Homeownership is a critical wealth-building tool, but not everyone has an equitable opportunity to become a homeowner. Approximately one in five borrowers—about 36 million Americans—has used alternative financing instead of a traditional mortgage. These include land contracts, lease-purchase options, seller-financed mortgages, and personal property or chattel loans. Alternative financing arrangements typically cost more and carry fewer protections than mortgages, which are buoyed by tax incentives and strong public policy.
Although alternative financing can offer a pathway to homeownership for borrowers who cannot access a mortgage, some of these borrowers go on to experience higher costs, eviction, a loss of equity, and other unforeseen costs. The Urban Institute and The Pew Charitable Trusts will present their latest findings on pathways to homeownership, such as lease-purchase agreements, manufactured housing chattel financing, and small-dollar mortgages. Panelists will discuss how reforms can enable more low-and-middle-income households to pursue the American dream of homeownership and what attendant challenges and tensions these households face.