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How to Form a Non-Profit Real Estate Group

Can the population you are seeking to serve afford to live here?

According to the U.S. Department of Housing and Urban Development, the number of families who can't find affordable housing---defined as housing where the mortgage or rent, insurance and utilities are no more than 30 percent of the household income---has grown steadily since the 1990s. A number of non-profit real estate organizations have formed to tackle the problem, using a variety of approaches. Before creating a non-profit group, it's important to set your goals, as well as knowing legal steps for incorporating as a non-profit.

Instructions

Difficulty: 3

Forming Your Organization

Step 1

Select the kind of group you want to create. Habitat for Humanity and similar groups work with owners to build new homes, so that the owners have "sweat equity" invested. Community land trusts sell homes, but lease the land under them, so that the mortgage doesn't have to cover the cost of land as well as the home. Some groups buy and rehabilitate old buildings, while others build new. Other organizations work to help particular populations, such as seniors or families with children.

Step 2

Research grants and other funding sources. Many housing grant programs come with requirements as to the location of the housing project, the tenants' income range and the kind of non-profits that can apply. This will help you further refine the plan for your non-profit organization.

Step 3

Pick a name for your corporation and file it with your state office. Nolo.com says that typically, your name cannot be the same as any existing corporation operating in the state, and cannot contain certain words prohibited by state law---"United States" is often prohibited, for instance. Most states have filing procedures on their websites, which will often allow you to search online for existing names. If not, call the state division of corporations and ask if the name you want is already taken. Nolo recommends contacting the U.S. Patent and Trademark Office to make sure the name hasn't been registered as a trademark.

Step 4

Incorporate. Draw up up articles of incorporation---which may be called a charter or articles of organization in various states---and bylaws, select a board of directors and then file with the state corporate office, which should have incorporation forms on its website for you to download. You'll have to include specific language that qualifies you for non-profit status.

Step 5

Apply to the IRS for federal 501(c)(3) status, which exempts you from most federal income taxes and some state taxes. Information on filing is available at irs.gov. You have to incorporate first, because the IRS will require copies of your corporate charter.


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Article Written By Fraser Sherman

Fraser Sherman is a former reporter with the "Destin Log" newspaper and now freelances full-time. His work has been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life," and he's the author of three film reference books, including "Screen Enemies of the American Way." He specializes in finance and tech articles.