The Genesis Program: How to Make Big Bucks as a Non-Profit

It's no secret that the "non-profit" seller-funded down payment assistance industry has grown exponentially resulting in numerous programs and providers.  It's also no secret that the IRS referred to seller-funded down payment grants as ‘scams’ and ‘schemes’ and legislation has been enacted to prohibit these types of grants.  Based on the numerous reports and documentation produced by the HUD and the GAO, it's no mystery as to why seller-funded grants have been prohibited for FHA-insured loans.  Where the real mystery lies is why some of the non-profit down payment grant providers refer to themselves as ‘non-profit’ organizations and claim 501(c)3 exempt status on their web site(s).

Let's take the Genesis Program for example.  This is a popular down payment assistance program that is approved with many companies  to provide assistance to FHA buyers.  According to the Genesis program web site, Genesis Housing Development Corp is a 501(c)3 tax exempt non-profit organization which meets HUD's requirements to provide down payment assistance on FHA loans.  However, when it comes to verifying the tax exempt status of the organization, a maze of confusion involving various entities and organizations unfolds.     

According to their web site, Genesis Housing Development Corp is located at 8834 N. Capital of Texas Hwy, Suite #110, Austin, TX 78759, and their Federal Tax Identification number is 74-2321634.  Armed with this information, you'd think it would be easy to verify the organization's tax exempt status. 

First off, there is no Genesis Housing Development 'Corp' in the State of Texas. 

As it turns out the Genesis Housing Development Corp is not a 'corporation' at all (in Texas) but an assumed name of Freedom Home Baptist Church according to the Texas Secretary of State Web site.  Since Freedom Home Baptist Church is also shown as an aka on some lender's approved program lists, I think I am finally starting to get somewhere.  That is, until I check the IRS web site for Freedom Home Baptist Church in Austin Texas, and come up with nothing. Click here  to search for yourself.

Multiple entities are using the Same Federal Tax Identification Number:

At this point I decide to search by the Federal Tax Identification Number listed on the Genesis program web site, and  The Baptist General Convention of Texas located in Dallas Texas pops up.  I double checked this on Guidestar, the IRS web site, and alternative search engines.  Now that my curiosity has been provoked, I contact the Baptist General Convention of Texas (BGCT) for direct verification.   However, after a few days worth of checking and various emails, BGCT reported that they had no knowledge of the Genesis program or affiliation with Freedom Home Baptist Church.  About this time, I am really starting to scratch my head.  So, I decided to Google the Tax ID # 74-2321634 and this is where the fun really starts as I find not one, not two, but three organizations using the same tax identification number for different programs. And it grows from there.

Here is a list of organizations I found with ties to the Genesis program and/or Tax ID # 74-2321634:

Genesis Housing Development Corp
www.thegenesisprogram.org
8834 N. Capital of Texas Hwy, # 110
Austin, TX 78759
Web site Administration: Kevin Smith First Priority Mortgage
Federal Tax ID # 74-2321634

Lulac MiCasa
League of United Latin Citizens (LULAC # 4601)
www.lulacmicasa.org
President: Michael Gonzales
4314 Central Expressway
Dallas, TX 75206
Web site Registered to: Kevin Smith SKS Holdings
Federal Tax ID # 74-2321634

Alliance Housing Foundation
www.ahfgifts.org
8834 N. Capital of Texas Hwy # 110
Austin, TX 78759
Web site Registrant Email: kevin@thegenesisprogram.org
Web site Registration Admin: Jeff Mosley
Federal Tax ID # 74-2321634

American Home Grants
www.ahgfunding.org
8834 N. Capital of Texas Hwy # 110
Austin, TX 78759
Web site Registration: Jeff Mosley, Mosley Enterprises
Federal Tax # 74-2321634

CityVision DPA Grant
www.cityvision.org
13777 Ballantyne Corporate Pl. Suite 175
Charlotte, NC 28277
7304 Heirloom Drive
Fort Worth, TX 76134
Web site Registered: Macnifisense, Inc; Admin: Kevin Porter
Federal Tax ID # 75-2446609
Federal Tax ID # for CityVision Down Payment Assistance 74-2321634

