Preserving Affordable, Equitable Housing for All

About This Investment 

Living in a safe, stable, and affordable home helps everyone reach their best possible health and wellbeing, and owning a home often leads to positive health outcomes. This is true for all communities—large and small, rural and urban. However, not everyone enjoys the health benefits of homeownership equally. Across the country, many families struggle to become homeowners or risk losing their homes because they can’t pay their mortgages.

Hogar Hispano, Inc. (HHI), a nonprofit housing organization, has launched a new fund (HHI Fund), with investments from the Robert Wood Johnson Foundation (RWJF) and other investors, to purchase and restructure mortgages that are under threat of foreclosure or sell vacant properties to new homebuyers at affordable prices.

Why It Was Needed

Foreclosures disproportionately affect families with low to moderate incomes (LMI), particularly in communities of color, due to structural factors such as greater income volatility, unequal lending practices, and lower home equity. Foreclosures not only strip wealth from affected families and decrease the value of nearby homes, they also affect the lives of residents and their wellbeing: evidence suggests that foreclosures impact health. 

An additional factor limiting access to homeownership is that corporate investors are increasingly crowding out first-time home buyers. Currently, corporate buyers dominate the market of buying pools of “distressed assets” (i.e., homes under pre-foreclosure, foreclosure, or controlled by banks) from Freddie Mac, Fannie Mae, and the U.S. Department of Housing and Urban Development (HUD), and have limited motivation to preserve the ownership of the existing residents. A 2022 report indicated that 115,000 Fannie Mae and Freddie Mac distressed mortgage sales resulted in more than 60% of those homeowners losing their homes. This is reflective of a broader trend where corporate investors are increasingly purchasing homes in LMI areas. Less than 1% of government-owned homes have been sold to nonprofits focused on affordable housing. Without nimble and long-term funding, mission-oriented buyers struggle to buy those properties to benefit families with low incomes.

How It Works

This investment will allow HHI Fund to buy pools of mortgages at risk of foreclosure to preserve existing homeownership and create affordable homeownership opportunities for families. For homeowners who are behind on mortgage payments, HHI Fund will work to help them keep their homes by revising their financing terms to ease payments, helping them to keep their homes. With vacated properties, HHI Fund will make any needed repairs before affordably selling or transferring those to first-time buyers or nonprofit organizations.

About the Borrower

Hogar Hispano, Inc. is a nonprofit housing organization that helps families avoid foreclosure and creates new housing opportunities. As a Latinx-led organization, HHI was launched in 2004 by UnidosUS (formerly National Council of La Raza) to create affordable homeownership opportunities across the U.S. and Puerto Rico with an explicit focus on communities with low incomes and communities of color. Since 2011, Hogar Hispano has purchased more than $400 million in single-family homes from HUD, Freddie Mac, and Fannie Mae, helping to create or preserve homeownership of more than 3,000 families nationally.   

In the Spotlight:

True to its commitment to serve communities with low incomes and communities of color, HHI has created a fund to complete the purchase of 23 defaulted loans with one of its nonprofit partners. This is one of many joint efforts between Black and Latino organizations serving mutual constituents, communities of color with low to moderate incomes.