New Campaign to Help People of Color Buy Homes

How the Program Can Help You

New Campaign to Help People of Color Buy Homes
September 23, 2015

Minority homeowners took an incredible hit during the 2007-2009 housing crisis, as their homes tended to contain a greater percentage of household net worth as compared to white households. When housing prices collapsed, these households suffered greater losses and were generally in greater jeopardy of losing their home. Consequently, minority households have had a more difficult time recovering from the Great Recession.

A recent Pew Research study underscored this dilemma by pointing out the increasing inequality of net worth between white and minority households. According to the study, the median wealth of white households in 2013 was ten times that of Hispanic households and thirteen times that of black households.

A new public education program intends to assist minorities with homeownership efforts. "Mi Primera Casa!" (My First Home) is a collaborative effort of the Hispanic Federation and the New York Urban League that is focused on raising awareness of the challenges minorities face in finding and purchasing a home, as well as emphasizing homeownership as a way for minority communities to build their collective wealth and provide economic stability. The program hopes to effect meaningful change through public policy changes as well as educational efforts.

U.S. homeownership was at 64% at the end of last year, and among black and Hispanic families the numbers were even lower (42% and 45% respectively). The white homeownership rate was considerably higher at 71%. In announcing support for the program, Arva Rice, President of the New York Urban League, said, "It's time for our government, leaders, and America's financial institutions to work together to offer communities of color an opportunity to close the minority homeownership gap."

It is difficult for minority households to save up the necessary down payment for a home, but credit is still a challenge for those who do. Hispanic Federation president Jose Calderón pointed out that while black and Hispanic households constitute a combined 30% of the U.S. population, they are able to claim only 12% of U.S. home loans. Calderón refers to this as a systemic problem "that dates back many generations."

Calderón's claim is essentially true, but the larger obstacle is more recent. The Dodd-Frank reforms tightened credit in general and made subprime loans difficult to acquire. Banks are beginning to loosen up but credit is still relatively tight across the entire market. Combine this effect with the systemic problems Calderón's refers to, and the challenges become daunting. Colorlines.com reported that black borrowers were "more likely to be granted predatory subprime loans, even when compared to white homeowners with the same credit score."

Other studies have confirmed the systemic problems. Julián Castro, the Secretary of Housing and Urban Development (HUD), revealed at a recent Fair Housing Policy Conference that a HUD study concluded that homebuying families of color are discriminated against by being shown fewer properties and charged higher prices.

One of the first efforts of Mi Primera Casa will be to urge the President and Congress to take Fannie Mae and Freddie Mac out of conservatorship and restore them as independent agencies. Both Fannie and Freddie were established to work with mortgage lenders and help more people attain home ownership, especially within the minority community.

To be effective, MI Primera Casa will have to follow all tracks simultaneously — exposing and correcting discrimination, persuading lenders and government agencies to stretch lending and credit policies to accommodate greater minority lending, and helping minority communities establish the wealth building and saving habits necessary to buy a home. Let's hope they succeed in their efforts.


