Originally Posted: June 20, 2022
By: Trimmel Gomes
There's been little change in the homeownership
rate for Black families in 50 years, so some lenders are rethinking their
practices to make buying a home more a reality than a dream.
Research shows a 20%-30% gap between Black and white homeownership rates has persisted for more than 100 years, despite increases in Black homeownership in the mid-1900s. Among the many causes today include credit scores averaging around 649 for 60% of African Americans.
Jonathan Leysath, Jacksonville branch manager for Self-Help Credit Union, said they have adjusted their mortgage products to help boost equity in the lending process and be more lenient with buyers with credit challenges.
"The Equity Boost product can go all the way down to a 580 credit score with only a minimum borrower investment as low as only 1%," Leysath explained. "As opposed to like the FHA, which is 3.5%."
Leysath argued flexibility is important because many factors continue to block economic progress for Black individuals. They include the pandemic's negative economic effects and the burden of heavy student debt, which disproportionately affects people of color.
Another possible solution to building equity is for more financial institutions to provide similar programs to help people access more resources.
Crystal German, executive vice president of communications, development, policy and impact for Self-Help Credit Union, said finances often drive talks of disparities and wealth. She pointed out their goal is to create innovative and holistic programs to help people of color develop wealth through homeownership.
"I mean, this is about having a freedom," German emphasized. "And it may not be a physical freedom, but it is a financial freedom that allows people to live their best lives."
The Fair Housing Act passed in 1968, making it illegal for anyone to be discriminated against when renting or buying a home. Before the civil-rights legislation, many Black families were locked out of the opportunity to create generational wealth by purchasing a home and passing it down to their children.
Content for this Post is provided by Florida News Connection, a Bureau of Public News Service. Public News Service is a member of the The Trust Project.