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Increasing Access to Sustainable Mortgages for Low-Income Borrowers

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Spring 2016   


Increasing Access to Sustainable Mortgages for Low-Income Borrowers


      • With its vertically integrated model that incorporates all aspects of homebuying under one roof and offers intense one-on-one support, Homewise is helping low- and moderate-income households pursue sustainable homeownership.
      • Manual underwriting allows Self-Help to serve nontraditional borrowers while its secondary market programs expand access to safe and sustainable mortgages to low-income households nationwide.
      • By partnering with community-conscious lenders and avoiding unsustainable mortgage practices, MassHousing has been able to help thousands of state residents attain homeownership while maintaining low default rates on its loans.

Photo shows a man holding a knife to cut vegetables on a cutting board in a hospital kitchen.

In 2011, Homewise partnered with CHRISTUS St. Vincent Regional Medical Center to help hospital employees such as Rafael, pictured above, realize the dream of homeownership. Corrie Photography

Homeownership continues to be an important avenue for building wealth in the United States, particularly among low-income and minority households. With safe and sustainable mortgages, homeowners can stabilize their monthly housing costs, build equity, and accumulate wealth over the long term through automatic savings associated with self-amortizing loans.1 Following the foreclosure crisis, access to affordable home loans has been extremely limited for lower-income borrowers with less-than-pristine credit (see “Pressing Challenges in Housing Finance: Credit Access and Seniors’ Mortgage Debt”). Although traditional lenders have tightened lending standards and restricted credit access, mission-driven entities such as community development financial institutions (CDFIs) and state housing finance agencies have long helped nontraditional borrowers and others underserved by the mainstream mortgage market. This article examines three organizations — Homewise, Self- Help, and MassHousing — that expand access to safe and affordable credit and sustainable homeownership for low-income and minority households. These organizations provide mortgages that often come with low interest rates and downpayment requirements, homebuyer education and counseling to prepare households for homeownership, and flexible underwriting criteria based on individual borrowers’ circumstances.

Facilitating Homebuying With an Integrated Approach

Santa Fe-based Homewise is a nonprofit CDFI with a mission to promote homeownership and improve the financial vitality of New Mexico communities. Since its inception in 1986, Homewise has helped more than 3,000 households purchase homes through comprehensive homebuying programs including training and counseling, affordable mortgages, savings programs, and real estate services. The organization’s counseling and financial training programs have helped scores of borrowers improve their credit profiles and increase their savings in preparation for buying a home.2 Homewise originally provided only home improvement services. Beginning in the mid-1990s, however, Homewise expanded its focus to include all aspects of the homebuying process in response to an increasingly unaffordable Santa Fe housing market — by 2000, the median value of a home in Santa Fe County had reached $189,000 compared with $108,000 for New Mexico as a whole and $120,000 for the nation as a whole.3 Around the same time, Homewise received CDFI certification from the U.S. Department of the Treasury, a designation that allows it to tap federal funds to support efforts to increase homeownership for low-income households. More recently, Homewise expanded into the Albuquerque market with HomeLIFT, a national program sponsored by NeighborWorks America and Wells Fargo that provides downpayment assistance, education, and credit counseling for homebuyers.4

Homebuyer Preparation. Homewise’s business model brings the full range of home purchase services under one roof. Homewise counselors, in coordination with in-house real estate agents and lending staff, support clients from the initial prepurchase inquiry until the buyer closes on a home. One key aspect of this arrangement, says Homewise chief executive officer Mike Loftin, is that “Homewise counselors help customers determine the price of the home they can afford before the potential buyer finds and gets attached to the perfect, but overpriced, home.” Loftin has found that homebuyers make more financially sustainable choices if they begin with a clear understanding of their price range.5

