God’s Interest Rate
Habitat Core Value #3: Not to Profit from the Poor.
From Habitat for Humanity in Whatcom County Executive Director John Moon.
homes for what it costs us to build them, and we finance them for our partner families at 0%. We call this “God’s Interest Rate.” It’s about human dignity and building community. Here are the numbers supporting Habitat’s biblical economics:
The most recent home that Habitat built in Bellingham was appraised at a modest $230,000. But the homeowners’ total repayment cost over 30 years will be just $133,891. Their monthly mortgage payment is $299.48 each month, a very affordable payment for Jaime, who works on a dairy farm, and his wife Leandra, a child-care worker, and their three young children.
A conventional buyer making a 20% down payment and getting market rate financing at 4.5% APR would pay $932.30 each month for the same small, simple, decent house. Over 30 years these owners would pay $401,629 on their mortgage.
What will Habitat homeowners like Jaime and Leandra do with $267,737.42 worth of labor costs, market inflation, profit margin, and loan interest that they are saving over 30 years? Several hundred extra dollars each month can be transformed into better nutrition and access to healthcare. These basics, in turn, support better access to education, and the ability to save – for childrens’ college, for retirement, for emergencies.
The power of God’s 0% interest rate elevates families out of poverty forever. A monthly Habitat mortgage payment not only adds to a homeowner’s estate but provides a sustainable revenue stream so that Habitat can continue building more homes each year.