Equitably increasing access to credit

Credit is critical to buy a home, and homeownership is the primary source of wealth for most Americans. Yet, it’s difficult for many households to access, and minority and lower-income applicants often do not have access to credit at all or have access only to predatory credit. 

That’s why the Cost of Home campaign made equitably increasing access to credit one of its key areas of focus. 

map of the U.S. with orange dots

Check out our interactive map to see areas where local and state Habitat organizations have successfully changed housing policies to equitably increase access to credit.

Excluding low-wealth and families of color to access the credit for homeownership deepens existing racial, wealth, health and educational inequities. 

To combat these inequities, local and state Habitat organizations have successfully advocated for policies that increase and broaden access to credit for underserved populations, including policies that address the homeownership gap for communities of color. 

Strategies used to equitably increase access to credit for underserved populations:

  • Expansion of down payment assistance.
  • Adoption of tax policies that increase access to affordable homeownership for lower-income households.
  • Investments in homebuyer counseling and financial education.
  • Restrictions on predatory lending.
  • Increase in options for families in debt.
  • Income boosts for working families through state earned income tax credits.
  • Additional support for individual development accounts.

“By leveraging their equity, families can do repairs on their home, pay for a college education. They can invest.”

Doug Ryan, senior director of affordable homeownership at Prosperity Now.

What inequitable access to credit means

Generally, institutions that extend credit aim to serve wealthier populations because their business model largely depends on it, says Jesse Van Tol, president and CEO of National Community Reinvestment Coalition, an organization that champions fairness in banking, housing and business development.

Wealth building is intergenerational. If you start out with very little wealth, it makes it harder to build wealth,” he says. “A bank is more likely to want to make a $1 million loan than a $75,000 one because they make more money off the bigger loan. This ongoing discrimination creates impediments for low-wealth families, especially people of color, to access the credit they need to buy a home.”
 

“You can see a huge social injustice when you look at how, historically, access to ownership and down payments often come from intergenerational wealth — from parents’ or grandparents’ mortgage assets.”

Shannon Vilhauer, executive director of Habitat for Humanity Oregon

“It’s important that all folks have the opportunity to move into the wealth-building opportunity of homeownership, thereby freeing up a spot a little lower down on the affordability spectrum on the rental side,” says Vilhauer. “We’re all part of the same continuum of housing stability, so making opportunities for stable housing at each level positively impacts us all.”

Our impact

Check out our solutions in action:

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Though the Cost of Home campaign has concluded, the work continues. Learn how you can add your voice to support equitable access to credit for all.

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  • Aerial view of houses in a neighborhood

    Cost of Home impact

    Discover the impact the Cost of Home campaign on improving home affordability: explore policy successes supported by local and state Habitat organizations, strategies for advocacy practitioners to effect policy change and a policy assessment report by the Urban Institute.

    Read more
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    The solutions

    Achieving policy solutions in the four areas laid out by our Cost of Home campaign platform has enabled families to have greater access to homes they can afford — and to all the opportunities that follow.

    Read more