The $18.4 million mortgage loan subsidy fund established by Philadelphia’s former top home mortgage lender, Trident Mortgage Company, as part of the Pennsylvania Office of Attorney General’s major redlining settlement reached last year, has officially launched.

Trident is no longer generating home loans, so it has contracted with Prosperity Home Mortgage Company to administer the loan subsidy fund through an initiative dubbed Pathway to Prosperity, consisting of two programs – HomeAssist and HomeAccess – to provide up to $10,000 in financial assistance per qualifying transaction. HomeAssist provides funds for the purchase or refinance of a primary residence located in an eligible area as defined by the census. HomeAccess provides funds to current residents of eligible areas for the purchase of a primary residence anywhere Prosperity is licensed to lend.

The loan subsidy program’s launch comes after Trident conducted a credit needs assessment for the Philadelphia region’s majority-minority neighborhoods and performed other necessary planning tasks.

“This subsidy program will make a difference to many hundreds, possibly thousands, of families impacted by historic redlining practices in Philadelphia,” said Pennsylvania Attorney General Michelle Henry. “But we know it’s not a substitute for sustained effort from all stakeholders. For too long, companies have avoided offering mortgages in neighborhoods that are home to predominantly people of color, denying them equal access to mortgage credit. This is one small step toward correcting that injustice.”

The Pennsylvania Office of Attorney General and its state and federal partners – the Attorneys General of New Jersey and Delaware, the Consumer Financial Protection Bureau, and the U.S. Department of Justice – have all approved the program. Implementation also requires enhanced outreach to residents of the region’s majority-minority neighborhoods, consumer financial education, community development partnerships, and Prosperity opening new physical locations in targeted neighborhoods.

“Redlining is one of the modern era’s most damaging and insidious forms of racism,” said Delaware Attorney General Kathy Jennings. “Few practices have done more to enforce de facto segregation in our communities, and the legacy of that segregation — yawning racial disparities in wealth, inter-generational poverty, public services funded in whole or part by property taxes, and opportunity as a whole — has caused unspeakable harm. It will take generations to truly repair that harm — but this subsidy program will make a real, tangible difference for hundreds of redlining’s victims.”

“The launch of this important loan subsidy fund marks a critical step in our efforts to redress Trident Mortgage Company’s mortgage redlining practices, and to begin the process of making whole the communities that have been harmed by generations of systemic housing discrimination,” said New Jersey Attorney General Matthew J. Platkin. “These subsidies will make a significant difference in the lives of many New Jerseyans who have been locked out of home ownership.  But we know there is much more work to be done in the fight against housing discrimination and mortgage redlining, and we are grateful to our state and federal partners for their close collaboration with us in this fight.”

“Redlining” is a term that goes back decades and refers to a practice by which banks and mortgage lenders systematically underserved and discriminated against neighborhoods with high percentages of African Americans, Hispanics, or other marginalized racial and ethnic minorities. The practice deprives such areas and their residents of adequate credit. The lack of competition also makes residents of redlined neighborhoods vulnerable to unscrupulous, predatory lending. Historic redlining and underinvestment in majority-minority neighborhoods, including those in Philadelphia, correlate with current patterns of poverty and blight, as the Philadelphia Inquirer reported in the fall of 2021.