Homeownership is the cornerstone of financial stability and generational wealth for many American households. But the mortgage lending system has historically not served all households equally, as explicit discrimination in lending has affected households of color for years. This has created a significant need for specialized assistance to ensure equal credit access, leveling the playing field for all American households.

Established under the Equal Credit Opportunity Act (ECOA) of 1974, special purpose credit programs (SPCPs) offer banks an avenue to extend credit products to consumers who would not normally qualify under standard terms. Recently, lender participation in mortgage SPCPs has increased, spurred in part by guidance released from the Consumer Protection Financial Bureau that calls for lenders to create a “written plan” demonstrating the need for such a program and identifying who the program seeks to benefit through a “broad analysis” rooted in evidence and data.

In this report, we conduct an example market analysis to demonstrate the types of data that could be included in a written plan for an SPCP, using down payment assistance as the example credit product. We focus on a tristate area—Arizona, California, and Nevada—and explore the potential impact and design of such a program.

This report highlights data from the Urban Institute’s SPCP data toolkit to present evidence on the severity of gaps in homeownership and lending, racial wealth disparities and intergenerational gaps in homeownership/wealth in both the tristate area and nationally. Finally, we demonstrate how these data can inform the SPCP establishment of eligibility criteria and program targeting.