New report sees opportunity to expand programs, improve systems for affordable homeownership in Mass.

Report finds many state programs are helping to reduce racial homeownership gaps, but funding and scale questions remain

September 13, 2023

Boston – A new report from Boston Indicators, the research center at the Boston Foundation, finds that programs designed to provide affordable mortgage access and down payment assistance for Massachusetts homebuyers are making it possible for more Black and Latino families to entire the housing market. However, the analysis also highlights the need for greater investment to scale these efforts and have a greater impact.

The report, entitled A Long Road Home: A Racial Equity Analysis of Homeownership Support Programs in Massachusetts, tracks the historical racial gap in homeownership to today and provides a thorough landscape scan of affordable homeownership programs in Massachusetts, diving more deeply into four programs: Massachusetts Housing Partnership’s ONE Mortgage, MassHousing’s Workforce Advantage mortgage program, the Massachusetts Affordable Housing Alliance’s STASH program, and the state’s MassDREAMS down payment assistance program.

“Massachusetts has a number of programs that provide vital assistance to potential homeowners in need of down payment supports or mortgage access to address the legacy of decades of systemic inequity,” said Luc Schuster, Executive Director of Boston Indicators. “But for these programs and others to reach their full potential, we need to seize the opportunity to both expand their availability and simplify what can be an exceptionally challenging process for first-time homebuyers to find programs that meet their needs.”

The report finds that all four programs are being utilized by higher percentages of residents of color than the market overall, which can help address historical racial wealth and homeownership gaps. The research also shows the impact of improved marketing and outreach on applicant demographics for many of the programs.

Among the programs studied, the research team found that those programs that prove direct financial subsidies to homeowners, such as down payment assistance, had large impacts on homeowners, but mortgage assistance programs also had positive impacts, with lower delinquency rates than conventional mortgages – suggesting two possible paths forward.

“From a funding perspective, it’s encouraging to see that mortgage supports and down payment assistance can provide a menu of options for potential homeowners,” said Soni Gupta, Associate Vice President for Programs at the Boston Foundation. “Coupled with important efforts to expand the supply of affordable housing, these are critical elements of a broad strategy to improve affordability for owners and renters.”

The report closes with a long series of potential policy opportunities, including the expansion of opportunities specifically targeting potential homeowners of color, increased funding for programs targeting first-time homebuyers, an expansion of affordable mortgage programs, better information for prospective homebuyers and lenders about available programs, and other supports – as well as subsidies and other supports to expand available housing supply.

“We know two things quite well – our current homeownership gap is the direct result of decades of intentional, systemic racial discrimination, and that homeownership is a powerful element for building intergenerational wealth for all races,” said M. Lee Pelton, President and CEO of the Boston Foundation. “It took decades of action to create the homeownership gap – we must use every tool available to expeditiously repair the harms and build a more equitable field for prospective homeowners.”

Alongside the report, Boston Indicators released a new short video capturing the experiences of a number of prospective homebuyers as they tried to navigate the housing market, describing the frustrations and isolation they faced trying to both locate affordable homes and navigate the financial landscape to secure loans and make down payments. The video, linked here, is available on the Boston Indicators YouTube channel.