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Publication Date

May 2012


A secondary mortgage market outlet that provides liquidity for community reinvestment lending has funded more than 50,000 mortgages made by 29 lenders in 48 states since 1998 without incurring widespread defaults.

Self-Help Credit Union was founded in 1984 to address the credit needs of minority, rural, women-headed and lower-income households who were under-served by traditional lenders. Among its activities, Self-Help directly financed $336 million in home loans to more than 4,500 households.

Over the years, the good performance of the mortgages extended by the credit union convinced the organization that low-resource households could successfully obtain and sustain homeownership. However, secondary-market guidelines severely limited lending to this market and prevented many creditworthy householders from obtaining home loans. Self-Help teamed with Fannie Mae and the Ford Foundation to create a secondary market for non-standard home loans.

In a case study from an ongoing series, Regaining the Dream Case Studies in Sustainable Low-income Mortgage Lending, UNC Center for Community Capital researchers outline the key challenges, solutions and outcomes of this model affordable home lending program.

Topics(s): Affordable Homeownership, Community Advantage Program, Mortgage Finance, Other