Housing and Homeownership
Homeownership has always been an essential component of the American dream and is one of the most important ways for low-income families and households of color to build wealth and move up the economic ladder. Yet, low- and moderate-income families face a number of barriers to homeownership. Downpayments and high closing costs, coupled with the tight prime credit market, make it challenging for many working families to obtain quality mortgages. States can offer direct grants and “soft second” mortgages (which are subsidized and/or forgivable loans to help boost a borrower’s equity) directly to borrowers, to play a pivotal role in assisting first-time homebuyers secure mortgage credit at fair rates and terms. This is particularly important in the current credit market. States can also fund homeownership education and counseling for prospective homebuyers and current homeowners.