The current mortgage model was set in place to ensure improved benefits for families, and to ensure that Habitat can continue to serve families sustainably and effectively. The following points demonstrate how the current mortgage model works:
- At the time they start their partnership with Habitat Edmonton, families’ total housing costs – including property taxes, condo/program fees, and insurance – for the Habitat program are no more than 30% of their household income.
- There is no down payment required to purchase a Habitat home. To demonstrate their willingness to partner with Habitat, future homeowners agree to volunteering 500 hours on build sites, in ReStores, Habitat offices, Habitat events, or affiliated charities.
- The current mortgage model provides families with access to capped market appreciation on the equity in their home. This benefit was not available in previous mortgage models and potentially allows families to exit the Habitat program with more equity than they would have under previous mortgage models.
- Habitat offers a portion of the mortgage at 0% interest to ensure affordability.
- Habitat brings a banking partner to the families and through this relationship the families will acquire a credit history. Previously, this was not a benefit that Habitat could provide. Families then pay a below market interest rate on this portion of their mortgage.
- Habitat has always worked with families who are working through financial hardships. We ensure that they can continue in the program, and will continue to do so by adjusting their payments.