In conjunction with this one-on-one support, Homewise offers clients courses in homebuyer education and financial fitness. Homebuyer education helps borrowers reduce unnecessary costs by, for example, teaching them how to shop for the best mortgage and understand monthly costs.6 Financial fitness classes help borrowers improve their credit score, save for a downpayment, and learn the basics of personal finance.7 Homewise also offers a downpayment savings program, SaveSmart, through which clients set a monthly savings goal and receive $250 off closing costs when they reach this goal. According to a 2015 Urban Institute analysis of Homewise, 55 percent of people who took the financial fitness class between 2009 and 2013 improved their credit score by 10 or more points, and 73 percent increased their savings, including 23 percent who saved $15,000 or more.8 A Homewise analysis of its 2014 data showed that clients increased their credit score by an average of 17 points. For those starting with credit scores below 640, the increase was 83 points.9

A mother and her two daughters stand in front of their new home.
Annette Naranjo used a loan from Homewise to purchase her first home and in the process became Homewise’s 3,000th homeowner. InSight Foto Inc.

Affordable Mortgages. Homewise offers various loan products, including first and second mortgages, downpayment assistance loans, and home improvement loans, that the organization originates and services in house.10 The first and second lien mortgages allow low-wealth households to purchase homes with a downpayment of as little as 2 percent. The first lien mortgage covers 80 percent of the purchase price, eliminating the need for mortgage insurance, and is eventually sold to Fannie Mae. The second lien is also a fixed-rate loan and is serviced and held by Homewise. Because Homewise’s in-house real estate agents, brokers, and servicers are salaried rather than commissioned workers, they have no financial interest in upselling customers.11 This structure allows greater control over “loan-level pricing adjustments” (such as loan-to-value ratio and credit scores) that can increase the cost of the loan.12 Homewise estimates that its use of a first and second mortgage lowers homeowners’ monthly payments by $140.13

The first and second mortgage structure, although cheaper for the borrower, creates risk for Homewise because it holds the second mortgage. If the borrower defaults, Homewise is paid only after the first mortgage has been paid in full. Second mortgages typically carry higher interest rates to offset this risk. Loftin, however, says that Homewise keeps its interest rates low and manages the risk by “really knowing the customer” — specifically, the loan amount that a particular customer can afford and the likelihood that the customer will repay the loan.14

Success of the Model. In 2015, Homewise made $48 million in loans throughout New Mexico to 375 households for new homes, refinancing, and energy or safety improvements.15 Most of Homewise’s clients are first-time homebuyers earning low to moderate incomes. The median income for a Homewise buyer in 2014 was $49,145 compared with a median income of $61,412 for owner-occupied households in the Santa Fe metropolitan area. Moreover, in 2014, 40 percent of Homewise’s buyers earned less than 80 percent of the area median income (AMI), and 58 percent were Hispanic.16 The default rate on Homewise’s loans, even during the foreclosure crisis, was very low. For all loans serviced between 2009 and 2013, 1.1 percent were seriously delinquent (late by 90 days or more); by comparison, the Federal Housing Administration’s (FHA’s) serious delinquency rate ranged from 7.3 to 9.5 percent during the same period. From 2009 to 2011, the percentage of seriously delinquent prime, fixed-rate loans in the United States fluctuated between 4 percent and 7 percent.17

Homewise’s low default rates are attributable in part to several structural elements of the model designed to help borrowers succeed. First, the vertically integrated business model allows Homewise to control most aspects of the purchase process, keeping costs low for the borrower. Homewise does not relax its credit standards, choosing instead to work with borrowers to improve their financial fitness and ensure that they are ready to purchase a home.18 Homewise is also directly tied to the success of a borrower through the second loan; Loftin considers this “an essential component of [Homewise’s] business model, to share risk over time and have skin in the game.”19 This means that Homewise helps borrowers at risk of default before they miss payments so that the borrowers avoid paying additional fees. Finally, Loftin explains that Homewise avoids operational grants so that “programmatic growth does not outstrip revenue growth.” Although Homewise does apply for grants to enter new markets, it relies on revenue from loan origination and its other services to support new loans, a feature that helps ensure that the organization remains focused on helping the client purchase a home and that Homewise is not overextended. Loftin believes that the Homewise model is adaptable but cautions that organizations should judiciously add pieces to their existing services instead of attempting to deploy a comprehensive model all at once.

