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White Paper Series

The Racial Wealth Gap at the Low End of the Mortgage Distribution: Evidence from SmallestDollar Mortgage Lending in Metro Detroit

March, 20233

Patrick Meehan

Does small-dollar lending help to close the racial wealth gap in Metro Detroit? Using data from the Home Mortgage Disclosure Act on the 2,236 smallest-dollar loans made in the Metro Detroit region from 2018 to 2021, we find that lending at the low end of the mortgage distribution perpetuates the racial wealth gap. Specifically, we find Black borrowers are more leveraged, have less purchasing power, and thus experience far less wealth-building potential through homeownership than White borrowers. Moreover, homeownership is more expensive in majority-Black neighborhoods in Metro Detroit than it is in majority-White neighborhoods, leaving borrowers little room to accumulate equity in their homes. Implications for homeownership as a mechanism to close the racial wealth gap are discussed.

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Working Together to Make Information Accessible: Principles of University-Community Engagement through the Detroit Housing Counseling and Homeownership Project

January 21, 2022

Patrick Meehan, Trina Shanks, David Palmer, Hector Hernandez, Alex Makohn, Lucine Jarrah, Elizabeth Harris

The Center for Equitable Family and Community Well-Being is committed to community-engaged research. In this paper, we explain what that means in practice through our work on the Detroit Housing Counseling and Homeownership Project. Together with community partners, our project team made important information about the state of mortgage financing and homeownership accessible to stakeholders and residents. The project was successful, in particular, for observing four key principles of community-engaged research: (1) equity in the design and distribution of power in the partnership; (2) leverage partners’ strengths; (3) transparency and regular communication; and (4) focus on sustainability and accessibility.

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MI-SEED Investment Funds and Account Growth: Implications for Achieving Higher Rates of Return

February 16, 2021

Patrick Meehan and Trina Shanks

In 2004, the Michigan Saving for Education, Entrepreneurship and Down Payment initiative (MI-SEED) recruited 430 families through 14 Head Start centers, enrolling 497 children in Child Development Accounts (CDAs). Designed to begin to address wealth disparities between low- and high-income families, the MI-SEED CDA used the state 529 college savings plan as the investment instrument. This brief presents results on MI-SEED savings and withdrawals through 2019. The results suggest that investment strategy greatly influences account growth, and the authors offer recommendations for ensuring acceptable growth in CDAs.

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COVID-19’s Impact on Ypsilanti’s Residents of Color

November 2, 2020

Patrick Meehan, Marquan Jackson, Alize Asberry Payne, and Trina Shanks

Through a partnership with Eastern Michigan University’s Family Empowerment Program and the Washtenaw Racial Equity Office, the Center for Equitable Family and Community Well-Being surveyed 607 Ypsilanti residents from June 12 to August 21, 2020, on the impact of COVID-19. In this brief, we discuss the disparate impact the global pandemic has had on Ypsilanti’s residents of color. We find the virus has exacerbated existing inequalities, such as household budgets, and created new ones, such as the ability to work from home.

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