Saturday, June 12, 2010

A Call to Action - The SAFE Act

For the past couple of months we've been faced with the possibility that the SAFE Act could effectively halt Habitat's progress in the mission of bringing safe, decent affordable housing to families in California. So what is the SAFE Act?

In 2008, the SAFE Act was passed as a part of the 2008 Housing and Economic Recovery Act. Under the SAFE Act, each state must set minimum standards for licensing mortgage loan originators. The SAFE Act was designed to affect for-profit loan originators and therefore is very multifaceted, with provisions for fingerprinting, background checks, outside training and coursework, surety bond requirements, and registration in a nationwide mortgage registry system. The multiple requirements under the SAFE Act will be extremely difficult for many small to mid-size Habitat affiliates and other significant non-profits to meet. Habitat affiliates will likely have difficulty in continuing their process of issuing mortgages if there is not more clarification under the SAFE Act.

Our Response
Habitat affiliates in California have requested an exemption through an interpretive opinion to the California State Department of Corporations. Representative Heath Shuler (D-NC) has proposed a legislative fix (HR 4400) to clarify that states have the authority to grant exemptions for specific nonprofit groups who meet certain requirements – specifically, 501(c)3 nonprofit corporations who:
• make mortgage loans to promote homeownership for poor to low-income, disabled or other disadvantaged individuals or families;
• offer mortgage loans at interest rates that are lower than the bank prime loan rate, or that are zero-interest loans or loans with interest rates significantly below the interest rates generally available in the market; and
• are otherwise not primarily in the business of soliciting or brokering mortgage loans.

Today I am here to thank all of you who supported our SAFE Act exemption efforts. For the time being, Habitat for Humanity has been exempt and your work to put pressure and keep this issue at the forefront paid off. This was truly an example of collaborative teamwork.

For more information on the SAFE Act, please visit

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