Helping Underserved Borrowers Become Homeowners

The Center for Community Self-Help (Self-Help), founded in 1980, is one of the largest CDFIs in the nation. Self-Help initially helped rural North Carolina workers start their own businesses and started making home loans in 1985 to families who were unable to get traditional mortgages. The affiliated Self-Help Credit Union (SHCU) was formed in 1984 in Durham, North Carolina; following mergers with other credit unions in the state, SCHU has grown to more than 20 branches with $650 million in assets and serves 60,000 North Carolinians. In 2008, Self-Help launched the Self-Help Federal Credit Union in California and later Illinois and Florida, which together serve more than 80,000 people. The Self-Help family also includes the Center for Responsible Lending, a nonpartisan research center working to eliminate abusive financial practices, and the Self-Help Ventures Fund, a loan fund that manages Self-Help’s riskier loans and its secondary market mortgage program.20

A woman and her grandson stand leaning on the railing of her home’s front porch.
Elizabeth Mobley, pictured above with her grandson, used a loan from Self-Help to purchase a home a block from where she grew up in Charlotte, North Carolina. Photo courtesy of North Carolina Housing Finance Agency

Self-Help Loan Products. Through its credit unions, Self-Help originates affordable home loans to many borrowers shut out or underserved by traditional credit markets, such as immigrants; lower-income, minority, or female-headed households; and borrowers with imperfect credit histories. Eighty percent of loans through SHCU are to low-income households earning less than 80 percent of AMI, and 70 percent are to minorities.21 Since its founding, Self-Help has originated 6,300 loans totaling $527 million to homeowners.22 All loans issued through SHCU are manually underwritten, permitting loan officers to apply flexible underwriting standards for credit scores, sources of income, income-to-debt ratios, and past debt, particularly medical debt. About half of all SHCU borrowers do not have a documented credit score, and many other borrowers have low credit scores, says Deborah Momsen-Hudson, vice president and director of secondary marketing at SHCU. SHCU uses alternative credit scoring that considers rental, utility, and cell phone payment histories, among other measures, to determine the creditworthiness of these borrowers.23 Funding for Self-Help’s loan products primarily comes from the deposits in the credit unions. Other sources include foundation and government grants, investment income, interest on loans, and fees.24

In addition to site-built homes, SHCU offers loans to purchase manufactured homes, a common housing option in North Carolina. Manufactured homes account for more than 13 percent of the state’s overall housing stock, and this percentage is much higher in many rural counties.25 SHCU offers 30-year, fixed-rate loans for manufactured homes that have no mortgage insurance and require a downpayment of only 5 percent. Borrowers’ credit scores can be as low as 580, and the home must have been in place for 1 year and be owner occupied. The purpose of these loans, says David Beck, media and policy director at Self-Help, is to help households build wealth and stability by purchasing the land the home sits on rather than the physical unit, which can depreciate quickly.26

The Community Advantage Program. Self-Help also expands prime lending to otherwise ineligible low-income households through its secondary market programs, the Community Advantage Program (CAP) and the recently announced Affordable Loan Solution program. Self-Help first entered the secondary market in 1994 with the purchase of $20 million in nonconforming loans from Wachovia, which freed up capital for Wachovia to continue making loans to low- and moderate-income borrowers. Self-Help launched CAP in 1998 as a national program in partnership with Fannie Mae, which agreed to purchase $2 billion worth of loans, and the Ford Foundation.27 Through CAP, Self-Help serves as a financial intermediary between lenders and investors. Using guidelines approved by Self-Help, lenders make loans to low-income borrowers. Self-Help purchases the loans and sells them to Fannie Mae. Banks that sell mortgages to Self-Help commit to using the proceeds to make additional mortgages to lower-income families. Self-Help is ultimately responsible for the loan; if a borrower defaults, Self-Help will purchase the mortgage back from Fannie Mae using a loss reserve fund that was established with a $50 million grant from the Ford Foundation. This arrangement frees up financing for mortgage originations to low-income borrowers because investors in the mortgage-backed securities have confidence that they will recoup their investment.28

