Citation URL: http://www.urban.org/KennethTemkin

This report, commissioned by the D.C. Department of Insurance, Securities, and Banking, examines the extent of subprime lending in the District of Columbia and the resulting impacts on residents and neighborhoods. The study found that subprime lending was concentrated in predominantly African-American, moderate-income neighborhoods, areas that are now experiencing a sharp rise in home foreclosures. The report recommends a number of actions to protect the city's homeowners and neighborhoods, including stronger monitoring of mortgage lenders, better outreach and education for home owners and home buyers, and creation of a loan fund to help persons refinance out of bad loans.

This study analyzes the extent to which the SBA's 7(a) and 504 programs serve borrowers facing capital gaps. Comparative and market share analyses show that women-, minority-owned, and start-up firms accounted for a higher share of the loans and larger share of lending volume under the 7(a) and 504 Programs compared to such firms' share of conventional small business loans. 7(a) and 504 loans went to firms that, on average, had lower sales and fewer employees than firms that received conventional small business loans. These differences suggest that SBA’s 7(a) and 504 Programs served borrowers who face a capital gap.

SBA programs are required to serve only borrowers unable to secure loans from another source. This report examines whether lenders comply with the credit elsewhere requirement, based on interviews with 23 commercial bank lenders that originate both SBA and conventional small business loans. Overall, lenders: are aware of the credit elsewhere requirement, say that SBA programs allow them to serve borrowers who do not meet standard conventional underwriting guidelines, indicate there is little overlap between SBA and conventional lending. SBA loans are offered with longer terms than conventional loans allowing borrowers, who commonly lack sufficient NOI, to meet DSCR requirements.

The SBIC program provides venture capital and mezzanine finance to start-up and expanding small businesses through SBICs, and is intended to fill the gap in smaller debt/equity financings, and to expand the reach of venture capital into underserved urban and rural markets. We find that debenture SBIC investments varied substantially from comparable private venture capital. Total financings by SBICs are much less likely to be in high-tech industries than those made by venture capital firms, are more dispersed regionally, and appear more likely to be in low- and moderate-income areas.

This report synthesizes the findings, conclusions, and policy recommendations derived from six reports generated by our evaluation of SBA's 7(a) Loan Guaranty, CDC 504 Loan, MicroLoan, and SBIC programs. The various studies were conducted to address three key research questions of particular interest to SBA and its constituents: 1) Does SBA assistance help the firms that receive it? 2) To what extent does SBA assistance serve its market? 3) Do SBA programs duplicate or overlap with other public sector programs?

The Housing Partnership Network (HPN) is a peer network composed of 87 nonprofit organizations involved in affordable housing as developers, lenders, managers, and providers of services to their residents. The members most commonly produce rental housing for low-income people, operating at large scale and on a regional rather than neighborhood level, and aiming for a high degree of financial self-sufficiency. In aggregate, they form a significant portion of the nonprofit industry in their fields of work. This study reports for the first time on their substantial productivity, the ways they do business to achieve their results, and the policy issues facing them as they grow.

This report, prepared for the D.C. Department of Housing and Community Development, reviews the state of fair housing in Washington, D.C., identifies impediments to fair housing choice for District residents, and recommends specific actions to remove or reduce those impediments. Based on data analysis and discussions with key informants, the report finds that participants in the city's real estate market are not always aware of, or do not always comply with, fair housing laws. Targeted, direct action and outreach are needed to ensure that the District of Columbia’s housing market is fair to all.

Supporters of urban revitalization have relied on community development corporations (CDCs) to carry a major share of the front-line burden. This research presents new evidence that these community-controlled, market-responsive organizations can indeed spark a chain reaction of investment. Advanced econometric analysis shows that CDC residential and commercial investments have led to increases in property values--the single-best measure of neighborhood improvement--as great as 69 percent higher than they would have been otherwise. To achieve these results, CDCs did more than just develop projects; they also brought business people, civic organizations, and public agencies into the neighborhood improvement process.

Millions of households conduct financial transactions without ever using mainstream financial services. Many of these consumers often rely on alternative financial service providers--check-cashing outlets, payday lenders, pawnshops, rent-to-own stores, and auto title lenders. These alternative, nonbank financial service providers often carry high costs, limiting low-income families' ability to accumulate assets and establish a credit history. This report investigates the location of three types of alternative providers--check-cashing outlets, payday lenders, and pawnshops--in eight diverse demographic and regulatory environments. For each site, the study presents a demographic profile of alternative provider neighborhoods as well as areas that contain geographic "clusters" of alternative providers. It also assesses whether the regulatory environment affects the number and location patterns of financial service providers.

This research examines the results and performance of loans to private businesses made by state and local governments through their own lending programs using HUD program funding. Relying on examination of nearly 1,000 loan files in 51 communities, researchers found that although default rates are somewhat higher than those of private-sector lenders, substantial amounts of new economic development money could be raised on a secondary market without undermining the policy goals of the federal programs that supply the funds. HUD could help arrange secondary market sales by accumulating and disseminating information and setting standards for loan underwriting, servicing, and documentation.

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