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LOCAL SPOTLIGHT: HOPE
HOPE is a Black- and women owned Community Development Financial Institution (CDFI) credit union, loan fund, and policy and advocacy organization. Since 1994, HOPE has worked to increase access to financial services, expand community infrastructure, and advocate for vulnerable populations in economically distressed areas throughout the Deep South. HOPE currently serves five states — Alabama, Arkansas, Louisiana, Mississippi and Tennessee — a region that is home to over a third of the nation’s persistent poverty counties. Of HOPE’s 38,000 member owners, 69% have household incomes below $45,000, eight out of 10 members are people of color, and nearly half did not have a bank account upon joining the institution.
Expanding Black Homeownership
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Over the last 22 years, HOPE has closed over 3,000 mortgages to homebuyers across its fivestate region. Importantly, HOPE’s mortgage program has achieved a high level of impact. In 2022, 9 out of 10 mortgage borrowers were people of color; 2 out of 3 were women and 8 out of 10 were first time-homebuyers (Figure 1a). Additionally, HOPE extended homeownership opportunities to mortgage borrowers with credit scores that were well below national levels (Figure 1b) with a charge off rate of less than 0.20%.
To achieve this level of impact, HOPE offers an in-house mortgage product, the Affordable Housing Program (AHP), designed to address systemic obstacles for potential homebuyers lacking a down payment. Through the AHP, mortgages are manually underwritten, and nontraditional sources of credit are considered in the underwriting process. The product also discounts deferred student debt, does not require mortgage insurance, and considers credit scores as low as 580. The AHP allows for a loan-to-value (LTV) of 100% - eliminating the need for a down payment. HOPE often pairs the AHP product with various down payment assistance programs to reduce barriers to homeownership. Down payment assistance programs are funded through philanthropy, bank partners and various units of government.