Through the secondary market program, Self-Help is able to significantly expand prime lending among many borrowers shut out of the market. The program has provided $4.5 billion in financing to support more than 50,000 low- and moderate-income homebuyers nationwide.29 CAP borrowers are typically low-income earners, and a significant percentage are women and minorities.30 Many CAP borrowers would also be otherwise ineligible to receive prime loans because of low credit scores, high debt-to-income ratios, or insufficient funds for downpayments. Eighty-eight percent of borrowers would have failed to meet one of these three standards, and more than 69 percent of borrowers put down less than 5 percent of the purchase price.31

A row of houses within a subdivision.
Self-Help and several local partners developed Elizabeth Heights, a 36-unit affordable housing subdivision for first-time homebuyers in Charlotte, North Carolina. Photo courtesy of North Carolina Housing Finance Agency

An evaluation of 46,000 CAP borrowers by the University of North Carolina Center for Community Capital found that homeowners in the CAP program had defaulted at rates that were much lower than those of similar borrowers with subprime adjustable and subprime fixed-rate loans, and they saw significant gains in household wealth.32 At the height of the subprime crisis in the fourth quarter of 2009, CAP loans had a default rate of 9.6 percent compared with 47.7 percent for subprime adjustable-rate mortgages and 22.1 percent for subprime fixed-rate mortgages. CAP participants also realized significant growth in the equity of their home. Through the first quarter of 2014, the median equity gained was $21,727. CAP borrowers also saw their overall net worth increase by $11,000 between 2008 and 2014 compared with renters, who saw only a $742 increase in their net worth over the same period.33

CAP loans slowed following the housing crisis. “As with all mortgage markets, the 2008 recession greatly reduced the volume of CAP loans as incomes and qualified borrowers fell and lenders retrenched,” reports Momsen-Hudson. Although a number of loans are still being serviced, new originations have mostly stopped.34 In February 2016, Self-Help launched a new partnership with Bank of America and Freddie Mac called the Affordable Loan Solution program to increase liquidity in the secondary market for lower-income originations. The program is similar to CAP: Bank of America will originate loans through its 4,700 financial centers, and Freddie Mac will purchase the loans while Self-Help takes on the default risk. Borrowers must use the home as their primary residence, earn less than 100 percent of AMI, and complete a homebuying education course if they are first-time buyers.35

Self-Help deploys several strategies to reduce the risk of the loans in its secondary market programs. For CAP, Self-Help worked with about 35 lenders to originate loans but consolidated the riskiest of those loans with 2 “high-touch” servicers. High-touch servicers stay engaged with borrowers and provide counseling, financial education, and other support as needed. These services, explains Momsen-Hudson, are crucial for reducing financial loss and helping borrowers keep their homes. For example, lenders will intervene on loans that are 6 days past due instead of waiting the industry-standard 16 days.36 This practice helps borrowers avoid costly late payment penalties and stay current on their mortgages. Several studies have shown that counseling can help borrowers avoid default, remain in their homes, and make their mortgage current if they’ve missed a payment (see “The Evidence on Homeownership Education and Counseling”). For the new Affordable Loan Solution program, Self-Help will continue to provide high-touch services to borrowers.37

The CAP loan products were also constructed to make repayment easier for borrowers and reduce the risk to Self-Help. Limits on loan size meant that even during the crisis, Self-Help was not on the hook for excessively large loans. All CAP loans were also fully documented to prevent fraud and fully escrowed, meaning that related expenses such as insurance and property taxes were taken out monthly rather than at the end of the year. Escrowing helps borrowers plan their expenses rather than take a “huge cash-flow hit” at the end of the year, says Momsen-Hudson. Finally, Self-Help kept monthly payments low by limiting the number of fees and points that loan originators can add to the loan. Limiting fees had the added benefit of attracting lenders that were more interested in making quality loans than in making excessive profits off of the loan.38

Photo of a vacant single-family home with overgrown plants in the front. Photo of the single-family home after renovation.
A formerly vacant home in New Bedford, Massachusetts, was revitalized as part of the BuyCities program. City of New Bedford; MassHousing

