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July 12, 2012

Habitat for Humanity Fears Impact of New U.S. Mortgage Rules

Habitat for Humanity is raising concerns over proposed federal mortgage-lending regulations the national housing charity fears ill hinder its work helping low-income families build and buy their own homes, according to The Wall Street Journal.

The Consumer Financial Protection Bureau, established to stamp out dubious lending practices blamed in part for the 2008 financial crash, is considering restrictions on what proportion of their income borrowers can spend on housing loans and other debt.

Habitat officials say this could affect one of the charity's signature programs, which requires participating families to help build or renovate their own homes, donating "sweat equity," in exchange for no-interest mortgages with low payments.

If the consumer agency sets debt-to-income levels low enough, Habitat borrowers could be excluded from securing loans, hindering the organization's "unmatched ability to enable low-income families to become homeowners," the charity said in testimony submitted to a congressional panel Wednesday.