As home prices surge, some areas are offering pockets of affordability with several homes under $100,000. In fact, in November, there were about 50,100 single-family listings priced at $100,000 or less across the country, according to realtor.com®—often low-priced properties located in smaller to mid-sized cities or in nearby suburbs and rural areas.

But buyers are struggling to snag one of these affordable homes as lenders pivot toward more financially rewarding transactions.

Realtor.com® explains that it’s typically not profitable for lenders to execute small-dollar mortgages or loans, defined as those that are $100,000 or less. Buying trends during the pandemic have made it even more difficult to receive a small-dollar mortgage. Lenders are focused on larger, more lucrative loans, which are surging due to low mortgage rates.

“It may be more difficult than ever for borrowers to get a [more modest] loan,” Nadia Evangelou, a senior economist and director of forecasting at the National Association of REALTORS®, told realtor.com®. “There’s such a high demand for high-dollar loans.”

Purchase loans are up 26.3% annually. The average purchase loan was $376,800 during the week ending Dec. 18. That is nearly four times more than a small-dollar loan. In 2019, only about 8.9% of all mortgages made for owner-occupied homes were less than $100,000.

Small-dollar loans can be more expensive for lenders to make. “The cost to originate [loans] keeps going up,” Steve O’Connor, senior vice president for affordable housing initiatives at the Mortgage Bankers Association, told realtor.com®. Lenders may even lose money on making smaller loans, particularly those below $50,000, because of the added fixed costs, including appraisals and processing and underwriting fees.

Some programs are being created to help make small-amount loans. For example, the MicroMortgage Marketplace—created by the Urban Institute and the Homeownership Council of America and lender Fahe—offers small-dollar loans through a pilot program that they hope to roll out nationally.

“There is a lot of affordable housing out there, but if you don’t have the financing and you can’t get the mortgage and you don’t have the cash on hand, [you can’t] get on the road to homeownership,” Sheryl Pardo, a spokesperson for the Urban Institute, told realtor.com®.

Meanwhile, investors are swooping in to purchase these low-cost properties in all-cash deals since they’re able to bypass financing. The homes then often become rental properties.