Beyond the Deed: Rethinking Ownership, Credit, and Lending for Heirs’ Property Owners
By Justin A. Sackey, MSW
Imagine this.
You’ve lived in your grandmother’s house for over a decade.
You pay the taxes. You fixed the roof when it collapsed.
You take care of the yard, keep the lights on, and make sure your little cousin has somewhere safe to come home to.
Then one day, you apply for a home repair loan to fix the plumbing and the bank says no.
Not because your income is too low.
Not because you’ve missed payments.
But because you don’t have a deed.
That’s what it means to be an heirs’ property owner in America.
For many heirs’ property owners, the biggest barrier to stability isn’t the lack of a home, it’s the systems that refuse to recognize that they own one.
Across the country, families live in homes passed down through generations, pay property taxes, maintain the land, and care for the house. But because they inherited the property without a will or through informal means, their names aren’t on a deed. And without that deed, the financial system often treats them like strangers to their own homes.
It’s time to rethink how we define ownership and how we lend against it.
Demonstrated Ownership Deserves Recognition
More than $32 billion in generational wealth is currently tied up in heirs’ property land and homes passed down without a formal will or clear title. Commonly affecting Black families in the South, heirs’ property is the leading cause of Black land loss in the United States. In urban and rural communities alike, families live in homes they inherited but can’t borrow against.
Conventional lending models require clear, fully vested title to originate a mortgage or home equity product. But in heirs’ property scenarios, ownership is often shared between siblings, cousins, or extended family members, with no single person listed as the legal titleholder. The result? Homes with deep personal and cultural value are rendered financially invisible.
But what if we acknowledged demonstrated ownership, the kind backed by consistent tax payments, maintenance, residency, and even legal affidavits?
Federal programs like FEMA and USDA already accept alternative documentation to verify homeownership for disaster relief and rural assistance. It’s not a stretch to imagine financial institutions piloting similar approaches for home repair loans, refinancing, or buy-outs that help heirs stabilize and invest in their properties.
Inherited Homes, First-Time Access
Many heirs may not be “first-time homebuyers” in a regulatory sense but in practice, they’re experiencing homeownership for the first time. They’ve never taken out a mortgage, built credit through a housing loan, or navigated the title clearing process.
Yet traditional first-time homebuyer programs don’t apply. Instead of pushing for reclassification, there’s a better path: nontraditional credit underwriting.
Through models like Fannie Mae’s HomeReady or Limited Cash-Out Refinance (LCOR) loans, lenders already have tools that allow for:
- Use of rental and utility payment histories
- Consideration of shared household income
- Flexible debt-to-income calculations
By expanding these underwriting practices to cover heirs’ property scenarios, especially where ownership is being clarified or formalized, lenders can create accessible pathways to long-term stability.
Legal Alternatives: The Role of Attorney Title Opinion Letters
When title insurance isn’t available, another option is already in use: attorney title opinion letters.
In certain rural housing programs, legal professionals can certify that a borrower has a valid ownership claim, even without a traditional deed. These certifications provide a clear, risk-informed path forward for lenders and a lifeline for borrowers caught in legal gray zones.
By expanding the use of title opinion letters, especially in partnership with legal aid clinics and nonprofits, title clearing efforts could unlock financing for thousands of heirs’ property owners, many of whom are just one step away from stability.
From Aspiration to Action
None of these solutions require rewriting the entire rulebook. They simply require interpreting the rules with empathy, creativity, and clarity. Lending on demonstrated ownership. Recognizing nontraditional credit. Accepting legal opinions where title insurance fails. These aren’t radical ideas; they’re practical, tested tools ready to be scaled.
The truth is, owning a home should be about more than just holding a piece of paper. It should be about responsibility, stewardship, and the right to stay and invest in a place you call home.
And for heirs’ property owners, that future starts when lenders stop asking, “Do you have a deed?” and start asking, “Do you have a claim we can help you formalize?”
Justin A. Sackey, MSW is a former Research Fellow at the Housing Assistance Council. He is a dedicated public health and social work professional with a strong interdisciplinary background in behavioral health, housing policy, and equity-focused research. He holds a Bachelor of Science in Biobehavioral Health from Pennsylvania State University and a Master of Social Work (MSW) from Howard University. Justin has contributed to impactful research and policy initiatives focused on housing instability, heirs’ property, and the intersection of land tenure, mental health, health equity, and the intersection between housing and health outcomes. He has worked with organizations such as the Housing Assistance Council (HAC), the National Community Reinvestment Coalition (NCRC), Howard University, and The Pennsylvania State University.
