Today, the Mortgage Bankers Association (MBA) and National Fair Housing Alliance (NFHA) announced a new online toolkit for mortgage lenders interested in developing Special Purpose Credit Programs (SPCPs). SPCPs permit lenders to offer mortgage credit to economically and socially disadvantaged borrowers and are an important tool for ensuring financial institutions can meet the needs of their consumers.

“MBA is committed to bringing the mortgage industry together to develop effective policy and resources to help to close the racial homeownership gap. We have been at the forefront of encouraging regulators, the GSEs, lenders, and other industry stakeholders to enable the creation of SPCPs to increase mortgage credit availability to underserved communities,” said MBA President and CEO, Bob Broeksmit, CMB. “The online toolkit is designed to provide useful guidance and data analysis for mortgage lenders that are interested in using SPCPs to serve economically disadvantaged communities as well as minority borrowers, most of whom lack generational wealth to fund a down payment.”

The online toolkit, which was developed with technical assistance from the Homeownership Council of America (HCA) and input from the Urban Institute, provides background information, best practices and guidance, industry examples, data, and other useful links to aid mortgage lenders in their work in developing SPCPs.

“NFHA has championed Special Purpose Credit Programs as an excellent tool for expanding credit access for underserved markets, including consumers who live in credit deserts and are credit invisible,” said NFHA President and CEO Lisa Rice. “Our collaboration in developing the SPCP toolkit demonstrates that NFHA and the MBA share a commitment to promoting justice, fairness, inclusion, and equity. We also share a commitment to strengthening communities, increasing sustainable homeownership, and growing our economy. We urge all lenders to use this toolkit to develop impactful programs to better serve borrowers of color, women, people with disabilities, and other underserved groups.” 

SPCPs are critical for strengthening and revitalizing communities and helping lenders support consumers trying to reach important financial goals. While SPCPs have been available under the Equal Credit Opportunity Act (ECOA) since 1974, the toolkit is designed to expand their usage by lenders, helping to improve minority households’ ability to achieve homeownership.

“HCA is thrilled to provide our technical expertise in designing products and programs that reach underserved communities for this project, and for our lender partners actively engaged in building SPCPs to bring to market,” said Homeownership Council of America President and CEO Gabe Del Rio. “Working together, we build and enhance credit delivery systems that make homeownership attainable for economically disadvantaged populations.”

Both NFHA and the MBA have launched efforts to help make the mortgage market more productive, expand the universe of affordable housing units, and close the racial homeownership gap—which is larger today than it was when the Fair Housing Act was passed. NFHA’s Keys Unlock Dreams Initiative and the MBA’s CONVERGENCE program are designed to help achieve the goal of reaching the 16+ million mortgage-ready borrowers of color who are currently underserved by today’s constrained mortgage market. Both groups have elevated SPCPs as an important component to reaching this goal.

To learn more about the SPCP toolkit, click here.