Habitat for Humanity Michigan Fund


Investment Summary

Investment Market: Michigan
Type of Investment: Debt
Date of Investment: 6/5/12
SCF Investment: $66, 000
Investment Term:                              2 year
Organization Loan Average:              $45, 000
Organization Mortgage/Loan Term:   20-30 yr/0%


SCF Investment Narrative

SCF is providing $66, 000 in seed capital for a new $100,000 prototype model mortgage fund to be managed by Habitat for Humanity Michigan Fund (HFHMF). SCF is also requiring a matching grant of $34,000 from Habitat for Humanity Michigan (HFHM), one of the program partners.  This new model will vastly reduce the amount of capital needing to be raised from outside sources to build new of refurbish existing homes and will expedite the fund payback in under 30 days as opposed to the standard 20-30 year mortgage payback. Once funds recouped  by HFHMF they will be quickly  recycled to fund a new home project– thus the volume of home building undertaken by participating HFHM Affiliates will be vastly increased.  Other partners in this model initiative include Habitat for Humanity Michigan, Great Lakes Capital Fund, and Michigan State Housing Development Authority.


Area Needs Profile

Stats for Michigan:
Persons below poverty level: 14.8% (US is 13.8%)
MI Unemployment 6/12: 9.2%
Foreclosure Rate : 1 in 518


Recipient and Organizational Profile

Recipients: Habitat for Humanity Michigan Fund provides mortgages for people below 60%-80% AMI that have been screened by HFHMF and their local affiliate program that will be working with the borrower long-term.


Organization: HFHMF has served as a national model since its inception in 2007, and still remains unique in its mission of providing mortgages to all of the state of Michigan’s 76 affiliate Habitat for Humanity organizations. It currently manages a mortgage portfolio of over $61 million of homes across the state. Currently HFHMF is the only mortgage provider that is a licensed mortgage lender and servicer with the State of Michigan.  Under Michigan law mortgages can only be originated by a licensed loan officer employed by a licensed lender.  Additionally, any organization servicing more that 10 mortgage loans must be either licensed by the State or approved for an exemption.  In both instances, HFHMF has provided invaluable mortgage services statewide to Habitat organizations allowing them to remain compliant with Federal and State laws and regulations. Given the current mortgage crisis, it is also clear that having a licensed mortgage provider is so important, especially in the niche market that serves borrowers with such high vulnerabilities as the low-income market served by the Habitat for Humanity community of organizations.


“This new Mortgage Fund will revolutionize not only the method of financing low-income housing but the volume as well.”

-David Bird, President, Habitat for Humanity Michigan Fund