Mortgage lenders continue to overwhelmingly favor White neighborhoods over Black neighborhoods, perpetuating cycles of underinvestment and racial inequity. The Mortgage Access Initiative is an effort to tackle this issue head-on.
Year after year, Woodstock Institute compiles and analyzes lending data showing that homeownership and the wealth-building opportunities it offers remain out of reach for people of color. In Chicago, this problem took on a renewed urgency when a 2021 WBEZ investigation found lenders had invested more in a single white neighborhood than all Black neighborhoods combined.
In this context, Woodstock Institute and Neighborhood Housing Services of Chicago (NHS) have brought together representatives of various types of mortgage lenders—credit unions, banks, and mortgage companies—for honest conversations about the systemic barriers to homeownership for people of color and how we can address them. These meetings marked the beginning of the Mortgage Access Initiative.
The Mortgage Access Initiative aims to break down each step of the mortgage lending process and use stakeholders’ expertise to identify the specific gaps and roadblocks that prevent mortgage credit from flowing towards underserved communities of color. After 18 months of meetings, we released the Phase 1 MAI report with the following policy recommendations:
- A proposal for an equitable mortgage product;
- Make homeownership more affordable for people of color by ensuring Federal Housing Administration (FHA) loans only go to borrowers ineligible for conforming loan products;
- Incentivize lending to people of color by addressing loan officer compensation structure and optimizing relationships with housing counselors.
These recommendations will help guide our advocacy efforts as we engage other actors in the mortgage lending process. We plan to continue this project by bringing in different stakeholders such as appraisers, real estate professionals, and representatives of government sponsored enterprises like Fannie Mae and Freddie Mac.