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Affordable Homeownership Workstream

Project REACh: Removing Barriers to Financial Inclusion

Homeownership is a major determinant of wealth in America, and this wealth is the key to a host of economic opportunities. Persistent racial wealth inequality, however, has prevented many potential homebuyers, particularly minorities, from owning homes.
— Acting Comptroller of the Currency Michael J. Hsu

The Project REACh Affordable Homeownership Workstream is focused on sustainably growing minority household wealth by increasing minority homeownership rates. U.S. Census Bureau data shows the homeownership rates for minorities households significantly trailing that of White households. With Americans' primary residences accounting for about 25 percent of their overall wealth, bringing the minority homeownership rate to closer to that of White households can play an important role in reducing the minority wealth gap.

What We Do

The Affordable Homeownership Workstream is addressing the challenges minority individuals and families face when seeking to purchase homes and addressing barriers that prevent their becoming home buyers. Homeownership is the primary way most individuals and families build wealth in the United States. Unfortunately, the homeownership rates for minorities significantly trail non-Hispanic Whites. This Workstream is seeking to:

  • Address challenges with closing costs, down payment, appraisals, and underwriting.
  • Develop a coordinated housing counseling and financial education program.
  • Identify ways to expand affordable single-family inventory.
  • Preserve homeownership whenever possible for borrowers that experience difficulties making their mortgage payments.

What We’ve Done

The Affordable Homeownership Workstream participants have taken steps to expand homeownership opportunities for low- and moderate-income (LMI) and minority home buyers by:

  • Relaunching a program to provide potentially forgivable, interest-free down payment loans to LMI home buyers with no required monthly payments.
  • Launching a grant program to provide LMI buyers up to $5,000 to assist with closing costs.
  • Establishing an interest‑free down payment and low-closing-cost assistance pilot program to help LMI homebuyers in certain cities the Midwest.
  • Launching a grant program of up to $5,000 for down payment and closing costs to purchase a home in more than 6,700 majority-Black neighborhoods. Borrowers under this initiative using certain programs receive an additional $500 if they complete a home buyer education course with an approved counseling agency.
  • Establishing a program to provide up to $2,500 to help borrowers, who may not be able to afford the upfront cash needed to refinance under certain loan programs, to refinance their homes to take advantage of lower interest rates.
  • Launching a special purpose mortgage credit program resource directory and special purpose credit mortgage lending programs.
  • Enabling home lenders to consider rental payment history in their mortgage underwriting analysis.

Where We’re Going

The Affordable Homeownership Workstream participants have taken steps to expand homeownership opportunities for LMI minority home buyers by:

  • Identifying ways to eliminate appraisal disparities.
  • Identifying ways to more efficiently connect borrowers who have been denied a mortgage with housing counseling agencies that could help them get on the path to future homeownership.
  • Evaluating how alternative data that show repayment history for rent and other recurring payments can more effectively be used in the mortgage underwriting process.
  • Expanding use of special purpose credit programs.
  • Identifying ways to expand the affordable single-family inventory including accessory dwelling units, single-family acquisition and rehabilitation financing, and repurposing of commercial properties for residential use.
  • Evaluating ways that credit risk transfer models can be designed to bring about efficiencies in the private mortgage securitization market.
  • Seeking greater bank participation in programs that are expanding single-family home financing in Indian Country.