Two pairs of hands at a table. One is using a calculator. Printouts of charts are spread across the table.

Equitably increasing access to credit

Promising strategies for equitably increasing access to credit for underserved populations

  • Expanding down payment assistance.
  • Adopting tax policies that increase access to affordable homeownership for lower-income households.
  • Investing in homebuyer counseling and financial education.
  • Combatting predatory lending.
  • Providing new options for families in debt.
  • Boosting working families’ incomes through state earned income tax credits.
  • Supporting individual development accounts.

Credit is difficult, if not impossible, for many households to access, and minority and lower-income applicants often do not have access to credit at all or have access only to predatory credit.

Generally, institutions that extend credit aim to serve wealthier populations because their business model largely depends on it, says Jesse Van Tol, president and CEO of National Community Reinvestment Coalition, an organization that champions fairness in banking, housing and business development.

“Wealth building is intergenerational. If you start out with very little wealth, it makes it harder to build wealth,” he says. “A bank is more likely to want to make a $1 million loan than a $75,000 one because they make more money off the bigger loan. This ongoing discrimination creates impediments for low-wealth families, especially people of color, to access the credit they need to buy a home.”

Homeownership is the primary source of wealth for most Americans, says Doug Ryan, senior director of affordable homeownership at Prosperity Now, a national nonprofit dedicated to expanding economic opportunity for low-income families and communities. “By leveraging their equity, families can do repairs on their home, pay for a college education. They can invest.”

“You can see a huge social injustice when you look at how, historically, access to ownership and down payments often come from intergenerational wealth — from parents’ or grandparents’ mortgage assets.”
— Shannon Vilhauer, executive director of Habitat for Humanity Oregon

You can see a huge social injustice when you look at how, historically, access to ownership and down payments often come from intergenerational wealth — from parents’ or grandparents’ mortgage assets, says Shannon Vilhauer, executive director of Habitat for Humanity Oregon.

Tackling inequity requires reforming local, state and federal policies and increasing investments that will effectively expand access to credit and help pave the path to homeownership for underserved populations. Expanding homeownership opportunities also indirectly affects the ability and affordability of rentals for others.

“It’s important that all folks have the opportunity to move into the wealth-building opportunity of homeownership, thereby freeing up a spot a little lower down on the affordability spectrum on the rental side,” says Vilhauer. “We’re all part of the same continuum of housing stability, so making opportunities for stable housing at each level positively impacts us all.”

All of this is why the Cost of Home campaign supports advocacy for policies that increase and broaden access to safe and sound credit for underserved populations, including policies that address the homeownership gap for communities of color. Advocates and policymakers must acknowledge and address the well-documented historic patterns of racial discrimination that still impact the makeup and opportunities of our communities.

Solutions in action

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Learn more about efforts like the ones in D.C. and Oregon and how — when we come together — we can create lasting change through advocacy. Learn more about our Cost of Home campaign local policy successes.

Learn more | Cost of Home

Use these resources to learn more about policy solutions the Cost of Home campaign is working to achieve, the need for housing affordability and the ways local Habitat organizations are addressing the need for home affordability in their communities. 

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Success stories: Habitat’s advocacy achievements

As the Cost of Home campaign builds on our strong record of advocacy achievements, take a look at how these communities are successfully finding solutions and helping create policies that will allow 10 million individuals to meet their most basic needs.

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