Advancing its efforts to help more Americans access affordable housing, the CBC Mortgage Agency (CBCMA) has released a national down payment assistance (DPA) study that documents DPA's vital role as a bridge to sustainable homeownership.

The study, conducted nationwide over the summer of 2019, measured the impacts of DPA through the personal experiences of lenders and borrowers. Among other findings, the study revealed that more than nine out of ten homebuyers surveyed would not have been able to purchase a home without down payment help.

It also found that more than half of buyers surveyed are racial or ethnic minorities, and that more than one-third of all borrowers who received DPA are the first in their family to buy a home.

"We conducted this study to illuminate the importance of DPA to lenders and borrowers across the country, and the findings are compelling," said CBCMA President Richard Ferguson. "It's clear that without DPA, millions of Americans would be shut out of the homebuying market. With it, creditworthy buyers and their families can reap the many benefits of homeownership, which creates healthier communities and other positive outcomes for our nation."

The study queried 735 lenders and more than 1,100 borrowers, asking a series of questions about the importance of DPA, as well as their overall homebuying experience.

Respondents cited multiple factors when asked how the availability of DPA had affected their lives:

  • Nearly half of all buyers said that saving for a down payment had been the principal reason they had delayed a house purchase.
  • A significant portion of respondents said that for single parents, DPA is the only vehicle that makes homebuying possible.
  • More than nine out of ten borrowers who used DPA to obtain a loan said they considered their mortgage "affordable."
  • Lenders called DPA particularly helpful for buyers carrying student loan debt. They also said many of their clients had been paying more in rent than the cost of their new monthly mortgage.

Many buyers also reported that owning a home had provided them with a sense of accomplishment, well-being, and/or security. One survey respondent summarized such feelings this way: "As a child, I was never blessed with a stress-free environment, or even a guaranteed place to call home. Thanks to the Chenoa Fund, it puts my mind at ease knowing my disabled husband and my toddler will never have to think or wonder where home will be next month."

Homeownership rates fell precipitously over the last ten years, and the decline was steepest among minorities, millennials, and single-parent households. Because of recent lending restrictions, there is an increased need for DPA and other financing tools to help buyers who have good credit and a responsible debt burden, but have been unable to save enough for a down payment.

"Studies show that homeownership not only helps families build wealth and financial security, but also creates a sense of stability and control that enhances quality of life," Ferguson said. "Nearly nine out of ten renters say they hope to buy a home someday. With DPA, we can help more Americans make that dream a reality."

CBCMA's State of Down Payment Assistance 2019 Study surveyed lenders and borrowers who had used its Chenoa Fund program. The study can be viewed at: https://chenoafund.org/lender/2019-state-of-down-payment-assistance-report/