Why Home Ownership Matters in Solving the Affordable Housing Crisis

HOME OWNERSHIP

For many households, home ownership can be a pathway to long-term stability, economic mobility, and generational wealth. It allows households to stay in one place, build and leverage social capital, and invest in their neighborhoods and communities. Home ownership also shields some households from some of the uncertainty associated with renting such as rising rents. With more predictable housing costs, housing cost-burden often decreases over time, creating more disposable income for households which allows them to budget for other needs.

Home ownership is also one of the key ways that families are able to build generational wealth. Historically, systemic barriers have made home ownership inaccessible for Black, Latino, and Indigenous households. Over time this has resulted in significant racial wealth gaps. Expanding access to home ownership is essential to close these gaps and enhance economic equity. Many households remain in rental housing because they do not have the credit, savings, or support needed to become homeowners. By creating more pathways to homeownership for low- to moderate-income households, we can not only help families achieve stability and build wealth, but also free up affordable rental units for others in the community.

PROMISING PRACTICES TO INCREASE HOMEOWNERSHIP

There are several promising practices and policies that can increase access to homeownership for low to moderate income households. These include:

Down payment assistance and low-interest mortgage programs: Down payment assistance programs provide grants or forgivable loans that cover all or most of the upfront costs of buying a home. Low-interest mortgage programs offer home loans that have interest rates that are lower than typical market rates, making monthly payments more affordable and lowering overall housing costs.

Credit access reforms that reflect rental and utility payment histories: Changes in practices that determine who can get housing financing, such as considering rental and utility payment history, have the potential to increase the availability of housing financing to households that would otherwise be excluded.

Targeted supports for first-generation and BIPOC homebuyers: Historically marginalized groups and first-generation home buyers face additional challenges to home ownership such as systemic barriers or lack of familial support to help guide them through the home buying process. In addition to down payment or closing cost assistance and low-interest mortgage programs, targeted supports such as home buyer education and counseling and personalized home buying navigation can also increase access and improve equity in home ownership.

ENHANCING HOME OWNERSHIP IN MECKLENBURG COUNTY

In Mecklenburg County, over half of low to moderate income households spend more than 30% of their income on rental costs. Homeownership can decrease housing instability among this group and create long-term stability. By supporting renters in becoming homeowners, we not only strengthen individual households, but we also strengthen the broader housing continuum.

There are several key initiatives that facilitate homeownership in Charlotte-Mecklenburg.

Housing Counseling:  Offers homeownership education and counseling on financial empowerment and being a first-time home buyer.

House Charlotte: Provides up to $80,000 in deferred or forgivable loan options to assist first-time home buyers who earn up to 110% of Area Median Income (AMI). These funds may be used for down payment assistance, closing costs, and interest rate buy-downs.

Habitat Charlotte Region Homebuyer Program: Homeownership program for households making up to 80% AMI. Participants complete a financial education program that culminates in an invitation to qualified applicants to submit a mortgage application. Households accepted into the program commit to completing additional education, engaging in community engagement, and supporting the construction of their home.

Destination Homeownership: An INLIVIAN initiative focused on transitioning low to moderate income households living in INLIVIAN properties or receiving Housing Choice Vouchers to transition from renter to home ownership. This program provides financial literacy education and support and assistance in navigating the path to homeownership.