Mortgage Donation

Mortgage Donation

For many people, their home is their largest investment, and donating this significant investment to a charity can provide the organization with much-needed property, as well as the opportunity to sell the property to gain money for the charity. Whether you've inherited a home you can't use, have an extra property you'd like to donate or simply want to sacrifice your own home for the well-being of others, donating your home can make a meaningful difference to a charity.

Talk to a financial officer with the charity about your intention to donate your property. Your mortgage isn't a donation; instead, it's a financial liability, so you'll need to ensure that the charity is willing to accept a home with a mortgage. The charity may also have paperwork it wants you to fill out containing information about your home, its estimated value and any requests you have for its use when you donate it.

Discuss how you want to handle the mortgage with the charity's financial officer. You have three available options. You can sign the deed over to the charity and continue to pay the mortgage, or you can refinance the loan in the charity's name. Refinancing will require that the charity pay the remaining balance on your loan, and will require a credit check and loan application. Finally, you can sell the home and give the proceeds to the charity.

Consult with a real estate attorney or financial planner, who can advise you of any concerns specific to your property. For example, if the property has code violations or is severely deteriorated you may need to draw up an arrangement with the charity that the property is donated "as-is." Draw up a contract with the charity that is specific to your needs. For example, if you're signing the deed over but plan to pay the mortgage, you'll need to specify this.