As the holiday season nears, Issa Shaiye was expecting to spend weekends planning his family's move to their new home, not gathering with dozens of other low-income families into a hall as they fret over where they will live in a few months.

"We thought we were going to be having Christmas over there," Shaiye, a laid-off construction worker, told CBC News, referring to the house Habitat for Humanity Edmonton custom-built to meet the needs of his 14-year-old son Mohamedamin, who uses a wheelchair and depends on others.

Shaiye signed paperwork with the charity in 2017, spelling out that he and his family would move into the home when it was ready, and that he would put in 500 hours of volunteer work with the organization as "sweat equity," a standard requirement.

He also signed an authorization and release form, which mentions a "no-interest loan to finance the purchase price of the home."

Former U.S. president Jimmy Carter and his wife Rosalynn help build a home for Habitat for Humanity in Edmonton in 2017. (Jason Franson, The Canadian Press)

CBC News has seen two other such forms signed by different families, who Habitat calls "partner families," and spoken to four more families who say they were all told they would be able to purchase their future homes at zero per cent financing.

But this September, signatories such as Shaiye started hearing of a new mortgage plan by Habitat that would impose a loan from a credit union with interest for 50 per cent of their mortgage, and only 50 per cent guaranteed at zero interest from Habitat.

"I really don't know what they would get from me doing 500 hours, my family, while we're in a very difficult situation," Shaiye said.

"I have a sick son that constantly goes to hospital."

Many applicants are concerned they would not pass a credit check by Servus Credit Union, which has teamed up with Habitat.

Naimo Musse, who is the head of a single-income household, said she had already been warned by Habitat.

"They told me your numbers are very — like, it would be difficult for the bank to approve you," she said. "So I asked them, 'If that's the case, then why do this now?"'

Seeking a solution, 54 applicants have retained a lawyer and made a statement of claim, hoping to certify a class-action lawsuit.

Karen Stone, CEO of Habitat for Humanity Edmonton, believes the current zero-interest financing model is not sustainable. (Peter Evans/CBC)

Habitat for Humanity started as an international organization based in the United States in 1976, opening in Canada in 1985 and in Edmonton in 1991.

It aims to help low-income families attain home ownership through mortgages they would be unable to obtain on the regular market.

Its most famous sponsor is former U.S. president Jimmy Carter. He and his wife Rosalynn were in Edmonton in 2017, holding hands and jackhammers to inaugurate the Carter Place Project.

Habitat Edmonton's CEO, Karen Stone, said hers is one of the most proactive affiliates in the country, helping about one-third of the 238 families Habitat Canada assisted last year.

But Stone said all of that has come at a cost.

"We were borrowing at 4.5 per cent and lending out at zero per cent, which anyone will tell you is not a sustainable model," she said.

$28 million in liabilities

In its annual report for last year, the organization listed nearly $28 million in liabilities.

In its quest to find savings, Stone revealed, the group merged some staff positions and laid off seven full-time workers, but it wasn't enough.

"We needed to come up with something that would change the potential for Habitat Edmonton to sustain," Stone said.

That something is the new mortgage model.

Stone said Habitat Edmonton faces disappearance in three years if no action is taken.

"We'll still be able to retain some of the infrastructure, but the very homes we're arguing about right now would belong to a bank," she said.

She maintained it was a "fair assumption" for families to think they would be getting interest-free financing, but said Habitat never made that promise.

Asked about the "no-interest loan" language in the forms signed by applicants, Stone said "there is an element of a no-interest loan in this," referring to the half still financed at zero per cent by Habitat.

Edmonton lawyer Avnish Nanda speaks to families involved in a lawsuit against Habitat for Humanity. (Raffy Boudjikanian/CBC)

She showed CBC News modelling sheets for three income levels, showing households would stand to gain under the new terms, thanks to accruing equity and building up a credit history unavailable under no interest.

Stone said the new model was still a better deal for low-income families than they would be able to gain on the free market.

She said it was "highly, highly unlikely" the credit union would reject families under the new terms, as it was supposed to use the same criteria as Habitat in its assessments.

No guarantees, credit union says

But Servus would make no such reassurances.

"We have to assess each application on a case-by-case basis," said Amanda Leneve, a manager for media and member engagement with the institution.

As with any proposed lending, Leneve said, Servus would want to ensure the future homeowner would be able to make good on their obligation, so it would look at their creditworthiness and capacity to pay financial commitments.

None of the allegations by the families has been proven in court. In fact, their class action has not been certified by a judge yet, and Habitat argues in its statement of defence that it should not be, given the individual circumstances of each case.

'There's just a general anxiety'

"There's just a general anxiety. People are afraid to explain to their kids what's going on," said Avnish Nanda, the lawyer the families have retained.

Nanda wants the organization and his clients to compromise."We're hopeful that better solutions will prevail," he said, but added they felt their hand was forced into filing the statement of claim.

In letters sent to some of the families, Habitat was asking for families to decide by the end of November whether they would agree to the mortgage terms, and, if not, leave their homes by the end of December, when their tenancy agreements came to an end.

For now, they've agreed to an extension until March of next year.