Mortgage Finance, Affordable Homeownership, Regulation & Reform
Policy Brief | October 2014

Serving Mortgage Market Segments Effectively

Kevin A. Park
Research funded by Ford Foundation

Lowering the cost of capital required by government-sponsored enterprises can safely and efficiently serve higher-risk segments of the market, increasing opportunity for homeownership and improving market stability.

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Government-sponsored housing finance agencies can serve a purpose and public benefit distinct from yet complementary to the pure private market by serving creditworthy borrowers considered too risky for the private market to serve profitably.

Doing so will require allowing these agencies to price their mortgages in such a way that risk is covered but mortgages remain affordable. This can be accomplished by allowing the agencies to employ a model that lowers their return on capital and spreads risk across their portfolio.

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The UNC Center for Community Capital conducts research and policy analysis on ways to make financial services work better for more people and communities.


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