S-371-116
Became Public Law No: 116-342.
Sponsored by Deb Fischer (R-NE)
What it does
The BUILD Act allows nonprofit organizations that offer mortgage loans for charitable purposes to use alternative disclosure forms instead of the standard forms required by federal mortgage lending law. It modifies the paperwork requirements these nonprofits must follow when providing home loans to borrowers. The bill was signed into law as Public Law No. 116-342.
Who benefits
Nonprofit organizations that provide charitable mortgage lending would benefit from reduced paperwork burdens and greater flexibility in how they communicate loan disclosures. Borrowers served by these nonprofits — often low-income individuals or first-time homebuyers — may benefit if the alternative forms are clearer or better suited to the nonprofit lending model.
Who is hurt
Borrowers who rely on standardized federal disclosure forms for comparison shopping across lenders may receive different-looking documents from nonprofit lenders, potentially making side-by-side comparisons with conventional lenders more difficult. Consumer protection advocates who view uniform disclosures as a safeguard against predatory or confusing loan terms may see this as a reduction in borrower protections.
Supporters argue
Supporters argue that the standard federal mortgage disclosure forms were designed for commercial lenders and do not fit the structure of charitable nonprofit loans, which often have below-market rates, deferred payments, or other non-standard terms. Forcing nonprofits to use forms built for profit-driven lenders creates confusion rather than clarity for borrowers. Allowing alternative forms tailored to the nonprofit lending model would give borrowers more accurate, readable information about their actual loan terms. Supporters also contend that reducing unnecessary compliance burdens on nonprofits frees up resources that can be redirected toward serving more low-income homebuyers.
Opponents argue
Opponents argue that uniform federal disclosure forms exist precisely to protect borrowers by ensuring they receive consistent, comparable information regardless of who is issuing the loan. Allowing nonprofits to use alternative forms creates a two-tiered disclosure system that could make it harder for borrowers to understand and compare loan terms. Critics also contend that "charitable purpose" is a broad and loosely defined standard, raising concerns that the exemption could be applied more widely than intended. Opponents further argue that weakening disclosure requirements — even for nonprofits — sets a precedent that could erode consumer protections more broadly over time.