The United States faced a housing affordability crisis long before the COVID-19 pandemic, but the public health crisis worsened existing challenges in constructing and preserving housing, and its economic shocks have further strained the market. Housing affordability issues disproportionately affect households of color because of structural inequities in housing and labor markets. Given these trends, JPMorgan Chase invests in innovative housing models that increase supply and open access to housing and homeownership opportunities to low- and moderate-income households of color.
Grantee Descriptions
Atlanta Neighborhood Development Partnership
Black households ready for homeownership have difficulty finding available affordable homes in the Atlanta metropolitan area because of a limited supply of affordable single-family homes and the market’s inability to develop traditional starter homes. Through this grant, the Atlanta Neighborhood Development Partnership is helping at least 500 families by developing affordable homes for sale and lease to low- and moderate-income (LMI) families in predominately Black neighborhoods in the 10-county Atlanta metropolitan area; deploying down payment assistance for LMI homebuyers to address the difficulties in accessing homeownership for families earning up to 80 percent of the area median income; building the capacity of Black-led affordable, single-family minority- and women-owned general contractors and affiliated real estate businesses through investments in their loan fund; and acquiring land for future development.
Center for Community Self-Help
Many first-generation homebuyers, particularly those of color, do not have access to intergenerational wealth and require a loan to purchase a home. Many also face additional exclusionary barriers, such as limited savings, high debt, and poor credit. Self-Help offers various products and supports to help households increase credit scores, build savings, and prepare for homeownership. Self-Help is piloting a new 100 percent loan-to-value product, a down payment assistance–like zero-interest mortgage called Equity Boost, and mortgage reserve savings accounts. Self-Help also offers products to alleviate high debt-to-income ratios, such as student loan buy-down programs and financial counseling.
Grounded Solutions
Homeowners face several financial stressors that can lead to foreclosure, including the costs of significant home repairs caused by deferred maintenance or natural hazards. Grounded Solution’s Sector Acceleration Program seeks to increase lasting affordable housing and to increase homeownership options for low- and moderate-income households of color, options that will be affordable for generations to come. The complex systemic barriers that limit access to affordable homeownership options for households of color demand multiple solutions. One approach is testing whether shared-equity homeownership can prevent and mitigate the impacts of foreclosure or the loss of a home because of home repair costs. The program uses a shared-equity mortgage conversion approach to offer distressed homeowners the choice to remain in their homes, preserve the accrued equity, and share in a portion of future appreciation by becoming part of a local shared-equity homeownership program. Another approach is to support shared-equity programs to adapt to housing market conditions and to expand their programmatic offerings, finding new ways to bring lasting affordable units online. Such programs include homebuyer-initiated programs that allow qualified households to find a home for sale through traditional market means that is made affordable by the shared-equity program and then is affordable to a qualified buyer after sale. Yet another approach promotes lowering acquisition costs, and therefore overall development costs, for new units with underused publicly owned land transferred or donated for lasting affordable housing development.
Housing Partnership Network
Housing prices are appreciating faster than incomes because of the underproduction of new homes and low supply of existing housing. Community development financial institutions (CDFIs) and nonprofit organizations have developed such tools as down payment assistance to expand access to homeownership, but current market conditions, particularly rising interest rates, have made producing affordable homes difficult. The Housing Partnership Network (HPN) is using a peer exchange model to bring together CDFIs that are expanding access to homeownership. This group will identify common challenges to launching or expanding mortgage lending business lines, as well as opportunities to expand solutions that reach underserved borrowers. The HPN is also participating in the Community Aggregators Group, a coalition of nonprofits working together to use the US Department of Housing and Urban Development’s new note sales policies to acquire homes that can be sold to first-generation or otherwise marginalized homeowners at an affordable price.
Parity
The practices of redlining, urban renewal, eminent domain, block busting, contract lending, and predatory lending nationwide and in cities like Baltimore have created an enormous racial wealth disparity, gutted healthy and thriving Black neighborhoods, and, in Baltimore specifically, has created more than 16,000 abandoned and blighted buildings. The acquisition of long-term abandoned properties remains the greatest opportunity for equitable reparation of historically redlined neighborhoods in Baltimore by moving large bundles of these properties back into production. Parity is expanding its housing model, which restores historically redlined neighborhoods in Baltimore and increases access to affordable homeownership opportunities by perfecting acquisition strategies of abandoned buildings, mitigating the loss of existing homeowners and residents, stabilizing construction costs, reducing the appraisal gap through advocacy and policy, and creating culturally relevant pathways and curricula for households to transition into ownership.
