Equitable Housing Finance

In an attempt to promote equity and increase sustainable homeownership and rental opportunities for traditionally underserved Black and Latino communities across the nation, Freddie Mac introduced the Equitable Housing Finance Plan on June 8th. This plan was created upon the request of the Federal Housing Finance Agency. 

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The plan looks at the foundation of housing inequity, which we can trace back to the discriminatory practices of redlining, deed restrictions, and exclusionary zoning restrictions, to name a few, and how to reverse their impact. In order to overcome these historically problematic practices, the plan, which can be read in detail here, focuses on these key areas:

  • Addressing the homeownership gap: There are many reasons for the homeownership gap between minorities and non-minorities, which is discussed in the report. To lessen the gapthe Special Purpose Credit Program (SPCP), which allows lenders to offer special underwriting or pricing for traditionally disadvantaged groups, will be looked at. ·

  • Strengthening investment within formerly redlined areas – Redlining was a practice used by lenders to assess the risk of lending in a particular area. The areas that were redlined, or labeled as most risky, were predominately black. Even though the practice is now illegal, those communities still feel the effects of the lack of investment and services. Freddie Mac’s new plan will expand access to access to capital in formerly redlined communities as well as rental assistance. 

  • Financing affordable housing – The plan looks at using public and private investments to build new affordable single-family and multifamily housing units. It also prioritizes renovating older units that are seen in minority communities. 

  • More opportunities for renters –  Freddie Mac’s multifamily tenant credit-building plan will be expanded to include new tools to promote wealth-building activities. The goal is to reduce the gap in wealth building that affect renters. They will also increase educational opportunities regarding housing in order to increase the number of renters who are able to become homeowners. 

  • Eliminate inequalities amongst Black and Latino communities – The gap in generational wealth between minorities versus non-minorities has prolonged the homeownership gap. Freddie Mac’s plan has new ideas on how to improve access to funding, including a revamping of the FICO score and access to down payment assistance.

To learn more about Freddie Mac’s Equitable Housing Finance Plan and how it will impact your Colorado home search, contact Home Loans

If you are ready to begin your Colorado home search, we will take you from application to closing.  We will advocate on your behalf and work through every possible scenario to get you approved for a mortgage.