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There are increasing signs that affordable homeownership is being pushed out of financial reach for most U.S. families. High mortgage rates and steep property purchase prices have made the dream of families owning their own home seem ever more distant.
But nonprofit organizations believe they can help alleviate some of this stress. A few have written to the U.S. Department of Treasury suggesting a new plan that would allow them to have a more essential role in building and rehabilitating inexpensive homes.
CDFIs, or community development financial institutions, have traditionally been able to access funds for general housing through the Department of Treasury and the Department of Housing and Urban Development (HUD), but there are no specific set of grants for affordable home ownership work.
“There has not been a specific pot of funds dedicated just for providing capital for CDFIs to then be able to support affordable home ownership,” Elisabeth Coats, director of the National Community Stabilization Trust (NCST)’s Homeownership Alliance, told the Amsterdam News. “In a way with this letter, we’re not only asking for Treasury to establish something that’s very clear and delineated for home ownership, but we’ve also got lots of requesting correspondence with the Department of Treasury to say, all right, if you don’t want to establish your own program, let’s at least improve CDFI funds, financial assistance programs, or the capital magnet fund (a program through Treasury that is directly intended to support affordable housing).”
Small percentages of those funds are directed to home ownership, Coats contended, and even though the Treasury Department is making some efforts toward affordable housing, those can’t compare with the onslaught of corporate investors who have been able to use all-cash purchases to buy up single-family properties, which are then rarely rented or sold at affordable prices.
In their letter to Treasury Secretary Janet Yellen, the NCST and the Homeownership Alliance issued a call for the establishment of a program that would allow “mission-driven organizations” to build and rehabilitate affordable homes for low- and moderate-income (LMI) households.
“With an established program to multiply this crucial homeownership work, mission-driven organizations can grow their portfolios, create new homeowners, and keep LMI families in their homes,” their letter asserts. “American homeowners will not see relief through market forces alone, and the existing federal programs––while welcome––are insufficient to address affordability needs at scale.
“By establishing a source of flexible capital to support homeownership development, the Department of Treasury can counter the lack of supply, aligning directly with the Biden-Harris commitment to lower the cost of housing across the nation.”