Freedom Home Baptist Church
11441/2 Gunter Street
Austin, TX 78721
Federal Tax ID # 74-2321634
Subordinate Organization of The Baptist General Convention of Texas

Baptist General Convention of Texas
333 N. Washington Avenue
Dallas, TX 75246-1754
Federal Tax ID # 75-6044885
ID # 74-2321634 is for a subordinate organization

A search of the Texas Secretary of State records indicated that Genesis Housing Development Corp, Lulac MiCasa, and Alliance Housing Foundation, are assumed names of Freedom Home Baptist Church in Austin, TX. 

The program administrator is a for-profit entity:

The grant administrator, SKS Holdings, Inc is a for profit organziation which is located at: 8834 N. Capital of Texas Hwy, Suite 110, Austin, TX 78759.  Documentation links SKS Holdings to the administration, marketing, and funding of the Genesis program.  Not only is the address for funding of the Genesis program the same as SKS, Texas public records show assumed name filings for Genesis Marketing and MiCasa Marketing.  Businesses involving Kevin Smith that have also been operated at the same address include First Priority Mortgage, Express Equities, and Guaranty Funding.  

According to a phone conversation with a representative of the Genesis Program (Lorenzo), he "estimates that Genesis has been doing between 800-900 transactions a month."  Lorenzo also stated "the maximum grant is $22,500 and the grant fee ranges from as low as $300.00 to as much as $750 or 1% of the sales price."  Lorenzo also offered that "the fee depends on who the lender is, and lenders like B of A have negotiated lower fees."  Based on these numbers along with the fact that  public records reveal a $2.4 million construction home loan taken out by SKS President Kevin Smith for his personal residence in March 2007, the seller funded down payment grant business certainly appears to be lucrative.

LULAC MiCasa Program NOT authorized by LULAC to use the LULAC name:

In speaking to the Brent Wilkes, National Executive Director of the League of Latin American Citizens (LULAC), he confirmed that Michael Gonzales is the President of LULAC #4601.  However, he stated that LULAC declined program participation when Mr. Gonzales first presented the program. Wilkes states he instructed Gonzales not to use the LULAC logo or represent affiliation with the program.  He further states LULAC views these types of seller-funded grants as for-profit ventures that increase property sales prices.  According to Wilkes, LULACs position on seller-funded down payment grants is that there are better solutions that do not result in higher sales prices.  He also expressed displeasure that an affiliation with LULAC and the Genesis/Mi Casa Program is being inaccurately represented on the MiCasa Web site. 

Speaking of for-profit ventures, the Bilingual Yellow Pages which is a for-profit business founded by MiCasa President, Michael Gonzales, uses the same business address and phone number as the MiCasa program.  Mr. Gonzales has not responded to my written email inquiry or voice mail.  

CityVision, Inc. was involuntarily dissolved by the Texas Secretary of State:

As to CityVision, according to the Texas Secretary of State web site, the organization was involuntarily dissolved on January 16, 2008 for failure to file their periodic report.  When I asked CityVision President Lee Shaw about the the organization being dissolved, he was unaware and stated that it "was due to an oversight."  Shaw also states that the CityVision program is co-venture between Genesis and  Alliance Credit Counseling in North Carolina.  Nonetheless, the fact remains that the organization is not in good standing.  While the CityVision web site and web site registration show the address of 13777 Ballantyne Corporate Pl. Suite 175 Charlotte, NC 28277, CityVision is not registered as a corporation (profit or otherwise) in North Carolina.  The CityVision grant program administrator, Doug Hammond, is also a director of Alliance Credit Counseling, which is a non-profit organization whose address is listed as 13777 Ballantyne Corporate Pl. # 100, Charlotte, NC 28277.  Additionally, Kevin Porter is the registered agent and director for both Alliance Credit Counseling and Macnifisense (a for-profit business) for whom the CityVision web site is registered.  Click here to view the IRS Return of Organization Exempt from Income Tax for Alliance Credit Counseling.  It's interesting to note CityVision grant Program Director, Doug Hammond, received $70,249 in compensation from Alliance Credit Counseling in 2007.  Also of interest is a  $2,500,000 loan from Alliance Credit Counseling to Macnifisense, Inc. which is a for-profit entity of Kevin Porter  and also the registrant of the CityVision web site.  Click here to view CityVision site registration.  

