Yet not, no matter a good borrower’s factors, the utilization of solution financial support try factor in matter because is disproportionately utilized-which means that the dangers and you may prices are inequitably borne-of the racial and you will ethnic minorities, low-earnings house, and you will people who own manufactured homes. Among Us citizens that funded a home pick, 34% out-of Latina and you can 23% from Black houses used alternative capital one or more times, compared to only 19% away from White consumers. (See Profile cuatro.) Next, family making less than $50,000 was seven times more likely to use option money than simply those individuals making more $fifty,000. 24 In all of money loans in Cordova them circumstances, increasing entry to short mortgages may help beat typically underserved communities’ reliance on high-risk choice funding arrangements.