Photo ©iStock.com/Fertnig

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Sara | 09.23.15 @ 13:36
Interesting information to have. Never really thought of it that way.
Zanna | 09.23.15 @ 13:39
When even an article that is supposed to highlight positive efforts to allow more diversity in home loans uses phrases that sound rather racist and condescending, it's no wonder that there are so many families facing discrimination when they apply for loans. It's sad.
Angie | 09.23.15 @ 13:41
The last paragraph outlines a huge mountain of an objective. It's been one way for decades - wonder what they'll have to do to suddenly change minds and influence actions? I'm not so optimistic...
Erin | 09.23.15 @ 13:44
It's good to see another education program get started. Hopefully it will be far-reaching enough to be effective.
trish | 09.23.15 @ 13:45
I guess we are the Caucasian minority, because we too were hit hard with the housing crisis. We were in the lucky category as we applied for over a year and were accepted into the Making Homes Affordable program. I think any program that will help homeowners buy or keep a home they currently own, is good for both the homeowner and the economy.
Stokes | 09.23.15 @ 13:53
Good information. This recession has hit so many groups of people so hard.
Leah Gardner | 09.23.15 @ 13:53
Umm yeah everyone was hit in the housing crisis. Not one group or another.
Steffanie | 09.23.15 @ 13:55
Interesting information
Nancy | 09.23.15 @ 13:55
An optimistic pursuit to be sure. I hope they are more successful than history has been.
Britt | 09.23.15 @ 13:58
Lots of interesting information here. Great article.
Crystal | 09.23.15 @ 14:05
Is it really about race? How about just saying homeowners without mentioning color, nationality, religion.. because I'm pretty sure we all suffered to some extent. And we all deserve access to fair and equal housing.
Elaine | 09.23.15 @ 14:07
Don't think it was just the minority's that took a hit.
Selena Walls | 09.23.15 @ 14:08
Interesting article.
Wanda Langley | 09.23.15 @ 14:10
Great information. I hope they succeed with their efforts.
Christina | 09.23.15 @ 14:17
Exactly what I was thinking @Zanna ...
Kyle | 09.23.15 @ 14:18
Interesting for sure. I never thought about that
Morgan | 09.23.15 @ 14:19
Never considered any of this before, but it does make sense
Angie Taylor, Insurance Agent in Montevallo, AL | 09.23.15 @ 14:21
As a minority person, I can tell you... I've seen the trouble my family has had when it comes to getting a house.
gracie | 09.23.15 @ 14:24
I believe everyone should get equal assistance and empowerment in buying homes. Everyone was hit hard in the economy.
Tina | 09.23.15 @ 14:39
I think all people groups were hit hard by the housing crisis. I know my family struggles daily, despite our lighter skin.
Jo Ann | 09.23.15 @ 14:46
It is a shame that people who are credit worthy can't get loans and are getting turned down, What is worse though is the SUB PRIME rates they are given. I was a victim of a sub prime loan and yes when the bottom fell out, I lost my home. One day your home is worth 50%; less than what you paid for it, no selling to get out from underneath it so you loose everything. Rebuilding credit after that kind of hit is probably never going to happen for me.
Beverly | 09.23.15 @ 14:50
Loosening up credit requirements for purchasing a home is what caused the housing crisis in the first place. People were buying houses they couldn't afford and getting loans they didn't understand. It was predatory lenders preying on people that didn't understand the terms, all they knew was they suddenly qualified for a house that before they couldn't have. Financial education is a must.
Daniel Dohlstrom | 09.23.15 @ 14:51
Wouldn't it be great to reach a time where it is just people applying for home loans with no need to classify as minorites at all, but until then it is good that programs exists to be used
Sarah | 09.23.15 @ 14:53
Well... okay then. Whatever works for them.
Heather | 09.23.15 @ 15:00
Too bad they don't have this program to encompass everyone and not just a certain group.
Christina | 09.23.15 @ 15:05
Have to agree with Zanna also. Racist...
Christina | 09.23.15 @ 15:08
This has hit more than just people of color. I think everyone is paying for this.
Rindy | 09.23.15 @ 15:08
It will be interesting to see how this works, if it does. Seems like the same old red tape to me.
George Middleton | 09.23.15 @ 15:12
Interesting article.
Kamie | 09.23.15 @ 15:18
Not sure why the color of one's skin, or ethnic background matters for owning a home.
Ron | 09.23.15 @ 15:25
Aside from asking institutions to stretch their lending criteria as these are likely the same too big to fail banks that had no problems ripping off people just fine before, how does this keep the banks from gaming the system, yet again?
Bobbie | 09.23.15 @ 15:57
Lowering qualification standards is part of what contributed to the crash in the first place. Lenders got greedy and homeowners wanted instant gratification in getting houses that were out of their price range. Does this article and the research take into consideration the overseas investors that come in and pay over asking price just to turn the house into a rental?
Kailie | 09.23.15 @ 16:14
Lots of great information.
Meredith L | 09.23.15 @ 18:03
I think it's a little sad that we have to have programs like this to begin with. We should start with educating everyone so they can find proper jobs and find appropriate housing. Until that's taken care of, programs like this will still exist and the racial divide will continue to be highlighted.
pdhanson | 06.10.16 @ 18:34
isn't this what started the housing bubble that caused the collapse in 2008?
klsalem | 06.10.16 @ 23:21
Here we go again. The definition of stupidity is doing the same thing over and over, but expecting another result.
Amal | 06.11.16 @ 15:32
It is difficult for minority households to save up the necessary down payment for a home, but credit is still a challenge for those who do. -- Yes, that is because minorities do not finish high school nor go to college. Their income is far below other wage earners. It's easy to see the root-cause, but the solution is not easing credit rules, but these people need to find a solution to their problem, not get a gov't handout.
Jim | 06.13.16 @ 09:46
Racism at it's best! Can white's get this help? It is not taxpayer's job to provide housing!
Jim | 06.13.16 @ 09:46
IF YOU WANT A HOME GET A JOB AND SAVE!
Tisha.kcrow | 06.13.16 @ 12:57
"Stretching lending and credit policies" as are called for here is a big part of what caused the last mortgage crisis. Guess some people simply do not learn past poor decisions that have been made in our country.
$commenter.renderDisplayableName() | 12.08.16 @ 04:19
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