Faculty Scholarship
Document Type
Article
Publication Date
Winter 12-2024
Abstract
This paper investigates the impact of small dollar mortgage lending on housing affordability and homeownership in the United States. Using data on small dollar mortgage lending at the state level from the USDA Section 502 Lending Program and data on housing affordability and homeownership at the household level from the American Community Survey, I show that an increase in the number of small dollar mortgage loans per-capita at the state level is positively associated with homeownership and housing affordability, particularly for low income households and non-white households. For Black, non-Hispanic households, doubling the number of USDA Section 502 loans per 10,000 persons at the state level increases the probability of homeownership between 1 and 8.7 percentage points and decreases the share of housing costs in monthly income between 1.1 and 3 percentage points. Effect sizes of a similar magnitude are found for Hispanic households and households with less than the median income.
Recommended Citation
Petach, Luke, "Do Small Dollar Loans Increase Low Income and Minority Homeownership? Evidence from the USDA Section 502 Lending Program" (2024). Faculty Scholarship. 5.
https://repository.belmont.edu/economics_faculty/5
