Habitat for Humanity of Michigan

To permit a state to exempt, from certain registration or licensing requirements, any charitable organization exempt from federal tax (including their employees and agents acting as loan originators), IF the organization: (1) executes loan originations in order to promote or facilitate homeownership for certain low-income, disabled, or other disadvantaged persons or families; (2) offers loans at interest rates lower than the bank prime loan rate, or that are no-interest loans or loans with interest rates significantly below those for loans to purchase generally available single-family housing; and (3) does not otherwise engage in the business of a loan originator or mortgage broker.

 

PA 340 - Nonprofit Houses. Establishes that the price at which Habitat for Humanity or a similar charitable organization sells a house to a low-income person to be the true cash value of the home for purposes of assessing property tax (SB 283). It took nearly four years, but a bill supported by Habitat for Humanity of Michigan passed into law as Public Act 340 on Dec. 21, 2010. The bill was Introduced by Senators Jelinek, Jansen, Richardville, Pappageorge, Van Woerkom, Kahn, Hardiman and Brown and was referred to the Committee on Finance. Senator Ron Jelinek sponsored the bill. The bill amended the General Property Tax Act to specify that the purchase price paid in a transfer of eligible nonprofit housing property from a charitable nonprofit housing organization to a low-income person would be the presumptive true cash value of the property transferred. The intention is to keep property taxes affordable for low-income families who buy homes from charitable organizations in situations where the assessor values the home higher than the price the nonprofit sold the house to the family.

 

The bill amends the S.A.F.E. Mortgage Licensing Act of 2008 to permit a state to exempt, from certain registration or licensing requirements, any charitable organization exempt from federal tax (including their employees and agents acting as loan originators), IF the organization: (1) executes loan originations in order to promote or facilitate homeownership for certain low-income, disabled, or other disadvantaged persons or families; (2) offers loans at interest rates lower than the bank prime loan rate, or that are no-interest loans or loans with interest rates significantly below those for loans to purchase generally available single-family housing; and (3) does not otherwise engage in the business of a loan originator or mortgage broker.

 

A ceremonial bill signing of HB 5786, attended by Governor Granholm, Rep. Bill Caul (sponsor), Habitat Michigan COO Sandy Pearson, Habitat Michigan Chairman Bob Filka and several Michigan affiliates, was held July 19 at the Capitol. The bill, now Public Act 109, exempts ReStores from real and personal property taxes. Prior to the bill’s passage into law, some local tax assessors would grant an exemption to Habitat affiliates that own ReStores, while other assessors would not. Exempting all affiliate-owned ReStores from the property tax allows more dollars to be invested in housing construction and rehabilitation, puts more money back into the economy in the form of taxes paid by the residents and keeps reusable material out of landfills. Habitat Michigan is especially thankful to Isabella HFH and Rep. Caul for getting this bill passed into law. Caul introduced the bill after receiving a phone call from Kathleen Moore of Isabella County Habitat for Humanity. A video of the bill signing is available on YouTube at http://www.habitatmichigan.org/videos.

 

Public Act 612 of 2006 allowed local tax collecting units to exempt certain nonprofitowned residential property from taxation. Specifically, this exemption applies to single family dwellings or duplexes owned by charitable nonprofit housing organizations ultimately intended to be transferred to persons with a family income of not more than 80% of the statewide median gross income and who meet other qualifying criteria of the charitable organization. The exemption remains in effect for two years, until the property is occupied, or until a transfer of ownership, whichever occurs first. PA 612 was an amendment to the General Property Tax Act.