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Habitat For Humanity Australia Launches “Affordable Land Trust”

First Step To Generate A Sustainable Flow Of Securitized Assets, Increasing Reach To Help Families In Need

SYDNEY, 4th April 2006: Habitat for Humanity Australia has launched a unique initiative known as the “Affordable Housing Land Trust”.

Land initiative (from left): HFH Australia chairman Anthony McLellan with former deputy premier John Anderson and PMI Group’s chairman Roger Haughton at the Sydney launch

The initiative will assist Habitat to further its housing projects for low-income families in Australia through the acquisition of land.

The fund will provide a tax-deductible social investment opportunity for both private and public sector organizations to support and leverage the Habitat for Humanity model to address the growing concern of housing affordability in Australia.

HFH Australia hopes to raise a further A$10 million (US$7.1 million) for the Affordable Housing Land Trust Fund, which will be leveraged to provide up to AU$100 million towards building homes for needy families.

The Affordable Housing Land Trust was launched at a dinner hosted by one of Habitat for Humanity’s Cornerstone Sponsors, PMI Mortgage Insurance Ltd. which provided the platform for Habitat for Humanity to raise awareness and gain support from amongst its business community and partners.

Among the eminent dignitaries present at the event include Australia’s former deputy prime minister John Anderson; South Australian state senator Grant Chapman; New South Wales Shadow minister for housing Chris Hartcher; chairman and chief executive of The PMI Group, Inc. Roger Haughton; president & chief operating officer of The PMI Group, Inc. Stephen Smith; and Anthony McLellan, chairman for HFH Australia.

Commenting on the initiative, George Macdonald, HFH Australia’s chief executive, said: “Home ownership is one of the major concerns especially for low-income families in Australia and our mission is to address this need through our innovative housing model.

“Land is one of our primary needs and the Affordable Housing Land Trust Fund provides an excellent opportunity for corporations to invest back into the community by supporting this initiative”.

Explaining the workings of the trust, Macdonald added: “The trust is essentially structured as a designated HFH Australia account. Investors receive a tax benefit for land or capital donations to Habitat which are then used to generate a land bank for affiliates. The terms allow for payment of interest, but paying interest   compromises the tax benefit for an investor.”

“Homes completed by affiliates and chapters are sold to Habitat homepartner families at market value and at no interest. The mortgages are then available for sale or securitization, with the cash realized from the sales being repaid to the trust, essentially making the trust self sustaining – so the whole process can start again.” 

“Our target market is high-net worth individuals, corporates and government bodies – parties with an interest in seeding a self-supporting affordable home ownership model.”

Ian Graham, CEO of PMI Mortgage Insurance Ltd., said, “PMI and Habitat for Humanity have a strong global partnership, both sharing a common goal of putting families in homes. PMI provides financial and volunteer support for Habitat’s initiatives in Australia. We are delighted to assist them to launch this fund and are extremely grateful to our customers and partners who supported us in this noble endeavour.”

In 2005, Habitat for Humanity and PMI Mortgage Insurance Ltd won the Prime Minister’s Award for Excellence in Community Business Partnerships in the medium business category.

HFH Australia was established in 1988 and last year built over 500 houses in Australia and neighbours in neighbouring countries. It has provided home ownership to needy families through its network of affiliates located in Victoria, New South Wales, South Australia, and Queensland and Western Australia.