The New York Times highlighted a common barrier to homeownership in a recent article about affordable housing. Buying a home in a low-to-moderate income neighborhood can be difficult because many banks won’t approve low-dollar loans.
Louisville-based Republic Bank was mentioned as the largest major mortgage lender helping buyers in these communities become homeowners. Republic also recently announced a new initiative to start a $3 million Community Loan Fund to assist small businesses in economically challenged communities.
The article outlines how small-dollar mortgages, often $100,000 or less, are not big moneymakers for lenders and are often dismissed because of it. Finding a small-dollar lender can be a difficult hurdle for first time home buyers. The MicroMortgage Marketplace in Louisville recently launched a grant-funded program to help buyers, including those in historically redlined communities, get the loans they need.
According to the New York Times, only 18% of mortgages in Louisville last year were low-dollar loans.