Community-Centered Lending: Designing Products for Families, Not Just Markets

By Justin A. Sackey, MSW

Heirs’ property isn’t just about who owns the house on paper. It’s about who’s lived there, who’s paid the taxes, who’s fixed the plumbing and cut the grass and made sure the house stayed standing. It’s about the cousin who moved back to take care of the homeplace. It’s about the grandmother who kept it going after everyone else left. It’s about the people who’ve held the line in places where the system never really showed up.

But here’s the issue: because that ownership isn’t always formalized, or because it doesn’t come with only a single name on a deed, the housing finance system treats it like it doesn’t exist. Even when someone’s lived in a home for 15 years, paid every bill, and maintained the place, they’re told they can’t borrow against it. Not because they don’t qualify as a borrower, but because the system doesn’t recognize the way ownership actually works in families and communities that have had to make do.

The scale of this problem is real. One-third of Black-owned land in the South is tied up in heirs’ property. That’s over 3.5 million acres, worth around $28 billion. Families in these situations aren’t looking for handouts. They’re looking for financial tools that reflect their reality. The issue isn’t a lack of responsibility. It’s a lack of recognition.

Take the buyout process. This comes up all the time. One heir wants to take on the full ownership of a family home, so they offer to buy out the shares of their siblings or cousins. It’s a way to keep the house in the family and stop a forced sale. But there’s a catch. The person trying to do the buyout doesn’t have a clear title yet because the whole point is that they’re in the middle of clearing it. So, when they apply for a loan for the buyout, they get denied. The bank says, “Come back when you have a deed in your name.” But they need the loan in order to get the deed.

This isn’t hypothetical. In many states, families have a very short window, sometimes just 60 days, to come up with the funds before the property gets sold off. There is no safety net. There is no standard loan. And even if someone is ready to step up and stabilize the ownership, they can’t get access to capital in time.

Even when the buyout isn’t the barrier, legal fees often are. Clearing title isn’t free. Between court costs, attorney fees, required notices, and mediation services, families can spend thousands just trying to resolve ownership. For low-income heirs, especially in rural areas, these costs push title clearance out of reach. And without legal resolution, heirs are locked out of repair loans, refinancing, and property tax assistance programs. It’s a cycle that starts with being excluded and keeps going because the system never steps in to help.

Then there’s the issue of low-value property. A home might be completely paid off but valued at $60,000. In some rural communities, that’s normal. But from a lending perspective, it means the home doesn’t offer enough collateral to back a traditional loan. Add in shared ownership and unclear title, and the property basically disappears from the financing map. It doesn’t matter that the family is invested, that someone lives there, or that the home is habitable. If the paperwork isn’t right and the appraisal is too low, the borrower is told “no.”

But the thing is, it doesn’t have to be this way. There are already systems that look at ownership differently. USDA, for example, accepts documentation like tax receipts, affidavits, and land use records to issue farm numbers to heirs’ property owners. FEMA allows alternative proofs of residency and ownership for disaster aid. These programs recognize that in the real world, ownership isn’t always defined by one person and one deed. Housing finance can do the same.

What if lenders used property tax history or long-term occupancy as a proxy for ownership? What if legal costs for title clearing were an eligible use of funds from down payment assistance or repair loan programs? What if non-real estate assets, like equipment, lease income, or business revenue, could be considered as part of the collateral package?

This is what it means to design lending products for families, not just markets. It means understanding that equity isn’t always clean-cut, but it’s still equity. It means respecting the ways people have kept homes and land in their families when every other system made that hard.

Families navigating heirs’ property are already doing the work. They’re maintaining homes, paying taxes, keeping the lights on, and trying to pass something down. They’re not asking for special treatment. They’re asking for recognition and a chance to access the same financial tools other homeowners already have.

It’s time for lending to reflect reality. Not just risk scores, but responsibility. Not just paperwork, but people. Because community-centered lending doesn’t just preserve property, it preserves legacy.

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.