Habitat for Humanity gets $40M Wintrust mortgage financing commitment

The new program, set to launch July 1, is a departure for Chicagoland Habitat and its eight Chicago-area affiliates, which previously financed and serviced homeowners directly through zero-interest loans.

The Wintrust investment will finance about 250 Habitat homes over the next four years, nearly doubling the projected number of affordable new and rehabbed homes to be made available in the city and suburbs.

“Our goal is to serve more families in the Chicago area,” said Matthew Moy Johnson, CEO of Chicagoland Habitat for Humanity. “We’ve got to do something different, and we’ve got to try new things.”

Launched in 2010 as a support organization, Chicagoland Habitat oversees the financing and administrative work for the Chicago-area affiliates, which have been building homes for decades from Lake County to Will County.

Last year, Chicagoland Habitat served about 175 families and built or rehabbed about 70 homes, Johnson said. Its annual budget is $16 million, with about $10 million devoted to building homes.

The Wintrust financing commitment will build another 60 homes a year. The average Habitat home in the Chicago area costs about $150,000.

While most Habitat homes go up in the suburbs, 16 homes are being built in Chicago’s West Pullman neighborhood, Johnson said.

The Wintrust partnership was modeled after a program launched in March by the Twin Cities Habitat for Humanity in Minnesota, which partnered with Bremer Bank to buy up to 500 below-market mortgages over four years.

As part of the program, Rosemont-based Wintrust Mortgage will offer $40 million in fixed-rate, 30-year mortgages with annual interest rates ranging from 2 to 4.5 percent, based on the applicant’s income.

Homeowners will spend no more than 30 percent of their income on housing, ensuring affordable mortgages, Wintrust Mortgage President and CEO David Hrobon said.

Meanwhile, farming out the financing will free up Habitat to focus on its primary mission: building new homes, Hrobon said.

“We take over this responsibility for them, and it enables them to put more of their time and financial resources toward building homes as opposed to financing them,” he said.

While Chicagoland Habitat will continue to offer zero-interest loans as well, it is looking to the Wintrust partnership as a blueprint for the future.

“We are transitioning away from zero percent to talking about affordable interest payments for families in need,” Johnson said.

Founded in 1976, Georgia-based Habitat for Humanity International and its affiliates help families in need build and improve their homes through volunteer labor and donations. The nonprofit Christian housing organization operates in more than 1,300 communities in the U.S. and more than 70 countries worldwide.

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