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Sustaining homeownership: the experience of city-based affordable homeownership
| Content Provider | Semantic Scholar |
|---|---|
| Author | Reid, Carolina K. |
| Copyright Year | 2009 |
| Abstract | foreclosures has sparked a renewed debate over the government’s role in promoting homeownership, particularly among low-income and minority borrowers. Increasingly, questions are emerging about the benefits of homeownership for lower-income households. Commentators on the crisis note that homeownership is not for everyone, and argue that efforts to expand homeownership opportunities for lower-income households are misguided at best. The most vocal of critics have argued that government programs designed to expand access to credit and homeownership, such as the Community Reinvestment Act (CRA) and the affordable housing goals established for Fannie Mae and Freddie Mac, helped to precipitate the current subprime meltdown. What these critics fail to consider, however, is that affordable homeownership programs have long been able to help lower-income families overcome the financial barriers to owning a home, and have done so in a way that is both responsible and sustainable. It is a mistake to conflate efforts to expand access to homeownership with the subprime lending boom: indeed, the dramatic rise in subprime lending may be better viewed as the antithesis of these efforts. Rather than support affordable homeownership, the characteristics of “subprime” lending—including high interest rates, high debt-to-income and loan-to-value ratios, limited documentation, and the layering of exotic loan terms such as interest-only and negative amortization payment schedules—all served to make homeownership a risky proposition, not only for lower-income families, but for many middleand upper-income families as well. Indeed, studies conducted by the Federal Reserve Board of Governors and the Federal Reserve Bank of San Francisco both found that subprime lending was not targeted Sustaining Homeownership The Experience of City-Based Affordable Homeownership Programs By Carolina Reid1 ye on C om m uity D evlopm nt |
| Starting Page | 27 |
| Ending Page | 30 |
| Page Count | 4 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.frbsf.org/community-development/files/reid_homeownership.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
