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Twenty percent of owner-occupied homes in the U.S. are valued below $100,000. These relatively low-cost homes often provide lower-income and first-time homebuyers a critical first rung of America’s wealth-being ladder. And yet, these homes are increasingly inaccessible for these buyers, as traditional mortgage financing on these “small dollar” homes has become harder and harder to access. As a result, many that are in a position to benefit from owning a home are locked out of the market altogether.

On December 5, 2022, the Future of Land and Housing Program at �鶹������ý and the Center for the Study of Economic Mobility (CSEM) at Winston-Salem State University submitted a to the Federal Housing Administration (FHA)’s on ways to facilitate access to small dollar mortgages through single family mortgage insurance programs.

Our joint response was informed by a report exploring the accessibility of small dollar mortgages over the past two decades, nationwide and specifically in a a local housing market—Winston-Salem, North Carolina. Our response focuses on three interrelated challenges in accessing small dollar homes for low-and-moderate income families:

1. The decreasing availability of small dollar mortgage loans for LMI buyers;
2. The catch-22 of mortgage standards–or the relatively strict criteria for loan products designed to meet the needs of lower-income buyers; and
3. The competition with all-cash buyers.