Making Homeownership a Reality in Massachusetts

State housing finance agencies (HFAs) are state-chartered, mission-oriented housing agencies that increase affordable housing for low-income households in their respective states. These agencies use mortgage revenue bonds to issue affordable home loans and have helped more than 3 million first-time homebuyers since the 1960s.39 Researchers studying the evolving role of state HFAs have found the entities to be “highly effective in addressing important market functions while at the same time fulfilling the public purpose of facilitating access to mortgages to creditworthy but otherwise underserved borrowers.”40 The state of Massachusetts’ HFA, MassHousing, has provided loans to more than 60,000 homebuyers since it began its first homeownership loan program in 1979.41 In 2006, MassHousing became one of the first state HFAs to create mortgage-backed securities (MBS) for sale on the secondary market. MassHousing’s loan programs have helped thousands of low-income households attain homeownership while maintaining low default rates, even during the housing market crash and foreclosure crisis.42

Using Bonds and Securities To Finance Affordable Mortgages. MassHousing’s homeownership division provides 30-year, fixed-rate mortgages as a wholesale lender and does not originate loans. Instead, the organization purchases mortgages from lenders throughout the state using capital raised from Fannie Mae and private investors rather than taxpayers.43 From its creation until 2006, MassHousing relied exclusively on mortgage revenue bonds (MRBs), which are tax-exempt bonds sold at below-market interest rates, to fund loan purchases. Although this system worked for a number of years, MassHousing’s bond capacity was capped at $200 million and was not raised as the average price of mortgages increased. According to Peter A formerly Milewski, director of homeownership lending and the mortgage insurance fund at MassHousing, the cap meant that over time, MassHousing could purchase fewer and fewer loans and would be in and out of the market, creating uncertainty and instability for lenders.44

Beginning in 2006, MassHousing partnered with Fannie Mae to create MBS to access more funds to finance affordable mortgages. MassHousing creates its MBS with mortgages purchased from a network of 170 originators. Once the MBS is created, it can either be used as collateral for an MRB (and thus tap into the bond market) or sold on the to-be-announced (TBA) market. The TBA market is a market for 15- and 30-year, fixed-rate mortgage-related securities in which the securities being traded do not have to be specified when the trade is made (hence the name “to be announced”).45 MassHousing can select either the bond or TBA market depending on which one offers the best price on a given day. Accessing the TBA markets also allows MassHousing to make more loans than it otherwise could; from 2010 to 2015, MassHousing’s average yearly lending for single-family homes was $693 million, an increase of 262 percent from the 2000 to 2005 period, before the MBS program began. Furthermore, during the recent economic downturn, MassHousing could fund mortgage loans when many state HFAs dependent on MRBs had to scale down or suspend lending.46

Photo shows a family of five and their dog posing in front of their home.
The Noyes family was able to use a Home for the Brave loan to purchase an affordable home in Wrentham, Massachusetts. Mike Ritter

Mortgage Loan Products. MassHousing funds loans for home purchase, refinance, or improvement. Loans include those without mortgage insurance (in partnership with Fannie Mae) and with low interest rates, low downpayment requirements, flexible underwriting, and mortgage payment protection in the event of unemployment.47 Borrowers with a downpayment of less than 10 percent must complete a homebuyer education course. MassHousing offers an online course called “The Road Home” and in-house delinquency counseling as well as courses with partnering counseling agencies.48 A risk-sharing program with Fannie Mae allows MassHousing to originate loans without mortgage insurance; borrowers are charged a slightly higher interest rate that is passed on to Fannie Mae as a guarantee fee in lieu of mortgage insurance. MassHousing agrees to take on early payment default risk for these loans, meaning that the organization agrees to take any loss at foreclosure. Taken together, the savings from forgoing mortgage insurance can outweigh the cost of the higher interest rate.49 Through its Mortgage Insurance Fund, MassHousing also offers MI Plus, a program that helps borrowers make payments for up to six months in the event that they experience unemployment. About 1,000 borrowers have accessed benefits from the MI Plus program since it began in 2005, and 850 are still in their homes because of it.50 In addition to products targeted to low- and moderate-income homebuyers, MassHousing created two loan programs for current and former members of the military designed to fill coverage gaps in U.S. Department of Veterans Affairs loans. Operation Welcome Home provides a low-interest first mortgage covering up to 97 percent of the purchase price and a zero-interest second mortgage covering up to 3 percent, and Home for the Brave loans cover up to 97 percent of the purchase price. The lenders hold the loan in their portfolio, and MassHousing provides insurance through its Mortgage Insurance Fund.51

