In 2010, the US Department of Housing and Urban Development released the article “Barriers to Minority Homeownership.” The top three barriers detailed in this article were the down payment and closing costs, lack of access to credit and poor credit history, and a lack of understanding and information. Unfortunately, over a decade later, many reports still mention the down payment and closing costs as the largest (or the second largest) barrier to homeownership, such as the Urban Institute’s Barriers to Accessing Homeownership, and more recent articles (CNBC, “42% of Non-homeowners Say This is What’s Preventing Them From Buying a Home”; DS News, “Biggest Barriers to Homeownership”), in addition to adding other major concerns: lack of inventory, rising home prices, and stagnant wages.
The purpose of bringing this up is not to bemoan the state of homeownership in the US. There have always been challenges to responsibly growing homeownership and, while our goal should be overall improvement, challenges will likely always exist. But where there are challenges there are also opportunities to help and serve each other, creating a rising tide that lifts all boats. There are so many initiatives and programs available to borrowers today that have never been available before—and many of these initiatives have a specific focus on potential homeowners in minority communities.
As far as down payment and closing cost difficulties are concerned, borrowers have never had more opportunities to receive responsible down payment and closing cost assistance than now. Nearly every US state has a Housing Finance Agency that offers assistance catered to residents of that state, not to mention the many cities, counties, and employers that also offer their own assistance programs. And to top it all off, CBC Mortgage Agency offers down payment assistance through the Chenoa Fund, further expanding the options that knowledgeable borrowers have to find the best deals for themselves. And borrowers who don’t quite meet the requirements for down payment assistance can often find other programs, like Link Home Loans that provides access to home financing for those in the gap between renting and owning.
Down payment assistance programs (and other homeownership programs) do some incredible heavy lifting in helping borrowers who don’t have the savings for a down payment, or who don’t have perfect credit scores, become homeowners. Many of these programs, especially for borrowers with lower credit scores, require homeownership education classes, which go a long way to help borrowers keep their homes after purchase. In addition, organizations such as NAREB, NAR, NAMMBA, and NAHREP seek to help potential borrowers learn about homeownership (and be prepared for it). Borrowers have more educational opportunities than ever before, and speaking to anyone focused on helping improve minority homeownership quickly reveals the passion the people in this market have.
There are definite ups and downs to the market, and not necessarily every need is being directly addressed at the moment: while potential homebuyers continue to charge the market, lacking inventory and rising prices and rates will inevitably cause many to bounce off. Unfortunately, it’s just not realistic to imagine a situation where literally every adult owns their own home, for a variety of reasons that range from a lack of interest to, in some cases, just plain not being ready for homeownership. But things have been improving in recent years, with many minority groups seeing an overall increase in homeownership rates, in part because of the many tools and resources available now. Only the future can reveal what industry advances and programs will be devised by creative entrepreneurs to help even more buyers become responsible homeowners than ever before.
CBC Mortgage Agency™ – NMLS 1186381
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Illinois Residential Mortgage License #MB.6761292. Illinois Department of Financial and Professional Regulation, Division of Banking, 100 West Randolph, 9th Floor, Chicago, IL 60601 – 1-888-473-4858. Georgia Residential Mortgage Licensee, License # 1186381