Giving Credit Where it’s Due: Latinos and Credit Scores

By Agatha So, Policy Analyst, Economic Policy Project, NCLR
Family in front of house

In the run up to the Great Recession, Latinos and other low-income homebuyers of color more often than not received higher-priced mortgage loans than White borrowers. Today, Latinos and low-income communities of color are still being short-changed in the mortgage market.

In 2015, few mortgages were made to Latino and Black borrowers, with 8% of all home purchase loans made to Latinos, and only 5% going to Black borrowers. Tight lending standards have made it difficult for millions of Americans to buy a home since the Great Recession, especially for Latinos and low-income families with credit scores below 700. While the minimum credit score needed to qualify for a home loan has increased by 40 points, the credit scores of Latinos who receive mortgages have increased by nearly 80 points since 2000.  Moreover, Latino borrowers are less likely than White borrowers to have a credit score and full credit history, making them appear riskier to lenders than they really are.

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Is Homeownership Just a Dream for Latino Millennials?

By Agatha So, Policy Analyst, Economic Policy Project, NCLR

Family in front of home

While American families who bought a home before the Great Recession were likely most concerned with the interest rates of their home loan, today’s millennials might be more preoccupied with the interest rates and repayment plans on their student loans.

Nearly 70 percent of bachelor’s degree recipients leave school with debt. Student loan debt is one of the largest burdens carried by Americans today, second only to mortgage debt. As a result, it comes as no surprise that student loan debt may be holding back millennials, especially older millennials, from buying a home.

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Six Trends That Show Latino Homeownership is Important to the Housing Market and the Economy

By Agatha So, Policy Analyst, Economic Policy Project, NCLR

Headlines about the nation’s housing market have focused on the low homeownership rate, currently stalled at 63%, compared to a high in 2001 of more than 73%. Yet, little attention has been paid to the impact of the low Hispanic homeownership rate on America’s ongoing economic recovery, and in turn, the future of the nation’s housing market.

Overlooking this impact is a huge oversight, given that the majority of new households formed in the next two decades will be made up by homeowners of color. In fact, Latinos are expected to account for 40% of those new households. At the end of 2016, the Hispanic homeownership rate increased to 47%, but remained much lower than the peak of 50% nearly 10 years ago. With significant household growth on the horizon, creditworthy Latinos need access to homeownership to ensure that the opportunity to build wealth is available to all Americans in the decades to come.

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Making Quality Housing Affordable Again for Latinos in Los Angeles

By Agatha So, Policy Analyst, Economic Policy Project, NCLR

ELACC and partners with tenants’ rights fighters and allies from all over the state of California. Photos: ELACC

Homeownership continues to be essential to the creation of Latino family wealth, yet many Latino families are still trying to recover from the loss of their home to foreclosure during the financial crisis, as well as job loss during the recession that hit Latino communities hard.

For families who live in expensive cities like Los Angeles, homeownership can seem even further out of reach. In L.A., more than half of a family’s earnings goes to rent, and at 38%, Latinos have a lower rate of homeownership compared to other groups in the city. Even as families overall might pay less for a mortgage than on rent, Latino renters have difficulty saving for a down payment, let alone for a mortgage that would require nearly three times their median household earnings. Faced with this problem, community-based affordable housing organizations are finding creative ways of engaging community residents to make housing affordable for all.

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A Long Journey Home

Saul smiled. His eyes shinned behind the folds of his smile. He still couldn’t believe it. His dream of owning a home had just become a reality.

But Saul’s journey was not easy.

For more than 20 years Saul worked as a seasonal landscaper in Chicago’s suburbs. As soon as it was warm enough to work, Saul would begin redesigning Chicago’s intricate lawns and gardens. As the days grew longer, so did his workday. Every night he would return home… to a rented house.

Saul wanted more. He dreamed of being a homeowner.

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