Bridging the Appraisal Gap: Strategies for Making Affordable Homeownership Transactions Work

Affordable homeownership can become difficult to achieve when the cost to build or purchase a home exceeds the amount a homebuyer can reasonably finance through an affordable first mortgage. This “appraisal gap” can create challenges for housing counselors, nonprofit housing developers, lenders, and homebuyers. This is especially true in low- and moderate-income communities where comparable sales may not adequately reflect the cost, quality, or value of newly constructed or improved homes. 

This 90-minute webinar will help HUD housing counselors and affordable housing professionals understand the appraisal process and explore practical strategies for addressing appraisal gaps in affordable homeownership transactions.  

We will touch briefly on the definition of appraisals and the difference between appraisals and inspections. We will also give a quick overview of the continuing fair housing issues in appraisal services today. The primary focus of this webinar discusses strategies for bridging the gap between the cost and value of an affordable home and the amount LMI borrowers can afford for their first mortgage and resulting PITI. Participants will explore how housing counselors and nonprofit housing developers can identify and stack available resources, including down payment assistance (DPA), grants, deferred or forgivable second mortgages, subsidized financing, state and local housing programs, and other public and private resources. 

Participants will examine examples of loan products and affordable homeownership programs that may permit the use of subordinate financing and layered assistance, as well as strategies developers can use to identify funding sources that help subsidize the cost of constructing or acquiring affordable homes. By the end of the webinar, participants will have a framework for helping homebuyers and affordable housing organizations understand appraisal-related challenges and identify potential resources and financing strategies to make affordable homeownership transactions financially feasible. 

Sue Ortiz is the Chief Programs Officer with Habitat for Humanity of Michigan and is the Executive Director of Fair Lending Services. She is also a consultant with NCRC and loves to create curriculum material and facilitate webinars, virtual, e-learning, and live trainings. Sue holds a Master’s degree in Counselor Education and Counseling Psychology, and has numerous certifications in housing counseling and financial coaching.