Homebuyers who utilized down payment assistance (DPA) from CBC Mortgage Agency [1] (CBCMA) realized an average increase of nearly $27,000 in their home's value, according to an internal analysis conducted by CBCMA, a nationally chartered housing finance agency and a leading down payment assistance source for first-time homebuyers.
According to a report [2] from the Federal Reserve Board, while the net worth for the average U.S. renter was just $5,200 as of 2016, that number jumped to $231,400 for the average homeowner. But saving enough for the down payment necessary to make the transition from tenant to owner can be next to impossible for many American families, some of whom are saddled with student debt.
However, on transactions where CBCMA provided down payment assistance, the average home value gain was $26,942. The company determined the equity growth by analyzing publicly available automated property valuation data for 17,500 of its transactions. The analysis also found that 96% of CBCMA customers have seen price appreciation.
In aggregate, CBCMA's customers have realized $469 million in increased wealth since purchasing their homes as a result of utilizing one of its down payment assistance programs.
"Our programs have enabled thousands of families, who otherwise would have been unable to save for a down payment, to achieve the American Dream," CBC Mortgage Agency President Richard Ferguson stated. "It is especially gratifying to know that many of our customers are black, a group who often lacks intergenerational wealth and whose median net worth is barely a 10th of their white counterparts."
CBCMA plans to be proactive in opposing any efforts by the Department of Housing and Urban Development to restrict the use of down payment assistance on FHA-insured transactions. CBCMA, which successfully sued HUD and forced it to rescind Mortgagee Letter 19-06 restricting down payment assistance, plans to provide public comments for any related rulemaking efforts by the Department of Housing and Urban Development.