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NPR: Millions of Americans are resorting to risky ways to buy an affordable home

NPR, April 14, 2022, Millions of Americans are resorting to risky ways to buy an affordable home

Land contracts and other kinds of alternative financing have been around a long time, with roots in the race-based redlining that blocked Black Americans from traditional mortgages. But legal aid experts say they became more common after the Great Recession, and as housing and rental costs have skyrocketed. They may be the only option for some, but these alternative deals pose a financial risk to families with the least to lose.

A first of its kind national survey by The Pew Charitable Trusts finds 36 million Americans — about 20% of all borrowers — have used alternative ways to finance a home at some point, including 7 million currently in such arrangements. The borrowers are largely low-income, more likely to live in rural areas, and disproportionately Hispanic and Black, reflecting the racial gap in homeownership.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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