On February 13, 2025, financial leaders convened in Philadelphia, PA, to discuss a financial solution aimed at preserving home ownership and building generational wealth for heirs households. The meeting brought together lenders, community development professionals, philanthropic investors, legal experts, and housing counselors to discuss a new mortgage lending product designed specifically for heirs properties.
Heirs’ properties are created when a homeowner dies without formal estate planning to establish the new rightful owner, and thus the ownership is divided among living heirs. There are an estimated 500,000 heirs properties nationwide. While the heirs are the rightful owners, until they complete legal processes and clear title, they do not have access to the traditional benefits and legal protections afforded homeowners. For example, without clear title, heirs are not able to borrow against the value of the home to make essential home repairs, jeopardizing the home’s condition and making it more susceptible to predatory cash offers.
The group emphasized the importance of addressing families unable to access wealth in properties and using the development of the financial solution as a bridge.
The primary goal of the loan product is to ensure borrowers become capable long-term homeowners, with a secondary goal of preserving wealth for heirs through home equity. The group emphasized the importance of addressing families unable to access wealth in properties and using the development of the financial solution as a bridge. Focused discussions centered around the purpose, scalability, borrower considerations, underwriting criteria, legal issues, and funding strategies for the proposed loan product. Discussions of scaling the model included: finding CDFIs in different locations, securing funding from various sources, and considering the role of funders in providing loan guarantees.
The goal of the working group is to create a pilot loan product for deployment by Local Initiatives Support Corporation (LISC) in Jacksonville and builds off of our previous work supporting LISC Jacksonville’s Family Wealth Creation Initiative. For more information about that effort, you can read the Heirs' property resolution and prevention: Jacksonville, FL case study from Results for America’s Economic Mobility Catalogue. We look forward to continuing to share news from this exciting initiative. Contact Fourth Economy to discuss what heirship outreach might look like in your community.