Baptist General Convention of Texas says no affiliation with Freedom Home Baptist Church:

In regard to Freedom Baptist Church, I verified directly with the Internal Revenue Service that Freedom Home Baptist Church is a subordinate organization of The Baptist General Convention of Texas (BGCT) and their 501(c)3 exemption is through the Baptist General Convention which is showing as the parent organization.  Also, Freedom Home Baptist Church still shows an affiliation with BGCT on the BGCT web site.  Freedom Home Baptist Church did not return my phone call.  However, Ferrell Foster, Communications Director for Baptist General Convention of Texas made this statement via email and subsequent phone conversation:

"I can say that the ID number you referenced in the earlier email is not ours, and we have no knowledge of the three entities — Genesis, Mi Casa and AHF. Freedom Home Baptist Church is affiliated with the BGCT but has not contributed to the convention since 2000 and therefore is no longer covered under our 501(c)3 exemption. We cannot be certain as to how the BGCT continues to surface in your search."

Now try following the bouncing ball:

To recap, Genesis Housing Development Corp is not an actual corporation, but an assumed name of Freedom Home Baptist Church which is a subordinate organization of The Baptist General Convention of Texas, and their 501(c)3 exemption is through the parent organization.  However, the Baptist General Convention of Texas states that Freedom Home Baptist Church is no longer affiliated with their organization and is not covered by their 501(c)3 exemption. 

CityVision, who also claims 501(c)3 exempt status, was involuntarily dissolved in January of 2008 by the State of Texas and as such, is not a bona fide tax exempt entity.  The CityVision program is administered by a paid director of Alliance Credit Counseling, which is a 501(c)3 exempt non-profit.  Also, the CityVision website is registered to Macnifisense which is a for-profit business of Kevin Porter, President and founder of Alliance Credit Corp. 

The LULAC MiCasa website states it was founded by LULAC which is a bona fide 501(c)3 organization.  However, LULAC's Executive Director, Brent Wilkes, states that the MiCasa program is an unacceptable for-profit venture and Michael Gonzales is not authorized to use the organization's 501(c)3 exemption for activities related to the Genesis program. 

While Alliance Housing Foundation and American Home Grants cite 501(c)3 tax exempt status on their websites, there is no evidence that can be found to support that their organizations are bona fide tax exempt entities because the information  provided on their website is for the Genesis program.  

Hence, there are 5 organizations using the tax exempt status of an organization whose tax exempt status is questionable.

While Baptist General Convention of Texas states in writing that they are no longer affiliated with Freedom Home Baptist Church, the IRS has not yet received notification of termination of subordinate organization.  Also, Freedom Home Baptist Church is still showing as a member church on their website.

This raises some questions:

If multiple entities are brokering down payment grants to SKS/Genesis/Freedom Home Baptist Church, and neither the Baptist General Convention of Texas or Freedom Home Baptist Church are required to file income returns with the IRS, how can anyone know if the income generated by the Genesis program is being properly reported? 

It also raises the question of whether grant brokering is an acceptable practice, especially when the administration is under control of for-profit entities. 

Speaking of for-profit, just how much revenue has the Genesis program generated?

Since the Freedom Home Baptist Church had the temerity to take legal action against the Department of Housing and Urban Development in order to prevent HUD from implementing their 2007 rule banning seller-funded down payment assistance, we have the good fortune of finding a signed Affidavit by S. Kevin Smith which states that the program has assisted over 30,000 buyers.  At $300 to $700 per transaction, that equates to somewhere between $9,000,000 and $21,000,000 in revenues going to an organization that makes no financial disclosure and doesn't pay taxes. 

Regulators, I hope you are paying attention, because this your wake-up call on the Genesis Program.  But don't take my word for it. Follow the links that are in bold.