Underwriting For Good: Call for Vendors
UPDATE 3/23/2021: We are currently assessing the responses from our call from vendors and will be releasing a Request for Proposals (RFP) in April 2021. Please check back here to see updates.
For decades, the system of American mortgage lending has produced racially unequal outcomes and left communities of color out of the full benefits of homeownership, resulting in today’s worsening racial wealth gap. Meanwhile, mission-driven lenders, fair housing and consumer advocates, community development financial institutions (CDFIs), and innovative government actors have created promising alternative approaches to mortgage lending that better serve the credit needs of people of color and especially low- to moderate-income homeowners of color. These alternatives have the potential to help close the racial wealth gap, but they currently do not operate at scale.
That’s why the Center for New York City Neighborhoods, Inc. (the Center), a New York-based non-profit, is building Underwriting for Good (UFG), an underwriting platform that will build on the best practices of these promising alternative lending approaches and bring them to scale.
Made possible with generous grant support from the Housing Affordability Breakthrough Challenge created by Enterprise Community Partners and Wells Fargo, UFG will expand access to the dream of homeownership on fair terms for thousands of households that have thus far been excluded from the primary vehicle for American wealth building.
UFG will automate existing manual alternative credit underwriting processes; leverage financial and non-financial data to better understand a borrower’s true ability to repay; and support homeowners with ongoing housing and financial counseling through monitoring and early intervention. It also aims to overcome the challenge of serving underbanked households that may not be served by traditional credit report systems. By replacing manual underwriting with automated data systems, we will also reduce the cost of credit for marginalized communities by lowering barriers to access. UFG will integrate with existing loan origination systems (LOS) and loan counseling software to deliver approvals to investors.
Though at inception this system will target homeowners in New York State, we believe UFG will have national impact by providing other organizations who share our goals with a blueprint to expand equitable homeownership lending.