Prompt 1:
Financial Innovation
Competition Prompt:
Encouraging First-Time Home Buyers
Propose an innovative financing solution to make homeownership more attainable for first-time buyers earning 80-100% of the Area Median Income (AMI) across the U.S.
Context
Bridging the homeownership gap for first-time, middle-income buyers
First-time home buyers in the U.S. are facing the steepest affordability challenge in a generation. According to the Urban Institute, the gap between home prices and household incomes is at its widest point in over 30 years. Freddie Mac data shows that since 2019, home prices have surged more than 40%, far outpacing wage growth. For many, particularly middle-income households, this imbalance is putting homeownership increasingly out of reach.
One of the most affected groups are middle-income households, defined as households which earn 80–100% of the Area Median Income (AMI). These households often earn too much to qualify for public assistance housing programs (which often help renters) and earn too little to comfortably buy market-rate homes—especially in high-demand cities.
Why does this affordability gap persist?
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Price–Income Mismatch: Home prices have risen rapidly while incomes—especially for those in the 80–100% AMI range—have remained relatively flat.
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Financing Gaps: Traditional mortgage structures favor buyers with large down payments or family wealth. Moderate-income, first-time buyers often lack both.
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Debt Burdens: Student loan and consumer debt inflate debt-to-income (DTI) ratios, disqualifying otherwise creditworthy applicants.
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Limited Access to Assistance: Most down payment programs target households earning below 80% AMI, leaving a gap just above that threshold with few viable options.
The role of financial innovation in improving affordability
Historically, financial tools—not just public policy—have expanded access to homeownership. The 30-year fixed-rate mortgage, the rise of securitized lending, and the development of mortgage insurance markets helped democratize home financing in the 20th century. However, as noted by Harvard’s Joint Center for Housing Studies and the National Association of Realtors, these legacy structures no longer match today’s affordability landscape or the profile of the modern first-time buyer.
The affordability challenge for first-time, middle-income buyers is fundamentally financial: there is a misalignment between homes available at the right price for middle-income buyers and the earnings, savings, and credit scores of those buyers as they apply for mortgages to buy their first homes.
This prompt challenges you to develop new, market-based financing solutions that can close this gap. What solution can your team propose to improve the ability of a middle-income household to become a first-time homebuyer of a market-rate home?
Solutions to inspire your brainstorming process
The organizations below have innovative financial solutions that support increased homeownership for middle-income or low-income homebuyers. In addition to speaking with our industry experts, these solutions may be a source of inspiration as you brainstorm your ideas.
1. Home Buyer Assistance Programs
Arrive Home (2025 Ivory Prize finalist) offers down payment assistance combined with innovative financing solutions like the Earned Equity Program, which allows borrowers with nontraditional credit histories or underwriting challenges to enter long-term purchase contracts that lead to homeownership. The program targets underserved populations who struggle to qualify for traditional Federal Housing Administration mortgages by using lease-purchase structures and alternative credit evaluations.
Compass Working Capital (2024 Ivory Prize finalist) manages the Family Self Sufficiency program, which helps participants in affordable housing save money over time by escrow accounts tied to increasing rent payments, supporting wealth accumulation and eventual homeownership.
2. Smaller Homes / Accessory Dwelling Unit (ADU) Financing
A previous Hack-A-House winner proposed an innovative financing solution for smaller homes or ADUs, offering lower-cost housing alternatives tailored to moderate-income buyers. Smaller homes or ADUs often have lower construction costs that improve affordability for first-time buyers.
3. Shared Equity Programs
Homes for the Future (2025 Ivory Prize winner) is an example of a shared equity model to increase homeownership for low-income buyers. In a shared equity purchase, buyers often contribute only a portion of the full down payment while a third party contributes the rest of the down payment in exchange for sharing in future appreciation of the home. While shared equity models can increase a buyer’s ability to afford a home, sharing their home’s equity with a third party decreases the buyer’s profits when they sell or refinance the home.
4. Credit Building for Renters
Both Esusu and Stake are innovative credit-building platforms that are aiding in homeownership by allowing renters to build credit through their on-time rental payments or cash-back rewards or financial incentives for paying rent on time. Together, these tools promote renter financial health, expand access to affordable credit, and lay the foundation for long-term goals like homeownership.
Other innovations include new approaches to underwriting, loan design, better condo or starter home financing products, down payment savings products, and shared risk models. And there are many more! You can consult our industry experts or ask the Ivory Innovations team for additional examples.
Creating a Compelling Pitch
To create a compelling and competitive pitch, your proposal should meet the following criteria:
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Innovative, Feasible, and Scalable
Your solution should push boundaries while remaining grounded in real-world feasibility. It should address housing challenges in a way that can be applied broadly—not just to one site or city. While case studies are encouraged to illustrate impact, your solution must clearly demonstrate its potential for scale.
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Clearly Address the Prompt
Show that you’ve done your homework. A strong pitch reflects a thoughtful analysis of the housing affordability challenges facing communities today.
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Financially Grounded
Solutions should not only be visionary but also economically viable. Highlight key financial drivers, cost assumptions, and potential funding sources. The more clearly your solution shows an understanding of market realities, the stronger your pitch will be.
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Clear Path to Implementation
Your pitch should answer the question: How would this solution go from pitch to reality? Outline specific, actionable first steps. Examples may include early partnerships, capital sources, or community engagement approaches.
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Time-Conscious Presentation Format
You will have 3 minutes to present your idea, followed by 1 minute for Q&A. Be clear, concise, and persuasive.
Getting Started
To develop a strong proposal, begin with the following steps:
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Choose the Right Prompt
Review the available prompts and select the one that most excites your group and aligns well with your team’s background, skills, and interests.
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Understand the Landscape
Investigate how this problem has been addressed in the past. Use the examples above as a starting point and explore additional case studies, organizations, policies, or innovations that relate to your chosen prompt.
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Brainstorm and Build
Think creatively. Generate new concepts or identify ways to improve on existing solutions. Focus on ideas that are both impactful and practical.
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Engage with Industry Experts
Attend sessions with industry professionals to refine your thinking. Come prepared to share your idea and ask for constructive feedback.
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Iterate and Strengthen
Based on research and expert input, continue to refine and develop your proposal. A great idea becomes stronger through thoughtful revision and collaboration.
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Consult the Ivory Innovations Team
Reach out to the Ivory Innovations Team during the office hours (3:30pm to 8pm MT) to workshop your idea and receive early input on structure, feasibility, and presentation.
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(Optional) Use the Pitch Deck Template
You can use our suggested pitch deck format to guide your final presentation.
