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?
Homes by CFE is honored to be featured in the SPCP Toolkit produced by the National Fair Housing Alliance and the Mortgage Bankers of America in partnership with the Homeownership Council of America. Homes by CFE is one of the few non-profit CDFI Funds utilizing the SPCP regulation to expand credit opportunities for underserved communities in the Nation’s Capital.