Promoting Home Ownership as a Path to Financial Freedom / Public News Service

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There has been little change in homeownership rates for black families in 50 years, which is why some lenders are rethinking their practices to make buying a home a reality rather than a dream.

Studies show a 20-30% gap between black and white homeownership rates has persisted for more than 100 years, despite the increase in black homeownership in the mid-1900s. Among the many today’s causes include credit scores average around 649 for 60% of African Americans.

Jonathan Leysath, Jacksonville branch manager for Self-Help Credit Union, said they’ve adjusted their mortgage products to help increase equity in the loan process and be more lenient with buyers with credit issues. .

“The Equity Boost product can go down to a credit score of 580 with only a minimum borrower investment as low as 1%,” Leysath explained. “As opposed to the FHA, which is 3.5%.”

Leysath argued that flexibility is important because many factors continue to block the economic progress of blacks. They understand the negative economic effects of the pandemic and the burden of heavy student debt, which disproportionately affects people of color.

Another possible solution to enhance equity is for more financial institutions to offer similar programs to help people access more resources.

Self-Help Credit Union‘s executive vice president of communications, development, policy and impact, Crystal German, said finances often fuel discussions about disparity and wealth. She emphasized that their goal is to create innovative and holistic programs to help people of color build wealth through homeownership.

“I mean, it’s about having a freedom,” German pointed out. “And it may not be physical freedom, but it is a financial freedom that allows people to live their best life.”

The Fair Housing Act passed in 1968, prohibiting anyone from being discriminated against when renting or buying a home. Before civil rights legislation, many black families did not have the opportunity to create generational wealth by buying a home and passing it on to their children.

Disclosure: Self-Help Credit Union contributes to our fund for consumer, environmental, health and social justice reporting. If you would like to help support news in the public interest, click here.

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