1. Loan Origination: Habitat for Humanity Encouraging New Production
Jay Guthin, Assistant Director of Loan Servicing
Rhode Island Housing
Providence, Rhode Island
- Rhode Island Housing info/history
- Role as Assistant Dir of Loan Servicing

2. Rhode Island Housing & South County Habitat
Since 1976 Habitat has provided 6.8 million Americans with safe and affordable homes
15-year relationship with the South County Habitat for Humanity (serves southern RI)
Purchased 49 loans totaling $3.6 million
42 active loans with principal balance of $2.2 million
Our involvement with Habitat is with the South County branch, which only serves the southern portion of the state.

3. Consumer Financial Protection Bureau (CFPB)
The Challenge:
Created by Dodd-Frank Act of 2010 to protect homebuyers from exorbitant interest rates seen in the housing crisis
Mortgage lenders were required to provide complex disclosures about rates and fees
Required legal assistance that volunteer-based Habitat could not afford
“The new rules would have meant purchasing expensive processing software and paying monthly access fees to process fewer than 10 mortgages a year. There are intricate information and timing requirements that if handled incorrectly would have negated our ability to sell our mortgages to Rhode Island Housing or anyone else.”
‒ Lou Raymond, executive director of South County Habitat for Humanity
- The irony is this: Habitat loans were already at 0%!!
- But the law of unintended consequences swept up the nonprofit builder in a wide
net, in which all mortgage lenders were required to provide complex disclosures about rates and fees—
- disclosures calling for legal assistance that volunteer-based Habitat could not afford.

4. Consumer Financial Protection Bureau (CFPB)
The Solution:
Worked together to devise a much-needed loan funding and servicing option
Made possible because Rhode Island Housing originates its own loans
- The irony is this: Habitat loans were already at 0%!!
- But the law of unintended consequences swept up the nonprofit builder in a wide
net, in which all mortgage lenders were required to provide complex disclosures about rates and fees—
- disclosures calling for legal assistance that volunteer-based Habitat could not afford.

5. Our Role Originate and close Habitat’s 0% interest loans
Adhere to applicable state and federal laws and regulations and Habitat’s underwriting guidelines
Retain ownership of loans at reduced cost of 68 basis points of the full principal balance
Perform loan servicing functions
Provide outstanding customer service and support
Rhode Island Housing’s seasoned loan-origination operation already had the staffing capacity and infrastructure to support the
CFPB’s regulations and incorporate them into the agency’s day-to-day technology.

6. A Win-Win! WE lent our capacity, infrastructure and experience
THEY were able to keep home building moving forward without a disruption
TOGETHER the program supports creation of safe, affordable homes for a population that might not otherwise have the opportunity to own a home
WE are able to fulfill our mission and do what we do best: provide and service loans
THEY get to do what they do best: provide families with decent housing within their financial reach
TOGETHER the program supports the state’s interest in stabilizing neighborhoods

7. “After numerous exchanges, we agreed that Rhode Island Housing will underwrite our homeowner mortgages to our standards and will process and meet all the TRID requirements guaranteeing saleable mortgages and a homeowner-friendly process. Not only will this new process save us thousands of dollars each year, but will lift a heavy burden from our small staff. Our first homeowner to experience the procedure found it to be simple, efficient and friendly. We are grateful to Rhode Island Housing for, once again, being a source of willing support and workable solutions.” - Lou Raymond, Executive Director of South County Habitat for Humanity
Only eight months after the rules were enacted in October 2015, Rhode Island Housing and Habitat had the process up and running for applicants.
South County Habitat is the largest Habitat for Humanity chapter in Rhode Island, but Rhode
Island Housing hopes to build upon the success of this new program and expand to other chapters in the near future.

8. Jay Guthin Assistant Director of Loan Servicing Rhode Island HousingP: e: w:
Please contact me… Thank you