MassHousing also has loan programs that target specific geographic areas. The Buy Cities program works with local lenders to provide low- or no-downpayment mortgages in cities such as New Bedford or Worcester that have lost large numbers of manufacturing jobs and have high poverty levels. The program works by creating local partnerships and leveraging the contributions of those partners. According to Milewski, lenders, local city officials, real estate agents, and retail businesses agreed to create a bundle of products and services to make homebuying easier.52 With the city of Worcester’s “Buy Worcester Now” program, lenders reduced interest rates for MassHousing-sponsored loans, and real estate agents incorporated the program into their marketing. Local partners, including universities, a hospital, and an insurance company, offered employer-sponsored downpayment and closing cost assistance. About $100 million in loans have been made through the Buy Cities program.53

MassHousing’s Successes. In 2015, MassHousing helped more than 3,000 low- and moderate-income families purchase or refinance a home in the state. The agency reported having 22,000 loans valued at $4.1 billion in its portfolio as of June 2015.54 At the end of fiscal year 2015, the delinquency rate for all of MassHousing’s single-family home loans was 3.2 percent.55 Even during the foreclosure crisis, MassHousing’s single-family home loan delinquency rate was 4.4 percent at the end of fiscal year 2011 compared with FHA’s 10.1 percent delinquency rate during the same period.56 Milewski attributes MassHousing’s low default rates to avoiding unsustainable mortgage practices and the excesses of the housing crisis. Specifically, he notes that MassHousing’s loans are fully documented 30-year, fixed-rate loans for owner-occupied homes. Borrowers putting less than 10 percent down complete a “fairly extensive homebuyer counseling program,” says Milewski, which helps prepare them for owning and keeping a home. MassHousing has also built strong relationships with its local lenders and counseling agencies. Milewski notes that these organizations have demonstrated a commitment to sustainable housing and community reinvestment.57

Photo shows a family of six posing in their backyard.
MassHousing’s lender-paid mortgage insurance and 3 percent downpayment requirement made homeownership a reality for the Abreau family. Mike Ritter


Homewise, Self-Help, and MassHousing programs demonstrate the viability of lending to creditworthy low-income borrowers underserved by the mainstream mortgage market. These organizations are helping thousands of low-income families achieve and sustain homeownership by providing access to safe and affordable loans, offering downpayment assistance and homebuyer training, and working with borrowers at risk of default. Counseling and educational services, in particular, promote buyer readiness by improving credit scores, boosting savings, and instilling a sound understanding of personal finances. Homewise’s model of low-downpayment loans without mortgage insurance, for example, ensures that borrowers are thoroughly prepared for the responsibility of a mortgage through rigorous homeownership classes, one-on-one counseling, and financial fitness training. According to Homewise’s Loftin, “Our philosophy is that we want to minimize the barriers to entry in terms of downpayment, but let’s improve financial habits, not reduce standards.”58 Even after a borrower has taken out a loan, high-touch servicers are “worth every penny,” says Momsen-Hudson. With CAP, Self-Help found it critical to work with reputable lenders that are willing to intervene early and often when borrowers are in trouble. Momsen-Hudson believes that “whom we chose to do businesses with really matters.” CAP limited the amount of fees a lender could charge so that “lenders weren’t only interested in making a profit.”59 MassHousing’s loan programs also found success by working with “community conscious” lenders, says Milewski.60

Overall, the foreclosure crisis has wrought only minor changes for these organizations. Homewise has expanded outreach to counteract the attitude that homeownership is unaffordable or unobtainable. And Self-Help recently retooled its secondary market program as tightening credit standards shrank the number of new mortgages. The core mission and strategies of Homewise, Self-Help, and MassHousing, however, have remained consistent throughout the Great Recession and the postrecession period. According to Milewski, “Our vision, mission, goals, or objectives have not changed in eons. We are doing business philosophically the very same way we were doing it — a commitment to safe, affordable homeownership.”61 In many ways, the housing market crash reinforced the strength of their lending models. The programs’ low default rates demonstrate that a well-constructed home loan for a low-income borrower is a good credit risk even during the worst housing crisis in a century.

