Summary of Policy Recommendations to Further Sustainable Lower-Income Homeownership

Mortgage lending Develop data-based criteria for responsible mortgage lending to lower-income homebuyers, including mortgage terms and underwriting standards
Adopt standards for responsible mortgages for lower-income homebuyers based on certain criteria
Prohibit secondary market access and use of public-sector funds in conjunction with mortgages that do not meet responsible standards
Conduct educational and outreach activities to make prospective borrowers aware of responsible mortgage products
Increase availability and visibility of meaningful pre-purchase education and counseling resources
Public subsidies for lower-income homeownership Provide public subsidies to build or rehabilitate housing for lower-income homeownership sparingly, only when (1) adequate housing at affordable prices is not available on the private market; and/or (2) the housing will serve a compelling neighborhood revitalization or other public purpose
Use public funds for down payment or closing cost assistance rarely if at all
Conduct research on the extent to which public down payment or closing cost assistance actually expands homeownership or provides meaningful net benefit for lower-income homeowners
Increase housing quality Increase efforts to inform prospective homebuyers about home-buying options
Provide easy access to affordable home inspection services for prospective homebuyers
Enact local ordinances requiring certificate of occupancy inspections or similar requirements for new purchases
Create programs with public funds to provide small loans to lower-income homebuyers to make home repairs and improvements to newly purchased homes
Foster sustainable ownership Expand availability of ongoing post-purchase counseling and crisis intervention services for homeowners
Create emergency assistance programs similar to the Pennsylvania HEMAP program at the state and local levels
Explore the use of mortgage products and property tax changes to mitigate the effect of income disruptions or price shocks on homeowners
Explore wider use of shared-equity homeownership models such as limited equity cooperatives and community land trusts

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