Assembling a down payment is one of the greatest barriers to homeownership for Black New Yorkers. It takes the average New Yorker 18 years to save for a 20% down payment. According to the Urban Institute, in 2019 the median interest rate for Black homebuyers was 13 points higher than for White homebuyers, which translates to significantly higher overall costs for Black homebuyers.
Unsustainable and sometimes predatory mortgage practices in the early 2000s gave way to the foreclosure crisis and constrained mortgage access of the 2010s. In recent years, skyrocketing prices and high credit score requirements have made it difficult for Black families to buy a home and for Black homeowners to refinance and fund repairs. The result is a decrease in Black homeowners
The Down Payment Assistance Navigator will be a unified digital resource available to both potential homebuyers and pre-purchase counselors. This resource will improve access to existing products by leveraging and expanding relationships with lenders and other DPA administrators and supplying up-to-date information about their products.
A key benefit of having a single place to navigate these products is to allow homebuyers to more easily "stack" benefits when they are eligible for funding from multiple programs. This circumvents the shortcomings of DPA programs that may leave prospective buyers well short of an adequate, let alone attractive, down payment total for the New York City market. The Navigator will lay the groundwork to create systemic changes in the DPA field, shifting processes, timelines, and pain points so more people, specifically people of color, have access to homeownership and are better served. And by improving transparency and trust, the Navigator will allow lenders and other entities to cultivate positive relationships with their clients.
By identifying a variety of DPA options and opportunities for combining resources, this platform could expand homeowner access to down payment assistance. Streamlining access to the full gamut of DPA programs should improve borrowers' ability to access credit, and in turn, to purchase a home in New York's expensive markets.
Some DPA programs quickly run out of annual funding and stop accepting applications for the year with little warning. Updating the navigator with up-to-date information about funding availability will require open lines of communication with program administrators.
The initial vision of this pilot included housing a "common application" that could apply to multiple, if not all, DPA programs. However, additional research revealed that application processes currently vary so widely that this would be impractical. A more attainable goal would be to encourage DPA providers to move towards more uniform eligibility requirements.
Funding for Navigator updates and ongoing website maintenance is critical for its long-term success. Many DPA programs are not digitally accessible and keeping the Navigator up-to-date will require coordination with many agencies, organizations and companies that offer DPA.
