Dive Brief:
- JPMorgan Chase announced a plan Monday to invest $750 billion in housing initiatives by 2035. Funds will be used to help “build and preserve” 1 million affordable housing units, according to a press release.
- Money will also be used to help 500,000 customers purchase homes, with 200,000 of those being first-time buyers, the lender said. The bank said it will increase its mortgage lending by about 40% and hire 850 new home lending advisers.
- JPMorgan said in the release its new investment in housing over the next decade would represent a 40% financing increase in the sector for the bank, compared to the past decade.
Dive Insight:
The commitment to housing investment is part of JPMorgan’s “American Dream Initiative,” a multi-year economic mobility program it launched in March. Housing access and affordability is one of six focus areas for the program, along with business growth and entrepreneurship, financial health and wealth creation, career and skills, healthcare and local institutions.
JPMorgan’s Head of Commercial Real Estate Michelle Herrick said in the release that “an affordable and resilient housing market is essential to driving economic growth and increasing opportunity,” and the bank is looking to scale housing solutions across the country.
JPMorgan — among the largest multifamily and residential bank mortgage lenders in the country — said that beyond financing affordable housing units, it will work with housing developers, owners, nonprofits and governments to expand housing financing. The bank said it will measure affordable housing units by units that are less than 120% of the area median income.
The bank said it will use the JPMorgan Chase PolicyCenter and Institute to advance and advocate for policies that increase housing supply, expand access to homeownership and advance “tailored, local solutions.” In its policy advocacy efforts, JPMorgan will become chair of the U.S. Chamber of Commerce’s new Housing Advisory Council. The bank said it will also look to support the implementation of the recently enacted housing bill, the 21st Century ROAD to Housing Act.
“Owning a home can transform lives — providing stability, helping families build wealth, and creating a sense of community,” Chase Home Lending CEO Sean Grzebin said in the release. “Our goal is to make the path to homeownership clearer and more accessible for more people, wherever they are in their financial journey.”
Among its efforts on affordable housing, JPMorgan is making a number of investments in San Francisco’s Bay Area. The bank said it will provide almost $200 million to finance a 342-unit residential building, invest up to $15 million in equity financing in an “essential housing fund” from real estate company Fifth Space, and provide $6 million in new grants to local housing and urban development nonprofits, according to the release.
Fifth Space CEO Enrique Landa said the partnership with JPMorgan — and local nonprofit Crankstart — “brings together the capital and expertise to deliver workforce housing at the scale and speed this moment demands.”
“San Francisco’s housing crisis is real,” Landa said in the release. “We can keep debating it, or we can build.”
JPMorgan’s housing commitment comes a few weeks after Citibank said it would commit $25 million to affordable housing through its Citi Impact Fund, the bank’s social impact-focused venture capital fund.
That investment is part of Citi’s own broader housing opportunity initiative, which will look to invest $60 billion over a five-year period and aims to help create or preserve at least 250,000 affordable housing units in the U.S.
