Hagan Introduces Bill To Help Nonprofits Provide Affordable Housing

Press Release

U.S. Senator Kay R. Hagan (D-NC) this morning introduced a bill to give states the flexibility to exempt nonprofit housing organizations, such as Habitat for Humanity, from costly regulatory requirements. The Nonprofit Mortgage Licensing Clarification Act of 2010 is a companion to the House bill H.R. 4400, introduced by Rep. Heath Shuler (D-NC). Both bills have bipartisan support, and every member of the N.C. Congressional Delegation has joined as a co-sponsor.

"This is a bipartisan bill which will ensure that nonprofits, such as Habitat for Humanity, can continue to help struggling American families purchase affordable homes," Hagan said. "These nonprofits should not be burdened by these costly requirements which were intended for for-profit lenders."

The legislation is intended to help nonprofits provide affordable housing. In 2008, in response to the mortgage crisis, Congress passed the SAFE Act. This legislation included additional bonding and licensing requirements for all loan originators in an effort to prevent future market instability. The legislation was intended to curtail abuses at larger, for-profit lenders; however, complying with these expensive requirements has endangered many small to mid-size Habitat affiliates.

Many states have expressed an interest in exempting some nonprofits, like Habitat for Humanity, from the requirements of the SAFE Act. These nonprofits offer low or no-interest loans to families in need of affordable housing. To this point, states have been advised by the federal government that exempting these nonprofits is against the law. The Hagan bill explicitly gives states the ability to do so.

"I am pleased to support this bipartisan effort of the North Carolina delegation to ensure that organizations such as Habitat for Humanity can continue their mission of providing affordable housing across North Carolina and the nation," said Sen. Burr. "Our state is truly blessed by its 85 local Habitat for Humanity affiliates. As our state has experienced first-hand through volunteers, donors, and homeowner families, the hours of sweat equity put into a Habitat for Humanity home benefit our communities by putting good people into good, affordable housing."

"Organizations like Habitat for Humanity partner with struggling Americans to provide them with an opportunity to become responsible homeowners. Because of this unique partnership, foreclosure and default rates on Habitat for Humanity loans are currently and consistently well below national rates," said Rep. Shuler. "I am encouraged by the strong bipartisan support for this bill that this legislation has received on the House side, and I am eager to continue working on both sides of the aisle in the House and Senate to ensure that qualified organizations like Habitat for Humanity can continue their important work."

In 2009 alone, N.C. Habitat for Humanity affiliates built or repaired 427 houses. In addition to Senators Hagan and Burr, cosponsors of the bill include: Jeff Merkley (D-OR), Johnny Isakson (R-GA) and Saxby Chambliss (R-GA).

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