Homeownership Alliance Policy Agenda
It is time for a renewed effort to boost the homeownership rates among people who have been shut out of the primary path to build assets in the U.S. There is no investment alternative that is as beneficial as homeownership for wealth building for Americans. Unfortunately, the benefits of homeownership are not evenly distributed throughout our society.
To read more about why we need policy changes to lessen economic inequality, click on Homeownership Case 2021
The Homeownership Alliance supports the creation of new resources to support affordable homeownership as well as incremental reforms in existing to programs to make them produce more affordable homes. The nonprofit developers and lenders that lead the Homeownership Alliance are working to prepare families for homeownership and finance, renovate and develop affordable homes that are assets for communities and the families that live in them. These policy recommendations are informed by Homeownership Alliance members’ experiences working to expand opportunity for low- and moderate-income families.
The Homeownership Alliance supports these new ideas to expand affordable homeownership: the Neighborhood Homes Investment Act, the Restoring Communities Left Behind Act, and new emphasis on homeownership in Community Development Financial Institutions Fund programs:
Improvements in existing programs
Federal Home Loan Bank System
The Federal Home Loan Bank System was created during the Great Depression to provide reliable liquidity to lenders for home mortgages and community investments. The 11 Federal Home Loan Banks are member-owned cooperatives that collectively borrow in the capital markets to make loans to members. This is an underutilized resource that should be tapped as a source of low-cost, long-term capital for homeownership lending and development.
Capital Magnet Fund
The Capital Magnet Fund was created in 2008 to be a source of flexible capital for affordable housing developers to leverage with other funds. It can be use for both affordable rental housing and homeownership, with preference for projects that serve lower income residents. Program reforms would make this resource easier to use for homeownership.
New Markets Tax Credits
The New Markets Tax Credits attract capital investments to distressed neighborhoods by giving investors in businesses in these neighborhoods credits on their federal taxes equal to 39% of their investment over seven years. An innovative use of the power of this tax incentive is to finance real estate construction companies that build affordable homes in qualified neighborhoods. This use should be encouraged.
Currently there is a serious inventory shortage of lower priced, high quality single family homes for potential homebuyers. Government policies regarding delinquent loans and foreclosed homes could be improved so that these properties can benefit families and neighborhoods.
HOME is an affordable housing program administered by states and localities that can be used for rental housing or homeownership. HOME use for homeownership projects has been declining in recent years, but with some streamlining of the HOME regulations, this resource could create more homeowners.
Homeownership Alliance Comment Letters