According to the Star Tribune, Twin Cities Habitat for Humanity is starting a mortgage program aimed at helping prospective homeowners who don't earn enough to qualify for a traditional mortgage. "The goal is to serve more families, to reach out and serve people who are caught in the middle," said Chris Coleman, executive director for Habitat. "Those are people who may not have quite enough income to borrow through a traditional lender, or those who might have some credit issues that might be a impediment."

Habitat entered the mortgage business two years ago, but with house prices at record highs and mortgage rates on the rise, the group is expanding its outreach efforts in hopes of reaching families who have been priced out of homeownership.

It's a challenging time to be an entry-level buyer with little cash and a below-average income. There's a scarcity of houses affordable to first-time buyers, so competition for those houses has been fierce. Houses priced from $190,000 to $250,000 on average are selling in little more than a month.

That means buyers are outbidding one another, pushing house prices to record highs. Every year the price of those starter houses has increased upward of 7 percent. At the same time, mortgage rates have increased. Though they are still within a percentage point of all-time lows, even modest increases are eroding buying power for people who are already on the edge of qualifying for a mortgage. The situation is especially difficult for renters who are also facing a shortage of options and rising rents.

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