Related Information:

Programs for Older Homeowners

  1. Christopher E. Herbert, Daniel T. McCue, and Rocio Sanchez-Moyano. 2013. “Is Homeownership Still an Effective Means of Building Wealth for Low-income and Minority Households? (Was it Ever?),” Joint Center for Housing Studies of Harvard University, 2.
  2. Homewise. “About Us” ( Accessed 3 February 2016; Homewise. 2015. “From House To Home: 2015 Annual Report,” 3; University of North Carolina Center for Community Capital. 2014. “Regaining the Dream: Case Studies in Sustainable Low-Income Mortgage Lending,” 19.
  3. U.S. Census Bureau. 2000. “Profile of Selected Housing Characteristics: 2000 more information Census 2000 Summary File 3 (SF 3) - Sample Data.”
  4. Email Correspondence with Mike Loftin, chief executive officer of Homewise, 14 March 2015; WellsFargo. “The Wells Fargo LIFT Programs” ( Accessed 14 March 2016; Neighborworks America. “LIFT Programs” ( Accessed 28 March 2016.
  5. Interview with Mike Loftin, chief executive officer of Homewise, 23 February 2016; Abigail Pound. 2011. “Challenges and Changes in Community-Based Lending for Homeownership,” NeighborWorks America and Joint Center for Housing Studies of Harvard University, 10.
  6. Homewise. “Attend a Class” ( Accessed 14 March 2016.
  7. Ibid.
  8. Brett Theodos, Christina Plerhoples Stacy, and William Monson. 2015. “A New Model for the Provision of Affordable Homeownership,” Urban Institute, 10, 19.
  9. University of North Carolina Center for Community Capital, 19.
  10. Homewise. “Becoming a Homeowner” (www.home­ Accessed 28 March 2016; Homewise 2015, 1.
  11. Interview with Mike Loftin; Theodos et al., 11; University of North Carolina Center for Community Capital, 18–9.
  12. Ibid.
  13. Theodos et al., 9.
  14. Interview with Mike Loftin.
  15. Homewise 2015, 9.
  16. U.S. Census Bureau. 2014 American Community Survey 1-Year Estimates; University of North Carolina Center for Community Capital, 18–9.
  17. Theodos et al., 22.
  18. University of North Carolina Center for Community Capital, 19.
  19. Interview with Mike Loftin.
  20. Email correspondence with David Beck, media and policy director at Self-Help Credit Union, 23 March 2016; Center for Community Self-Help. “Self-Help Credit Union” ( Accessed 3 February 2016.
  21. Email correspondence with David Beck, 23 March 2016.
  22. Data presented are for the period from 1980 to 2014; Martin D. Eakes. 2015. “A Future for Community Credit Unions,” presentation for the National Federation of Community Development Credit Unions, 24 September; Center for Community Self-Help. 2014. “Community Impact 1980 – 2014.”
  23. Interview with Deborah Momsen-Hudson, vice president and director of secondary marketing at Self-Help Credit Union, 25 February 2016.
  24. Interview with David Beck, 25 February 2016.
  25. U.S. Census Bureau. “2010–2014 American Commu­nity Survey 5-Year Estimates” ( Accessed 29 March 2016.
  26. Interview with David Beck.
  27. Roberto Quercia, Allison Freeman, and Janneke Ratcliffe. Regaining the Dream: How to Renew the Promise of Homeownership for America’s Working Families, Washington, DC: Brookings Institution Press, 30–3.
  28. Interview with Deborah Momsen-Hudson; University of North Carolina Center for Community Capital, 4.
  29. Eakes.
  30. In 2010, the median household income for CAP borrowers was $30,792; 41 percent were women and 42 percent were minorities. See also Quercia et al., 30–3; University of North Carolina Center for Community Capital. 2014. “Community Advantage Panel Study: Sustainable Approaches to Affordable Homeownership,” 3.
