Remaking the American Dream by Vinit Mukhija

Author:Vinit Mukhija
Language: eng
Format: epub
Publisher: The MIT Press

LA Más aimed to address the lack of access to finance for less affluent homeowners. It launched a new program called the Backyard Homes Project in partnership with Genesis LA and Self-Help Federal Credit Union, a leading national CDFI. Self-Help would provide selected homeowners with a loan, and Genesis LA would provide the CDFI with a financial guaranty. Self-Help’s loan would be based on the credit union refinancing a homeowner’s existing mortgage to include additional financing to fund the new second unit’s construction. Because the loan amount would exceed the value of the existing collateral, Genesis LA agreed to provide a guaranty to Self-Help to mitigate the risk. In exchange for access to financing, and design and construction support from LA Más, homeowners who build second units through the Backyard Homes Project agree to rent the units to a Section 8, or rental subsidy, voucher holder for five years (De Simone communication 2018; Leung and Timme interview 2017). Although the program innovatively opened up access to credit for less affluent homeowners, Genesis LA’s guaranty facility of $650,000 with Self-Help could finance the construction of only four to six second units at a time (Mukhija and Meyer 2019). LA Más received more than two hundred applications in 2019 and 2020. It found that many homeowners needed small grants to evaluate the feasibility of building second units on their properties, and awarded planning grants to several applicants. By mid-2021, five projects were completed or under construction (De Simone interview 2021).20

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