Special Purpose Credit Programs

Addressing Inequality Through Mortgage Lending

A crucial extension of our nation’s Fair Housing Act, Special Purpose Credit Programs (SPCPs) were created as a provision of the Equal Credit Opportunity Act to expand access to credit for communities and populations that have historically lacked equal access to credit.    

Homes by CFE’s Down Payment Assistance (DPA) Program is an SPCP that expands homeownership opportunities for Black and Latinx families, where equal access to affordable mortgages has been lacking. SPCPs provide much-needed clarity on how lenders like Homes by CFE can close the homeownership gap for those who have been so profoundly impacted by economic inequality that they lack the savings to cover increasing down payment and closing costs.   

Although DC is a challenging housing market for any low- to moderate-income household, the city has a history of racial discrimination in housing that has resulted in deep racial housing and wealth gaps. For example:  

  • The average white household in the United States has an annual income of $150,380, and only $67,850 and $80,000 for Black and Latinx households, respectively (Lending Tree).   
  • In addition to having lower annual income, Black and Latinx individuals typically have less money in their bank accounts. White US residents average $51,600 in their accounts, while Black and Latinx residents averaged $13,300 and $11,800, respectively (Federal Reserve). An Urban Institute report indicates a more drastic disparity for DC residents. The typical Black household has only $2,100 in liquid assets, which is $2,700 for Latinx households, while the average white household has over $65,000.    
  • Additionally, Black households in DC have a median net worth of less than $4,000, and Latinx households’ median net worth is $13,000. This number is $284,000 for white households.   

With a clear mission to give Black and Latinx borrowers more equitable access to capital, Homes by CFE’s Down Payment Assistance (DPA) Program aims to level the playing field by offering critically needed financial assistance to those who are otherwise mortgage ready.   

Learn more about SPCPs through these resources: 

Where can you learn more about Special Purpose Credit Programs?

Using Special Purpose Credit Programs to Serve Unmet Credit Needs

How People-Based Special Purpose Credit Programs Can Reduce the Racial Homeownership Gap

“The persistent racial gap needs to be addressed and we should work to speed up efforts to put sustainable homebuying within reach for more Americans.”

– Lindsay Johnson