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Property is Power! Small Dollar Mortgages and the Path to Affordable Housing

Dr. Anthony O. Kellum

In our ongoing quest to address the disheartening homeownership rate of 44 percent, it becomes imperative to explore innovative solutions that can propel more individuals into home ownership. One promising avenue that deserves attention is the facilitation of small cap mortgages. However, to make a significant impact, it is crucial to incentivize banks, mortgage companies, and financial institutions to engage in this form of lending, while ensuring that loan officers are equally motivated. Property is not just a tangible asset; it is a symbol of power, economic stability, and wealth-building. As we navigate the complex landscape of homeownership, particularly for African Americans, the significance of mortgage loans cannot be overstated. Black homeowner buyers have found themselves either priced out of the housing market or compelled to seek homeownership elsewhere.

Bridging the Housing Gap

In the pursuit of more affordable housing the key to achieving this lies in increasing homeownership through mortgage lending at a diversity of price points. A recent report has identified small-dollar mortgages, ranging from $20,000 to $100,000, as a potential solution to provide relief to aspiring Black homeowners.

Challenges in the Current System

The need for small dollar mortgages is underscored by the fact that most financial institutions are reluctant to engage in loans for amounts less than $100,000. This reluctance creates a systemic barrier. The Urban Institute revealed that the availability of small mortgage loan financing is limited, posing a significant hindrance to affordable homeownership.

Limited Access to Affordable Housing

Affordable housing supply remains a major issue, and the lack of financing options for low-cost properties exacerbates the problem. By facilitating the purchase and improvement of these properties through small-dollar mortgages, access to the nation’s limited supply of affordable housing can be improved. Urban Institute’s previous findings indicate that fewer lenders are willing to provide small mortgages, and applicants are more likely to face denials for smaller loan amounts compared to larger ones. This is something that I have experienced many times.

Incentivizing Lenders:

To encourage financial institutions to delve into small cap mortgages, policymakers and regulatory bodies should consider offering targeted incentives. These incentives could take various forms, such as tax breaks, reduced regulatory burdens, or financial support for institutions engaging in a higher volume of small cap lending. By creating a favorable environment for lenders, we can foster increased participation in this critical sector.

Loan Officer Motivation:

Recognizing the crucial role loan officers play in the mortgage approval process, it is essential to ensure that they are motivated to actively promote small cap mortgages. Financial institutions can implement performance-based incentives, training programs, and career development opportunities specifically tailored to small cap lending. By aligning the goals of loan officers with the broader objective of increasing homeownership, we create a more sustainable and impactful lending ecosystem.

 Collaborative Initiatives:

Government entities, along with industry stakeholders, should collaborate to establish initiatives that promote small cap mortgages. One possible avenue is the creation of funds or grants dedicated to supporting lenders who actively contribute to increasing homeownership through small cap loans. These collaborative efforts can serve as a catalyst for financial institutions to view small cap mortgages not just as a social responsibility but as a viable business opportunity.

Community Engagement:

Engaging local communities is pivotal in expanding access to small cap mortgages. Establishing partnerships between lenders and community organizations can create awareness, provide educational resources, and offer counseling services for potential homeowners. By fostering a sense of community ownership and responsibility, we can encourage financial institutions to prioritize small cap lending as a means of contributing to the prosperity of the communities they serve.

In Summary

The role of small cap mortgages is pivotal. Breaking down the barriers that limit access to affordable housing and empowering individuals with the means to purchase homes at various price points is crucial for building stable neighborhoods and fostering wealth in communities. In addressing the challenge of a 44% homeownership rate, the promotion of small cap mortgages emerges as a viable solution. By incentivizing banks, mortgage companies, and financial institutions, and ensuring loan officers are motivated… we can pave the way for a brighter future where more individuals can realize the dream of owning a home. Through collaborative efforts, community engagement, and targeted initiatives, we can collectively work towards a higher homeownership rate in the black community this not only strengthens the housing market but also enhances the overall well-being of our neighborhoods.


Dr. Anthony O. Kellum – CEO of Kellum Mortgage, LLC                                                                                       Advocate for Access to credit, Speaker, Author                                                                                                      NMLS # 1267030 NMLS #1567030                                                                                                                                       O: 313-263-6388 W:

Property is Power! is a movement to promote home and community ownership. Studies indicate,

homeownership leads to higher graduation rates, family wealth, and community involvement.


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