EDMONTON -- Habitat for Humanity Edmonton has reached a deal with dozens of partner families who were suing the charity over a proposed new mortgage model.

According to those involved, the families are being given four options: to maintain the former zero-interest mortgage; enter the new mortgage deal with half covered by a line of credit; leave the Habitat program with equity they built up in their home through their tenancy period; or if they no longer meet the income or credit score threshold for getting a Habitat mortgage -- due to COVID-19 or other reasons -- extend their tenancy period. In the latter scenario, the first six months of rent would go towards equity, and another six months could be requested although they would not build equity.

Habitat’s board chair says remediation starts by honouring each family’s individual arrangement.

"We’re happy with the decision, and we accept Habitat’s apology, and it’s a learning process for everyone," Carter Place resident Naimo Musse told CTV News Edmonton on Monday.

"That’s the Habitat that we know. That’s the Habitat that we signed up with."

Three weeks ago, Musse was one of many rallying against the Edmonton chapter of the charity over a new mortgage agreement that, in some cases, forced residents out of homes they built themselves.

"We should have listened earlier. That’s one of the things that we acknowledge," Habitat board chair Chris Bruce said.

"We are very sorry for the way those things came to pass. It did take a long time for us to understand that we weren't listening to all the challenges the way we should be."

That apology was reiterated at a mediations Habitat arrangedwith the families and their lawyers on July 20 and 21. 

"I think everyone left the room feeling much better about the direction we were heading," Bruce commented. 

One of the families’ lawyers, Avnish Nanda, called the meetings remarkable: "This is rare. This never happens."

Nanda said Habitat is offering virtually everything the families were asking for in their lawsuit.

"So if going with the new mortgage model works for them, pursue that. If the old mortgage model works, pursue that, or if leaving the program... Leave the program with a significant amount of money," the lawyer explained.

But as another Carter Place resident, Carema Bouanani, said, it will take time to heal their wounded relationship with Habitat.

"It’s very bittersweet. It hurts – it really hurts – even though they are working with us." 

She said, "I can't forget the struggle and the pain and the suffering and all that stuff that we went through."

Bruce acknowledged there is work to do: "We know we have some trust to build with our families."

A new Community Advisory Council has been established to help improve community engagement going forward.

The lawsuit will be dropped as soon as a judge signs off on a new deal.

Bruce said the situation will mean it takes Habitat longer to reach some objectives, but overall is "really excited."

Fifty-seven families in the Carter Place community launched a lawsuit in June when Habitat for Humanity changed their mortgage agreements. Instead of the zero-interest mortgages with monthly payments that didn’t exceed 30 per cent of a family's earnings, the new model split the mortgage in two, with part moving to one with below-market interest.

Some residents were concerned they wouldn't qualify for the new mortgage and would have to leave their homes.

Habitat Edmonton said at the time that the new model would help families build credit and would allow the charity to continue to build new homes.

CEO Karen Stone stepped down in June.

With a report from CTV News Edmonton's Jeremy Thompson