Housing is the largest regular expense for most American families. And although prices vary significantly across the nation, living in a lower-cost area does not always ease the path to homeownership. Many families in less expensive regions struggle to buy a home because small mortgages are hard to obtain.

High fixed costs and a system that ties lenders’ compensation to loan size have made smaller mortgages—those under $150,000, for example—less profitable than larger ones for banks, credit unions, and other traditional mortgage lenders. As a result, millions of families have turned to alternative financing products to purchase homes, but these options often cost more and offer fewer protections than mortgages.

Pew studies the alternative financial arrangements that people use to buy lower-cost homes and examines the barriers that lenders face to offering small mortgages—with the goal of informing policymakers and other stakeholders about market practices, evaluating borrower protections and experiences, and promoting access to safe, affordable home loans.

Home Financing
Home Financing
Article

Risky Home Financing Options Leave Millions Vulnerable

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Most American homeowners finance their homes using traditional amortized mortgages. However, millions have also used nonmortgage alternative financing arrangements, especially in places with lower-cost homes—those valued below $150,000—where access to traditional mortgages tends to be limited.

Home Finance
Home Finance
Article

Small Mortgages Are Hard to Get

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In many communities across the U.S., small mortgages—those for less than $150,000—are largely unavailable despite an abundance of homes—and buyers—in that price range. Data suggests that the shortage of small mortgages drives some creditworthy borrowers to riskier, higher-cost alternative financing options.

Home Finance
Home Finance
Article

Protections for Owners of Manufactured Homes Are Uncertain

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Manufactured homes, commonly known as mobile homes, are the largest source of unsubsidized affordable housing in the United States. Twenty-two million people live in these units, and in some counties, largely in the South and West, manufactured homes make up more than a third of the housing stock.

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