Nonprofit organizations use residential housing for agency offices and as a headquarters. Purchasing a house with an organization's funds frequently requires the approval of the nonprofit board supervising the agency. Depending on the legal structure of the nonprofit, the purchase may also require the signature of the group's treasurer and operating officer. The operating charter of some nonprofits also require approval of the membership for a large agency expenditure such as a house.

Determine your nonprofit organization's housing needs. This process requires discussing the agency needs with your staff, supervisors and board of directors. Calculating the necessary square footage involves listing the number of staff and volunteers using the residential space and also determining the space required by the population you serve.

Determine the nonprofit's budget for the home purchase. Include the cost factor of the residence in the discussion with your board and supervisors. Formally examine your financial situation to calculate the cash on hand and the liability of meeting a monthly mortgage payment. Set a sales figure for your nonprofit's house purchase using this information.

Shop for houses with a licensed, experience real estate agent. Consider registering your organization with the HUD and FHA, both federal housing agencies. Completing and filing Mortgagee Letter 00-08 and 02-01, available on the HUD website, allows a nonprofit group an opportunity to bid on FHA- and HUD-owned properties at a discount on the published listing price. Your organization must be listed on the agencies' approved list to receive the discount and enter the bidding.

Shop financing for the nonprofit home purchase including HUD and FHA special financing programs. The lender's estimates provide a range for the approved mortgage amount, unless your agency plans to fund the house purchase with cash revenues. Obtain an official approval letter signed by your lending broker to present with a sales offer incorporating a mortgage loan.

Write a sales contract on the selected property and shop insurance for your new building. Have your organization's approved officer or board member sign the sales contract to make an offer on the house. Attach your lender's approval letter to the offer or have your real estate agent present the letter with the sales offer for the house.

Close the escrow on your organization's new house, purchase the appropriate insurance to cover your liability on the residence and move to the new location.


Take adequate time to evaluate a group of houses to meet your nonprofit's needs. Consider interior modifications to alter the home to provide office or work space. Minor interior work on a home meeting your basic needs frequently provides a cost savings when compared with selecting a more expensive property, particularly when dealing with special HUD or FHA purchases offered at a discounted sales price.


HUD/FHA nonprofit approval requires renewal every two years, even for groups with approved mortgagee letters.