Spikes in property values have made Habitat for Humanity homeowners prime targets for predatory lenders. Some lenders have enticed clients of the Christian housing ministry to borrow against their homes, as the owners build equity quickly due to Habitat's no-interest loans. But the deals almost never pay off for the borrower.

"First-time homeowners don't have a lot of credit," said Cheryl Peterson, mortgage foreclosure prevention counselor at Twin Cities Habitat for Humanity in Minnesota. Some see refinancing as a means of paying off consumer debt. But "it's never as affordable as a Habitat loan," Peterson said.

Subprime loans (higher-interest loans to consumers with impaired or nonexistent credit histories) have become a lucrative business, said Dick Towner, executive director of the Good Sense Ministry at Willow Creek Community Church in suburban Chicago.

"With increased interest, even with defaults, the company comes out ahead," Towner said. "That's rather unconscionable." Towner said many of these loans only drag families further into debt.

BusinessWeek reported in November that Habitat families are receiving phone calls, personal visits, and even mail solicitations designed to look like Habitat literature. But Peterson said only 2 percent of Twin Cities Habitat homeowners have lost their homes to foreclosure after refinancing. She estimated that Habitat's number runs lower than the local average.

In some ways, Habitat homeowners might be better prepared than most. All must take classes in personal finance. Homeowners are also supposed to obtain approval from Habitat before signing onto another loan.

"We spend 300 to 500 hours with families," said Stephen Seidel, director of Habitat's U.S. urban programs. "We're in this thing ...

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