Protecting Homeownership From the Impact of COVID-19

During and after the Great Recession, almost eight million homeowners nationwide lost their homes to foreclosure.

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While vacant and abandoned homes blighted many neighborhoods throughout the country, tight access to credit locked many prospective owner-occupants out of the market. As a result, foreclosed properties were overwhelmingly sold to investors, and ultimately more than five million homes transitioned from owner-occupied to investor-owned rental homes. These trends were even more concentrated in communities of color, sending the homeownership rates for both Blacks and Latino Americans tumbling. Indeed, the homeownership rate for Blacks has not recovered.

Today, we face a different housing crisis. The COVID-19 pandemic is wreaking havoc on people’s health, well-being, employment, and housing stability. In this new research, the National Fair Housing Alliance and National Community Stabilization Trust identify best practices learned from the Great Recession and provide substantive recommendations to blunt the pandemic’s impact on homeownership and households of color.


The authors’ recommendations fall broadly into two buckets: policies related to people and properties.

Policies that improve people’s outcomes:

  • Increase access to COVID mortgage forbearances
  • Give borrowers the post-forbearance options best suited for their circumstances
  • Encourage communication between borrowers and mortgage servicers
  • Ensure the Homeowner Assistance Fund meets its goals
  • Support alternatives to foreclosure, such as short sales, for those who need them
  • Prevent the pandemic from negatively affecting consumer credit scores
  • Allow borrowers to access new mortgages after forbearance and foreclosure
  • Eliminate forbearance penalties that decrease access to credit

Policies that improve property outcomes:

  • Prioritize homeownership and neighborhood stabilization in distressed and REO sales
  • Properly maintain REO properties in all neighborhoods
  • Prevent zombie foreclosures and aggressively address vacancy problems

By preventing unnecessary foreclosures and home loss, maintaining access to credit, ensuring vacant properties do not blight communities, and leveling the playing field for owner-occupants to purchase homes, the housing community can prevent the COVID-19 crisis from devastating homeownership and undermining racial equity in housing markets.