Financing Low-Cost Homes Should Be Easier
Pew research examines the difficulty of originating small mortgages, borrowers’ use of alternative financing, and new opportunities for lenders

Most homebuyers in the United States use mortgages to purchase their homes. But outdated policies have made small mortgages—loans for homes priced below $150,000—increasingly expensive for lenders and thus unavailable to millions of qualified and creditworthy borrowers. With limited access to small mortgages, many families seeking to buy low-cost homes turn to alternative financing arrangements, such as lease-purchase agreements and land contracts, that leave them vulnerable to eviction and financial losses. A 2021 survey by The Pew Charitable Trusts estimated that 36 million Americans had used alternative financing to pursue homeownership at least once in their lives.
Pew conducts research that examines the alternative financial arrangements Americans use to buy low-cost homes and the barriers that make it difficult for lenders to offer small mortgages. The goal is to inform policymakers and other stakeholders about market practices, evaluate borrowers’ experiences, and help modernize regulations to improve transparency and outcomes for alternative financing while encouraging better access to mortgages for low-cost homes.