MBA Announces Policy Initiative to Close Racial Homeownership Gap

The Mortgage Bankers Association on Monday announced a policy initiative, Building Generational Wealth Through Homeownership, aimed at providing industry leadership and direction for reducing the racial homeownership gap, developing and supporting policies that support sustainable homeownership for communities of color and promoting fair, equitable and responsible lending for minority borrowers.

Through advocacy, partnerships, and connections within the industry, the MBA initiative will increase homeownership opportunities for minority borrowers; expand homeownership readiness to future borrowers; and assist current homeowners with maintaining and maximizing the benefits of homeownership.

Susan Stewart

“Homeownership is often the largest source of intergenerational wealth for families,” said Susan Stewart, 2021 MBA Chair and CEO of SWBC Mortgage Corp. San Antonio, Texas. “MBA’s new policy initiative serves as a perfect foundation to level the playing field. The mortgage industry has a responsibility to promote minority homeownership by partnering with key stakeholders to remove barriers and support financial education and counseling, with a goal to close the racial homeownership gap and increase generational wealth among minority households.”

“MBA is uniquely positioned to harness its internal and external resources to help more minority families become homeowners,” said MBA President & CEO Bob Broeksmit, CMB. “Through industry advocacy and partnerships with housing experts, consumer groups, non-profits and civil rights organizations, our industry will focus on eliminating obstacles and shaping policy to promote and increase minority homeownership.”

The MBA initiative will complement marketplace efforts of its signature Affordable Housing Initiative, CONVERGENCE, which was developed by MBA’s Minority Homeownership Joint Task Force, a collection of industry professionals drawn from MBA’s Residential Board of Governors (RESBOG) and the Affordable Homeownership Advisory Council.

The campaign focuses on reducing the cost of homeownership for African American and Hispanic first-time homeowners, regardless of income; preserving existing minority housing wealth; and advocating for pre- and post-purchase financial education and counseling. MBA will focus on strategies that mitigate the risks that drive increased pricing for minority borrowers of all income levels, rather than subsidizing that pricing; support efforts to grow and protect minority homeowners’ wealth gained through homeownership, such as fair home valuations, access to beneficial refinancing options and assistance during times of financial stress; and support financial education and counseling for homebuyers and homeowners.

MBA will also promote the benefits of homeownership, lending opportunities and availability of resources that reduce the barriers to homeownership and improve home retention opportunities when borrowers face financial stress; support educating minorities about various mortgage transactions (purchases, refinances, foreclosure protections, etc.) to encourage successful long-term homeownership; and will collaborate with nonprofit organizations to repair the trust gap between the industry and minority communities to help families take advantage of wealth-building opportunities.


To provide industry leadership and direction for reducing the racial homeownership gap and leverage membership strength in providing fair and equitable lending to minorities, MBA will:

–Advocate for increased access to affordable financing options to expand the pool of minority borrowers eligible for government-sponsored enterprises financing; support increasing area median income on affordable products (Home Ready and Home Possible) from 80 percent, particularly in high-cost areas; remove unnecessary loan-level pricing adjustments on Rate & Term Refinances that reduce monthly payments for consumers who have not accessed today’s historically low rates; and reverse credit score LLPAs on 3 percent down payment products for specific metropolitan areas.

–Lead advocacy for regulatory clarity and provide industry support of Special Purpose Credit Programs; support lenders creating SPCPs by removing regulatory barriers and uncertainty; and develop a lender playbook for scalable, replicable SPCPs.

–Support down payment options for African American and Hispanic borrowers that address the lack of generational wealth; lead and support legislative efforts that lower or remove down payment barriers for minorities through forgivable grants, savings incentives and other funding sources.

–Evaluate options for the GSEs, Ginnie Mae and Treasury to expand secondary market pools and programs that would benefit minority borrowers and communities; create incentives for investors to improve pricing and increase liquidity for minority-rich lending, based on repayment characteristics; Environmental, Social and Governance (ESG) investor goals; and other factors.

— Support home retention options for African American and Hispanic homeowners that assist them with maintaining homeownership and accumulating generational wealth; lead and support efforts to distribute the Homeowner Assistance Fund so that it helps socially disadvantaged populations maintain homeownership; and establish robust, uniform home retention options to assist families through natural disasters or economic fallout from pandemics.

–Support pathways to homeownership for African American and Hispanic borrowers who have been previously denied mortgage financing; evaluate scalable programs to assist African American and Hispanic applicants who have been denied a loan due to a lack of funds with down payment assistance options; support “best practices” for mortgage professionals and partners involved in the mortgage transaction to efficiently provide services to minority borrowers facing down payment or credit barriers.

Additionally, to promote policies that support sustainable homeownership and assist with leveraging the benefits of being a homeowner as a critical means of generating generational wealth for communities of color, MBA will:

— Lead and support legislative initiatives that fund counseling agencies and other organizations that provide pre- and post-home-buying services; support legislative efforts to increase funding for counseling services and improve client access; and partner with industry and housing organizations on housing counseling and financial education advocacy.

–Raise awareness with minority homeowners of resources available to improve affordability and maintain homeownership; partner with the GSEs, government agencies and nonprofits to provide authentic storytelling opportunities to address the trust and wealth gaps; provide content that can be leveraged across markets and lenders of all sizes; and partner with agencies and nonprofits to provide post-closing education for minorities (refinancing opportunities, resources if they are facing financial hardship, etc.). 

To learn more about the policy initiative, click here.