were filled with joy and he made special friends on the build site.

“I really appreciated the donors and volunteers,” said Getahun. “One said he’d volunteer his life for Habitat because the families deserve to be homeowners.”

It was a magical morning in August 2011 when the family received their keys, which were presented by Ken and Margaret Anderson, the generous couple who donated the land at Anderson Gardens to Habitat. At the time, Getahun’s and Ergo’s children were 5 and 7, and they were running around the house teeming with excitement – especially when they saw their new rooms.

Getahun said:
“Our children were and are very happy with our home and where we live. It is a quiet place and our neighbourhood is really great too. I am so thankful for Habitat because the opportunity has changed our lives. It gave me the opportunity to get my LPN (licenced practitioner nurse) and better our lives. My children have had a great place to live. I thank all the volunteers and donors who give to help families who are struggling to make their lives better and to help our children become more successful.”

Getahun mentioned that he didn’t have the words to say to express how much Habitat has done for his family. He wanted people to know that he is grateful for all that supporters have done to improve his family’s life.

Shelly’s Story

My name is Shelly, and I have two daughters. We own a Habitat “buy back” home in Edmonton’s Kirkness community. About four years ago I heard about Habitat for Humanity and how the program helps families. I did some research and realized, wow, the program had helped so many families get a new fresh start. I was amazed and thought an opportunity like the Habitat program would be so great for my daughters and me. Before Habitat, life was okay, but I never felt like we had a stable home because with renting you just don’t have stability.

I was renting an old home that was very cold in winter. I had to put plastic on the inside and outside of my windows to keep the cold out. We rented this house because it was all I could afford, and the rent was 50% net of what I was paid at work. Before being accepted into the Habitat program, owning my own home was only a dream. Now I own a beautiful, bright, clean, warm, safe and stable home, and it is my dream come true. To me, the most important thing about being a homeowner is safety and stability for my daughters and me. I have had many positive and fun experiences while completing my 500 volunteer hours, including meeting all those nice friendly volunteers at Habitat.

I remember my very first 8-hour shift at Restore North. My youngest daughter and I went to the lunchroom and saw a bulletin board with our family’s picture on it and it said “future homeowner”. I started to cry, and I said to my daughter this is real. The past few years I have shed more than a few happy tears. I am so, so thankful for all the hard work Habitat staff and volunteers do to make dreams like mine come true. Since owning our Habitat home life has been GREAT for us!

For those of you who support Habitat, thank you for all the amazing things you do to help families! All of us are grateful for all you do and are grateful that you are people with very big hearts.