More than 80,000 Hispanic, Pacific Rim, Kurd, Egyptian, Somali, and Sudanese, immigrants live in Nashville and middle Tennessee as New Americans. Many dream of purchasing a home but can’t apply for a traditional mortgage because of ethical norms. The Housing Fund (THF), a CDFI with locations in Nashville and Clarksville, Tennessee, is establishing a unique home loan solution to provide them with the opportunity of home ownership.
“The Housing Fund has been around for 20 years,” explained Angela Belcher, Program Coordinator at THF. “Every time we look at a new service or product it’s because we face a barrier to fulfilling our mission, which is to provide resources and creative leadership to help individuals and communities create and maintain affordable and healthy places in which low and moderate income people live.”
THF recognized a gap in the mortgage marketplace for products that adhere to certain cultural beliefs about lending. The CDFI began working closely with local community representatives and bankers to implement an Alternative Payment Plan mortgage loan product in compliance with cultural norms and ethical financing.
“One of our board members is a city council person,” said Angela. “He came to us and said constituents in his district didn’t have access to mortgages that complied with their beliefs. We saw the need for a new product and came up with the Alternative Payment Plan.”
The mortgage offers the same terms of more traditional THF mortgages but adapts language and documentation to comply with cultural norms. Said Angela, “The loan will be open to everyone who fits the income or credit criteria. The only difference is that the loan eliminates language that is a barrier for some communities.”
In 2016, THF won a $100,000 Wells Fargo NEXT Seed Capital Award to implement its strategy to launch this innovative consumer finance product in Tennessee.
“As a CDFI, we play an important role in generating economic growth by investing in opportunities that transform lives and places for disinvested people. We make our economy stronger, one opportunity at a time, and with this expansion provided by the NEXT Award, THF will have the potential to finance more than $4.9M in loans and serve a minimum of 300 households,” said Joan Davis, Interim CEO of THF.
The Alternative Payment Plan is targeted to launch publically in spring 2017. Once the mortgage is on the market, THF will promote it through community and civic leaders, who, said Angela, “are really ready and eager for it.”
Since 1996, THF has loaned more than $83 million dollars for more than 5,500 housing units. This has leveraged more than $700 million in private financing. THF offers down payment assistance loans for low-to-moderate income homebuyers, provides short-term financing for the construction and/or rehabilitation of affordable housing, loans to create and preserve affordable artist live and work space, as well as a variety of other loan programs.