Regaining the Dream: Case Studies in Sustainable Low-Income Mortgage Lending

Publication Date

November 2014

Author(s)

Janneke Ratcliffe

Client/Funder

Ford Foundation

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Overview

The UNC Center for Community Capital examined the experience of several affordable mortgage programs that provide models of how to extend the benefits of homeownership broadly and successfully:

• Self-Help’s Community Advantage Program, a secondary 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
• Massachusetts’ ONE Mortgage Program, an alliance of organizations that pools resources and risks to reduce down payment requirements so more than 17,000 low-income households can become homeowners.
• Housing Finance Agencies, state agencies that use tax exempt bond financing to close market gaps in affordable homeownership, providing loans for more than 2 million low- and moderate-income families to purchase their first homes.
• Homewise, a full-service mortgage broker with a comprehensive, high-touch approach that has helped more than 2,000 residents of New Mexico become successful homeowners while also demonstrating impressive portfolio performance.
• Veterans Affairs Loan Program, a home loan guaranty program operated by the Veteran’s Administration that has helped 20 million veterans buy, build or repair a home with no down payment while maintaining one of the lowest foreclosure rates in the housing market.

In a series of case studies covering more than 22 million mortgages, researchers examine the motivations behind the programs, the ways in which they address market gaps and the keys to successful homeownership finance.