  31. Allison Freeman. 2014. “The Continuing Importance of Homeownership: Evidence from the Community Advantage Program,” University of North Carolina Center for Community Capital, 2.
  32. University of North Carolina Center for Community Capital. 2014. “Community Advantage Panel Study,” 4; 6.
  33. Freeman, 2.
  34. Interview with Deborah Momsen-Hudson; email correspondence with David Beck, 22 April 2016.
  35. Self-Help. “Secondary Mortgage Market Program” (­vate/secondary-mortgage-market). Accessed 14 March 2016; Bank of America. 2016. “Bank of America Launches Affordable Lending Mortgage Program to Help Low- and Moderate-Income (LMI) Homebuyers,” press release, 22 February.
  36. Interview with Deborah Momsen-Hudson.
  37. Ibid.
  38. Ibid.
  39. National Council of State Housing Agencies. “About HFAs” ( Accessed 3 February 2016; National Council of State Housing Agencies. “Housing Bonds” (­cy-issues/housing-bonds). Accessed 3 February 2016.
  40. Stephanie Moulton and Roberto G. Quercia. 2013. “Access and Sustainability for First Time Homebuyers: The Evolving Role of State Housing Finance Agencies,” Joint Center for Housing Studies of Harvard University, 2.
  41. Created in 1966 by the state legislature, the Massachusetts Housing Finance Agency started operating as MassHousing in 2001.
  42. MassHousing. “MassHousing History” ( Accessed 5 February 2016.
  43. MassHousing. “MassHousing Mortgages” (­ing-mortgages.html). Accessed 14 March 2016.
  44. MassHousing. n.d. “MassHousing’s Fannie Mae MBS Execution”; Interview with Peter Milewski, 1 March 2016.
  45. James Vickery and Joshua Wright. 2013. “TBA Trading and Liquidity in the Agency MBS Market,” New York Federal Reserve Board, 1–5.
  46. MassHousing, n.d.; Interview with Peter Milewski; Tom Gleason. 2015. “Affordable Lending is a Good Business Decision,” Industry Voice, 8 October.
  47. Mortgage loan limits based on income vary depending on location and family size. For example, the mortgage loan limit is approximately $800,000 for a family of four and $533,000 for a family of two. See also MassHousing. “Loans for Home Buyers” ( Accessed 5 February 2016.
  48. MassHousing. “MassHousing Mortgages” ( Accessed 14 March 2016.
  49. Interview with Peter Milewski.
  50. MassHousing. 2015. “MassHousing Mortgage Insurance Fund added as an approved primary Mortgage Insurance provider by the Federal Home Loan Bank of Boston,” press release, 19 August.
  51. MassHousing. “Operation Welcome Home” ( Accessed 4 May 2016; Operation Welcome Home loans are for first-time homebuyers whereas Home for Brave loans can be used for purchase or refinancing; Interview with Peter Milewski.
  52. Interview with Peter Milewski.
  53. Ibid.; MassHousing. 2015. “Homeownership – Empowering New Buyers: MassHousing’s Buy Cities Program.”
  54. MassHousing. 2015. “Standard & Poor’s upgrades MassHousing’s Issuer Credit Rating to AA-,” press release, 11 December.
  55. MassHousing. “MassHousing Financials” ( Accessed 5 February 2016; MassHousing. 2015. “Michael J. Dirrane appointed by Governor Baker as Chairman of MassHousing,” press release, 8 September.
  56. MassHousing. 2014. “MassHousing 2014 Annual Report”.
  57. Interview with Peter Milewski.
  58. Interview with Mike Loftin.
  59. Interview with Deborah Momsen-Hudson.
  60. Interview with Peter Milewski.
  61. Ibid.


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