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Small-Dollar Mortgages for Single-Family Residential Properties

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Abstract

There is a significant lack of financing available for low-cost homes, which many first-time homebuyers and low- and middle-income families rely on to move from renting to homeownership. This brief examines the availability of small-dollar mortgages (up to $70,000) for home purchases, refinances, and improvements, presenting a wealth of information on borrower and loan characteristics, production channels, and the geographic distribution of low-cost homes. We find that there is limited mortgage availability for the small loans needed to support the significant number of low-cost property sales and determine that low-cost properties could be a larger source of affordable housing if credit access for purchasing and rehabilitating these properties was expanded and improved.

Suggested Citation

  • Bing Bai & Taz George & Alanna McCargo & Sarah Strochak, 2018. "Small-Dollar Mortgages for Single-Family Residential Properties," Policy Discussion Paper Series 93558, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhpd:93558
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    References listed on IDEAS

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    1. Emily Engel & Taz George & Jason Keller, 2016. "Residential Mortgage Lending for Underserved Communities: Recent Innovations," Profitwise, Federal Reserve Bank of Chicago, issue 1, pages 11-19.
    2. Laurie S. Goodman & Christopher Mayer, 2018. "Homeownership and the American Dream," Journal of Economic Perspectives, American Economic Association, vol. 32(1), pages 31-58, Winter.
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    More about this item

    Keywords

    Homebuyers; Homeownership; Low Income; Middle Income; Mortgages;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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