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Tess Vigeland: We learned earlier this week that applications for new mortgages are down 36 percent from this time last year. That’s despite the fact that interest rates on those mortgages are at their lowest level in 50 years. That is not good news for builders like Horton, KB Homes and Pulte, three of the biggest names in home construction. But one homebuilder is still going strong: Habitat for Humanity. In fact, the Georgia-based nonprofit recently found itself on a list of the top 10 builders in the country. That’s a first for Habitat.

Eve Troeh reports on how the nonprofit is rebuilding itself for an even bigger role in the housing sector’s recovery.

Eve Troeh: When a construction company decides whether to build a house, it looks at who might buy it.

Harvard housing expert Nic Retsinas says Habitat for Humanity looks at who doesn’t have one.

Nic Retsinas: They look at their capacity though the use of volunteers, but their more crucial variable is need. And sadly, in this day, the need for affordable housing is more severe than ever.

Retsinas says private builders aren’t interested in building affordable housing, because many customers can’t get a mortgage right now, even for the cheapest homes. Habitat for Humanity has always sold homes to working, low-income families. They work side-by-side with volunteers to build their house from scratch.

But Habitat senior director Mark Andrews says that may change.

Mark Andrews: In many communities, new housing doesn’t make an awful lot of sense.

He says Habitat can’t ignore all the empty, bank-owned properties that families could move into instead. The organization plans to maintain its building rate of about 5,000 homes a year. But it’s also started to buy, repair and sell foreclosures. Andrews says it’s a big departure from the group’s core focus — on home building as “barn raising.”

Andrews: While new house construction may be a bit more glitzy when you stand up the walls and have that photographic moment, really the impact of restoring foreclosed properties — homes that frankly are a blight to the community — is even more powerful in many ways.

But it’s also more challenging. Rehab work is complicated for volunteer crews. It’s often more expensive than new construction. And Habitat has to compete with companies who are scooping up blocks of foreclosures to eventually sell in a stronger market.

I’m Eve Troeh for Marketplace.