In recent years, special purpose credit programs (SPCPs) have grown in popularity as a way for policymakers to allow lenders to offer credit to borrowers of protected classes. These programs can be people based or place based, offering special purpose credit to individual borrowers or to areas where many of them live, respectively. When implemented effectively, SPCPs can build wealth, reduce housing segregation, and help close the racial homeownership gap.
But how can lenders ensure that SPCPs help the households who need it most? In partnership with the National Fair Housing Alliance, the Urban Institute created this resource to help lenders document the need for SPCPs. This tool will help lenders with the first steps of the process outlined by guidance from the Consumer Financial Protection Bureau (CFPB), particularly assessing the need for an SPCP through a broad market analysis.
This tool offers current and historical market-specific data to make the case for SPCPs serving households of color; an interactive Excel file based on market-specific data to assess place-based versus people-based options that can be useful to program design, targeting, and goal setting; and documentation supporting the written plan.
Market and Disparity Analysis
Our metropolitan statistical area (MSA) page provides detailed data on homeownership and loan approval rate disparities by race and ethnicity. It also details disparities in three areas that inform the design of an SPCP: wealth, income, and credit. These data can provide background for lenders’ written plans and broad analyses, consistent with agency guidance.
Target Market Analysis
Choose an MSA to download a market-specific interactive Excel tool, available for download in .xlsx format. Users can adjust the target data by selecting from a list of program criteria options and automatically update the summary statistics. This tool gives users the ability to quantify how different criteria would affect the count, shares, and characteristics of households in the markets they serve.
Here is a tutorial video demonstrating how to use this interactive Excel tool.
Written Plan Documentation
According to the CFPB, a written plan must provide analysis that substantiates the need for an SPCP. The documentation provides background at a national level for a broad analysis that can be used in lenders’ written plans.
About
This project was funded by the National Fair Housing Alliance (NFHA). This toolkit was developed by Housing Finance Policy Center at Urban Institute, with research efforts led by Jun Zhu, Daniel Pang, John Walsh, Aniket Mehrotra, Jung Choi, and Janneke Ratcliffe. This tool builds on research in our Evidence of Disparities in Access to Mortgage Credit report. Christina Baird, Hayley Kaplan, Rachel Marconi, and Wesley Jenkins contributed to the creation of this data visualization.