Nonprofits Becoming Brokers

Nonprofit community development groups are setting up mortgage brokerage operations to provide their clients with better-priced loans and to further their relationships with major lenders who generally support their housing activities.A survey commissioned by the Local Initiatives Support Corp. found that 34 nonprofit community organizations have brokered 5,100 mortgage loans totaling $210 million. These community groups generally provide homeownership counseling and education and now they are taking the next step by originating the loans and selling them to banks. Some of the nonprofits are using the loans' fees to help pay for their counseling and educational activities. LISC has been working with Fannie Mae and Freddie Mac to help other nonprofits to get into the brokerage business, LISC vice president Buzz Roberts said.