Habitat for Humanity Edmonton reaches agreement with partner families over mortgage dispute

Habitat for Humanity Edmonton says it has found a solution to an ongoing dispute over new mortgage rules for partner families.

Last year, the non-profit organization announced it was overhauling its mortgage program as a way to try to stay afloat due to the $27-million debt it was facing. In April, the local chapter of Habitat for Humanity said it had worked out a new mortgage model that would see 50 per cent of the mortgages coming from a bank with interest, and the other half remain at zero per cent interest.

Dozens of partner families were opposed to the new mortgage rules, worried they wouldn’t be able to keep up with the payments.

A lawsuit was filed but early last week, the two sides met with the help of a mediator, where both sides say an agreement was reached.

“The families are getting what they asked for and Habitat is recommitting to that relationship with families,” said Avnish Nanda, a lawyer representing the partner families.

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“Families are overjoyed. This is what they’ve been fighting for for over a year.”

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1:59 2 groups back residents fighting Habitat for Humanity in Edmonton

The chair of the board of directors for Habitat for Humanity Edmonton said an agreement was reached in which partner families will once again have access to the original interest-free mortgage.

Chris Bruce said families still have the option to go with the mortgage model and they also have the ability to leave the program if they desire.

“We also set up a fourth option to work with families who have faced challenges since they entered the program — be they income requirements, perhaps problems with credit as a result of COVID or before COVID — and we feel there’s a solution there for every family.”

Bruce said Habitat for Humanity started the two-day mediation last week with an apology to all of its partner families.

“We really are very sorry about the path that we’ve been on,” Bruce said. “Our apology is sincere. We really are looking to rebuild our relationships, not just with the family partners, but with all the communities we deal with.

“We have a lot of work to do. We’re really committed to regaining the trust of our family partners.”

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Nanda said the court still has to approve the settlement. Habitat for Humanity also committed to setting up a community advisory council, made up of several community groups, to ensure it is connecting with and serving its partner families.

Habitat for Humanity works to build homes for those who struggle to save for a down payment on a traditional home. Instead of a monetary down payment, families must put in 500 hours of work — or “sweat-equity” — on their future home. In return, families received mortgages with no interest entirely financed by Habitat for Humanity.