Increasing access to small-dollar mortgages is a nuanced problem that will require creative solutions. But investing in these solutions will allow the dream of homeownership to reach many more families. Removing barriers to small-dollar mortgages through fee reduction, innovative partnership, and homebuyer education can turn lifelong renters into homeowners so they can start to build wealth. Due to persistent systemic oppression, families of color face increased difficulty in homebuying, partially because they are more likely to be first-time homebuyers. Thus, implementing policy that allows Black, brown, indigenous and other marginalized communities to buy homes and therefore create stability and build generational wealth is critical work.  

This winter, the Department of Housing and Urban Development (HUD) released a Request for Information regarding small-mortgage lending. Prosperity Now responded to this request with a comment letter discussing the ways the Federal Housing Administration’s (FHA) support for small mortgage lending could be improved so that the FHA can best fulfill its mission to underserved borrowers. 

A significant part of Prosperity Now’s work focuses on housing and homeownership because owning a home can offer families stability and a pathway toward generational wealth building. In fact, eliminating racial disparities in homeownership is one of the most powerful ways to narrow the racial wealth divide. But at the end of the day, as we discuss systemic issues and the policy solutions to address them, we can’t forget the real families and individuals whose day-to-day lives could be positively impacted by these changes. We can create a world where couples of color can buy a home together to build their families, and where families of color have beloved homes that will one day be passed down to their children.  

The FHA has an opportunity to strengthen its commitment to first-time homebuyers, low-income borrowers and communities of color. A commitment to exploring and expanding the ways the FHA can better serve homebuyers left behind by the current system is a necessary part of creating a fair economy with opportunities for all families to build wealth. Prosperity Now thanks HUD for this opportunity to comment and are hopeful for the future of FHA-supported small-dollar mortgages.