$2 million mortgage sale, employee engagement to support affordable housing for hardworking families
Associated Bank has purchased approximately $2 million in residential loan mortgages from Milwaukee Habitat for Humanity. It is the largest one-time sale of mortgages in the affiliate’s history, and the funds will support the organization’s five-year revitalization initiative in Milwaukee’s Washington Park neighborhood.
“The success of our neighborhood revitalization efforts relies on partnerships with businesses and organizations that have a strong commitment to building our community,” said Brian Sonderman, executive director of Milwaukee Habitat. “We are deeply grateful to Associated Bank for this opportunity to further our mission to build homes and hope in Milwaukee and to truly transform Washington Park into a safe, sustainable community of choice.”
Milwaukee Habitat plans to use funds towards its complete rehab program, which helps to address the neighborhood’s foreclosure crisis by turning vacant, city-owned foreclosures into decent single-family homes. Sonderman estimates that the mortgage sale will help to fund 25 rehab projects over the next five years.
Mayor Tom Barrett spoke about Habitat’s impact on the city’s foreclosure crisis Tuesday (4/21/15) at 11am. The press conference was held at 2119 N. 38 Street, a city-owned foreclosure Habitat has purchased and is rehabbing. Mayor Barrett’s STRONG Neighborhoods Plan, rolled out in 2013, focuses on preserving housing stock and stabilizing neighborhoods through a comprehensive approach: prevention, mitigation, revitalization and renewal. With the support of Associated Bank, Habitat will play a key role in the city’s plan to battle the effects of foreclosure.
“Associated has a strong commitment to the communities we serve through both financial support and volunteerism,” said Dave Bauer, director of mortgage sales, Associated Bank. “We are happy the funds will be put to great use, helping to make our communities a better place to live and work.”
In addition to the mortgage purchases, Associated Bank will be providing hands-on support of Habitat’s mission. Over the next five years, employees will volunteer working alongside Habitat staff and partner families in their neighborhood revitalization efforts to build new affordable houses and rehab foreclosures into safe, decent homes.. The organization also welcomed Associated Bank Director of Portfolio Risk Management Craig Hahn to its Board of Directors in December.
“Associated’s colleague volunteer program provides employees with an opportunity to give back to their local communities through the donation of time to nonprofit organizations of their choice, including Habitat,” said Mary Wilkosz, corporate social responsibility manager, Associated Bank. “The volunteer opportunities build morale, and promote team-building and leadership. It’s a positive experience for the nonprofit, the employee and our company.”
Milwaukee Habitat relies on several funding sources including charitable donations from businesses, foundations and community members; profits from the Habitat ReStores; and mortgage payments from partner family homeowners. “It’s a common misconception that we give houses away,” Sonderman said.
“That’s not how Habitat works. We provide an affordable, interest-free mortgage and the payments we receive from these mortgages help us to fund more homes.”
When the opportunity arises, Habitat will sell some of the mortgages and use the funds to continue its mission. “The mortgage sale to Associated Bank will increase our capacity to build affordable homes and safer communities for hard-working Milwaukee families,” says Sonderman.
To become a Habitat homeowner, partner families must go through a screening process and are required to contribute up to 500 hours of “sweat equity” into their homes. They spend the majority of this time on the construction site, building their homes and the homes of their neighbors. Sweat equity also includes a financial education component to ensure families are ready to for the challenges of balancing day-to-day expenses with monthly mortgage payments, as well as a community engagement requirement, so the families have a better understanding of the neighborhood where they will live.
Since its inception in 1984, Milwaukee Habitat for Humanity has built more than 540 houses and repaired more than 150 existing homes in the City of Milwaukee. In 2015, the organization plans to serve 25 families through its affordable housing services, and accepts applications to its homeownership program throughout the year.