Alternative financing arrangements can be the only option for low-income Americans. But they lack the same protections as a mortgage, and many end up paying for years without ever gaining ownership.

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Finding an affordable home is tough enough, but for the many who can't qualify for a mortgage, it can seem impossible. A new survey finds tens of millions of Americans have resorted to risky alternatives. NPR's Jennifer Ludden reports.

JENNIFER LUDDEN, BYLINE: Donald Strayer thought he'd bought his family's dream home in Ohio's Appalachian Mountain foothills. It was $40,000. For the down payment, he'd sold the house he'd grown up in after his dad died.

DONALD STRAYER: Which was the only thing I have in the whole world.

LUDDEN: For years, he made the $350 monthly payments on his new home. And then...

STRAYER: One day, the sheriff just showed up because they foreclosed and wanted to take my property.

LUDDEN: It turned out the seller's family had kept Strayer's money instead of paying the mortgage. And they still held the deed, so it's not his property. Strayer had used a land contract, a financing deal directly with the seller. Another popular kind is called rent to own. The Pew Charitable Trust finds 1 in 5 borrowers have used these alternative financing deals - disproportionately people of color and those in rural areas. Pew researcher Tara Roche says they lack basic protections.

TARA ROCHE: The reality is a lot of homeowners don't end up owning that home because they don't get the deed or the title in their name. So this makes it really difficult to build equity.

LUDDEN: These schemes have been around a long time, but legal aid attorneys say they grew after the 2008 recession when millions of homes were foreclosed on and investors bought them in bulk. Peggy Lee with southeastern Ohio Legal Services says it's distressing. She's seen clients invest thousands to fix up rundown homes when in fact the seller never intends to turn over the deed.

PEGGY LEE: They just want to shift the burden of making repairs by letting them think that they're going to build some sort of equity in the home. And then, oops, the first time something goes wrong or they, you know, invent something that didn't go right, they're in eviction court.

LUDDEN: Several states have sued over deceptive marketing, and more lawmakers are proposing ways to protect people. Sarah Mancini of the National Consumer Law Center says that's good, but she says traditional smaller mortgages also shouldn't be so hard to get. She says the racial wealth gap makes the process inherently biased.

SARAH MANCINI: So when you see traditional mortgage underwriting over-relying on credit scoring and having such an unreasonably high credit score that's required, it really blocks borrowers of color disproportionately.

LUDDEN: And that can block a family's best chance of building wealth and moving into the middle class. Jennifer Ludden, NPR News, Washington. Transcript provided by NPR, Copyright NPR.