Troubled Homeowners Get Bridge to Private Charities
Support services provider, Foundation Source, launched today a new program for private charities to make unsecured, no-interest loans to individuals and families who are struggling to pay their mortgages. The new Mortgage Assistance Program can provide immediate financial assistance to homeowners under the threat of foreclosure. "The program taps into the generous spirit of the company's nearly 900 private foundation clients who have expressed a strong desire to extend the scope of their family philanthropy to include both traditional charities as well as individuals and families in need," read a press release on the program. Foundation Source says the Mortgage Assistance Program provides assistance as no-interest loans, known as program-related investments, not outright grants. As such, funds will be repaid to the foundation and will then be available for other charitable purposes. Under the program's guidelines, its loans count toward the foundation's annual five percent minimum distribution requirement in the year the loan funds are advanced. In future years, the minimum distribution requirement will be increased by the amount of the loan or loans repaid. The company says funds are paid directly to the financial institution holding the mortgage, either in a lump sum, in monthly payments or in a combination of the two. And loans are repaid in monthly installments for up to five years. "Program-related investments are an invaluable tool that private foundations can employ to help out in tough economic times," wrote Rob Wexler and David Levitt, principals with Adler & Colvin. "Typically, program-related investment loans are made to organizations. This program is innovative because it enables foundations to make loans directly to benefit individuals in immediate need."