Habitat for Humanity seeks shelter from QM
Says mortgage rules could block affordable lending pipeline
The Dodd-Frank mortgage lending rules are not just impacting private sector banks. Housing nonprofits also are seeking shelter from the qualified-mortgage rule storm.
How severe the issue will be is somewhat unknown, but industry leaders appeared before the House Financial Services Committee Tuesday to share their concerns.
One of the parties desiring changes is Habitat for Humanity. The nonprofit, which is known for providing families with affordable housing, warned that regulations "threaten the survival" of the group's self-help homeownership model.
Habitat CEO and president Frank Spencer said his nonprofit was never the target of regulators, but it's definitely in their crossfire. Points and fees requirements and the qualified mortgage rule create a situation in which lenders may be more reluctant to serve homeowners requiring flexible lending solutions.
In a blog on the Habitat for Humanity website, the organization’s director of state and local relations highlights the nonprofit’s many concerns.
"Habitat partner families by design do not qualify under standard underwriting guidelines used by banks and other private lenders," he wrote. "So there is significant risk that Habitat’s successful mortgage model will not be included in the new qualified mortgage ability-to-repay definition. Banks and state housing agencies would then be precluded from partnering with Habitat affiliates since non-qualified mortgage loans would face significantly higher liability risks."