Legal Question in Real Estate Law in Illinois

My mother has lived in her habitat for humanity house for 10 years. She is unable to sell the house until she has paid it off. She still owes 10,000 dollars before she completely owns the title to the house and the right to sell it.

Assuming she has a buyer for the house, is there some kind of contractual loophole that she could have with the potential buyer; stating that the buyer is paying 10,000 to my mom who has the right to buy the house. Then my mom would pay the 10,000 to Habitat for Humanity for the title. Now owning the title, she now sells it to the buyer for the agreed upon amount minus the 10,000 loan.

I have no clue if something like this can exist or if there is something similar that could help me.

A mortgage cannot be done with a bank die to the contract she has with Habitat for Humanity. So we are trying to find a way to have the buyer legally front the money so my mom who has the only rights to pay the remaining 10000 on the house to obtain the title. When she owns the title then the habitat contract is fullfilled and completed.

Any advice would be appreciated greatly.

Thank You


Asked on 7/29/14, 1:26 pm

1 Answer from Attorneys

Henry Repay Law Offices of Henry Repay

I have worked with two different Habitat for Humanity affiliates and understand the general Habitat program. It can vary some from affiliate to affiliate, but my impression is that there may be a misunderstanding concerning your mother's situation. There should not be any significant impediment to your mother selling her home.

There should be a mortgage on the property for the loan. Dealing with that upon a sale of the property should not be much different from the way you or I would deal with it if we were selling our homes. We would ask the lender for a payoff letter and at closing the remaining balance would be paid.

In your mother's case, the lender is probably the Habitat for Humanity affiliate. There may be a couple differences, however, from a typical mortgage loan. First, the affiliate may have a right of first refusal, meaning the affiliate must be offered the opportunity to buy the property or match any other offer. Second, there may be a variation in calculating the payoff to protect against Habitat homeowners profiting from a property for a certain number of years. In other words, an affiliate may sell a $75,000 house for $50,000 because that is the cost to build it. It would not be a fair use of the charitable transaction for the homeowner to immediately have that profit built in. So, there is often a term during which the homeowner must remain to start gaining the added equity in the property.

In any event, the simple answer is that your mother should be able to sell. It would be more a question of how the payoff is calculated, not that she cannot sell. She should contact the affiliate and walk through the process.

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Answered on 7/29/14, 1:28 pm


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