Through the “Bridging the Gap” program, HUD hopes to give historically left-out people help to improve their credit, save resources for homeownership and build wealth.
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) released an agenda for “economic justice.”
HUD’s agenda, Bridging the Wealth Gap: An Agenda for Economic Justice and Asset Building for Renters, describes actions the department will take to help low-income renters build assets through savings, access to mainstream banking and credit score improvement.
In addition to the program, HUD Secretary Marcia L. Fudge also announced $113 million in funding.
“We’re looking at everything through a lens of equity and how we address systemic racism,” says Fudge. “We’re giving people who have historically been left out and underserved the resources to take a chance on their futures – to improve their credit, save resources for homeownership and other needs, and build wealth. That’s what this is all about.”
Unequal access to savings and banking especially impacts renters and contributes to a racial wealth gap. Most renters have a minimal financial safety net when things arise, such as unemployment or unanticipated expenses, such as car repairs or medical emergencies.
Less than half of American households have three months of savings, according to HUD. And in 2019, the median cash savings of renter households was $1,400 compared to homeowner cash savings of $10,100.
HUD says Bridging the Wealth Gap expands its work to build a connection between federal rental assistance and homeownership programs. It gives renters in HUD programs the necessary first steps toward financial well-being and potential homeownership through saving, credit building and banking.
Specifically, Bridging the Wealth Gap announces the following current and future actions HUD is taking to promote asset building:
Current asset building actions
- Launch the asset building moving to work (MTW) demonstration
- Expand asset building programs like the family self-sufficiency program
- Move from annual to triennial income recertification
- Support renters with credit and financial counseling
- Help HUD-assisted young adults save
- Partner with other federal agencies and stakeholders
Future asset building actions
- Build credit history through rent reporting
- Integrate financial well-being and supportive services into PHA standard practice
- Improve homeownership programs and supports for HUD-assisted renters
The $113 million-dollar Family Self-Sufficiency (FSS) program is the nation’s largest asset-building program for low-income families and currently serves around 65,000 participants at over 700 Public Housing Authorities (PHAs).
FSS is a voluntary program. Working with community partners, it coordinates services to create an escrow savings account that helps participants grow their earned income and savings. Upon graduation, the average family in FSS in 2021 had about $9,500 in savings.
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