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Owning a home is one of the greatest sources of wealth for modern Americans. However, for some Americans, there are outstanding barriers that may prevent homeownership. Without assistance, these obstacles create substantial wealth gaps. To continue providing affordable housing financial options to our customers and communities, we’re happy to announce our new Community Lending program!
A Special Purpose Credit Program, or SPCP, aims to help correct mortgage lending inequality in underserved regions and populations. These programs were made allowable as part of the Equal Credit Opportunity Act in 1974 and aim to create access to financial services for underserved communities. SPCPs set unique standards and benefits to make loan qualification easier for those who may not have access to finance qualifications.
For many Black, Indigenous, and people of color (BIPOC) households, they have significantly less wealth than the median wealth from white households. According to 2020 data from the Federal Reserve, BIPOC households have lower savings and are less likely to benefit from intergenerational transfers of wealth than white households. Data from The Urban Institute from 2020 suggests that homeownership plays a larger role in creating wealth for BIPOC families than white families. According to Synchrony Bank, Black families hold a median net worth of $24,100, compared to white families’ median net worth of $188,200.
Building more affordable housing addresses one of our nation’s problems with homeownership, but not all of them. According to the National Fair Housing Alliance, one third of Black, Latinx, and Hispanic borrowers don’t have credit scores because they don’t have access to the same financial services as other communities. By allowing SPCP programs in more geographic areas, minority households have more fair financial opportunities and access to economic growth.
Our Community Lending Program is available for primary residencies only. There are no income requirements or first-time homebuyer restrictions, unless coupled with another first-time homebuyer program. In addition, the interest rates are more competitive than a typical conventional loan, allowing borrowers to afford more home than if they were using another loan program. To find out if the property you’re looking to purchase is eligible, contact your Loan Originator.
As an Equal Housing Lender, Homestead Funding is committed to serving our communities’ homeownership needs. When you’re ready to learn more about how homeownership can happen for you, contact us.
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.