Expanding Access to Homeownership in Tennessee

HOPE recently joined national and regional housing leaders at the Tennessee Housing Conference hosted by the Tennessee Housing Development Agency. The gathering brought together leaders from the public and private sectors to examine the barriers to housing access and identify solutions to expand opportunity in Tennessee.

HOPE participated in a plenary session titled “Rural Housing Opportunities and Challenges”. The panel underscored a central reality that while Tennessee continues to experience economic growth, access to affordable housing remains out of reach for many families, particularly in rural communities and communities of color.  The following highlights key take-aways from that discussion of challenges to affordable homeownership and how HOPE is filling the gap in Tennessee and the South.

Challenges to Housing

Across Tennessee, families are navigating a housing market where affordability and access are increasingly misaligned.¹  Rural communities in Tennessee have fewer mortgage lenders overall and among available mortgage lenders, there is a greater concentration of non-depository institutions, which may offer higher-cost mortgage loans than traditional financial institutions.² Relatedly, households of color in rural areas have  higher  rates of mortgage application denials than their non-rural counterparts, regardless of  credit score.³

Similar challenges exist for urban areas as well. For example, from 2022 to 2024, 30% of mortgage loans went to Black or Hispanic borrowers in the Memphis MSA where 56% of the population is Black or Hispanic.⁴ 

What Works: Meeting Communities Where They Are

By designing financial products that reflect real-life needs, Community Development Financial Institutions (CDFIs), like HOPE, expand access to capital in ways that mainstream financial systems often do not. HOPE’s approach centers on engaging directly with communities to understand their priorities and connect those priorities to the capital and resources needed to move forward.

HOPE’s Affordable Homeownership Program (AHP) is one example. This mortgage product offers:

• 100% loan-to-value mortgages
• Flexible underwriting that considers rental history and income stability
• No private mortgage insurance

HOPE is creating pathways to homeownership for families who would otherwise be excluded. In Tennessee, HOPE has provided $62.6 million mortgage loans with 89% of loans made to first-time home buyers, and 90% were to minority borrowers.

No single entity can solve the housing challenge alone. Expanding access to homeownership requires coordination across sectors, including policymakers, financial institutions, philanthropy, and community organizations. To that end, such collaboration should serve to increase access to affordability assistance, support for a secondary market, and more resources directed towards CDFIs.

Increase Affordability Assistance

Affordability assistance, such as down payment assistance, is one of the most effective tools for expanding access to homeownership. For many families, monthly mortgage payments are manageable, but saving for a down payment or closing costs is a significant barrier. Mortgage costs, including down payment and closing costs, have risen drastically. For example, in Nashville, the average closing costs have nearly tripled since 2018 from $4,796 to $11,141, making homeownership further out of reach for more people, particularly lower-income households.⁵

Providing capital for down payment assistance programs is a key opportunity for philanthropy and banks to increase access to homeownership directly or through partnership. HOPE has a long history of successfully deploying affordability assistance across the region, and scales this work through partnerships.⁶

Expanding access to down payment assistance, such as through increased funding, could increase the program’s impact.

Strengthen the Secondary Mortgage Market

Liquidity is critical for CDFIs’ ability to sustain and scale their mortgage lending, particularly for mortgage products that are directed towards rural households. However, access to the secondary mortgage market remains uneven in rural Tennessee. In 2024, only about 30% of eligible rural home loans in Tennessee were sold to government-sponsored enterprises, compared to significantly higher rates in rural areas of other states such as Minnesota (55%) and New Hampshire (54%).⁷ This disparity limits the ability of lenders to recycle capital and expand lending. With increased access to the secondary mortgage market for small dollar, rural mortgages, more rural households could access homeownership.

Sustain and Expand Support for CDFIs

CDFIs are essential infrastructure for catalyzing private capital in underserved markets. CDFIs’ capabilities enhance the impact of public funding, bank investments, and philanthropic support to reach people and communities they would not otherwise be able to reach.  This includes increasing access to homeownership and other types of affordable housing as HOPE and other CDFIs are doing across rural communities.

Expanding capital resources to CDFIs like HOPE with a strong track record of lending to rural communities is a key part of the strategy to increase access to opportunity through homeownership and building vibrant, healthy communities in Tennessee.

Building Toward Long-Term Opportunity

Conversations at the Tennessee Housing Conference reinforced that housing is foundational to economic opportunity. Access to homeownership enables families to build wealth, stabilize their finances, and invest in their futures.

In addition to homeownership, HOPE also provides financing to support affordable rental housing and community facilities across our footprint, through leveraging federal financing tools such as the Low -Income Housing Tax Credit (LIHTC), the New Markets Tax Credit (NMTC), and conventional debt financing. For example, HOPE deployed $14 million through the NMTC program to Memphis Union Mission to provide emergency shelter and services to homeless men in Memphis.

These efforts require sustained partnership and a shared commitment. By working alongside communities and partners, HOPE helps build durable, trusted relationships that support long-term economic mobility. HOPE extends its appreciation to the Tennessee Housing Development Agency for convening leaders dedicated to expanding housing opportunities across rural communities.

Footnotes

1. Hoss, J., & Spears, M. (2025, March 19). Tennessee’s housing challenges: Where and why it got so expensive. The Sycamore Institute. https://sycamoretn.org/tn-housing-challenges/ ↩︎
2. Consumer Financial Protection Bureau. June 2023 Banking and Credit Access. Available at: https://files.consumerfinance.gov/f/documents/cfpb_ocp-data-spotlight_banking-and-credit-access_2023-06.pdf
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3. Id. ↩︎
4. Hope Policy Institute analysis of data from the FFIEC CFPB Home Mortgage Disclosure Act data available at https://ffiec.cfpb.gov/data-browser/data/2024?category=msamds and US Census American Communities Survey 2024 1-year Table DP05 available at https://data.census.gov/table/ACSDP1Y2024.DP05?q=population&g=310XX00US ↩︎
5. Richardson, J., Dean, J., & Wilson, G. (2025, August). Nashville’s unified housing strategy: Addressing housing accessibility in America’s most gentrified city. National Community Reinvestment Coalition. https://ncrc.org/nashvilles-unified-housing-strategy-addressing-housing-accessibility-in-americas-most-gentrified-city/ ↩︎
6. Through the Wells Fargo NeighborhoodLIFT program HOPE collaborates with Wells Fargo and NeighborWorks America to provide sustainable homeownership solutions in target areas.  HOPE managed NeighborhoodLIFT programs in New Orleans and in Mississippi, providing more than 500 borrowers with $7,500-15,000 in down payment assistance and homebuyer education.  HOPE coordinated a network of mortgage lenders, including Wells Fargo, Bancorp South, Bank Plus, Community Bank, Hope Credit Union, Renaissance Community Loan Fund, Regions Bank and Trustmark Bank. ↩︎
7. Miller, S., & Standaert, D. (2026). Closing the gap: Opportunities to increase secondary mortgage access for rural Deep South communities. HOPE Policy Institute. http://hopepolicy.org/blog/closing-the-gap-opportunities-to-increase-secondary-mortgage-access-for-rural-deep-south-communities/ ↩︎