Hispanic Homeownership Barriers Start To Fall.

A new study released by the Congressional Hispanic Caucus Institute’s (CHCI) HOGAR (Spanish word for home) Initiative suggests that a combination of factors that complement Hispanics strong desire for homeownership and strong work ethic, have helped increase the U.S. Hispanic homeownership rate; from 46.1% in September 2003 to 49.7% in March 2005.

The main recommendations of the study suggest that in order to nudge the Hispanic homeownership rate higher, mortgage loan interest rates must remain at historic low levels; Hispanics must continue to make substantial gains in population, education, and income; and the housing industry, in turn, must accurately measure the credit worthiness and capacity to save of Hispanics, while allowing for their pooling of incomes and resources.

“The results of this study are important because it provides a comprehensive view on everything being done that touches upon Latino homeownership, and presents it as a one-stop shop of findings and recommendations,” said CHCI President and CEO, Esther Aguilera.

The study, which focused on 63 Congressional Districts across the U.S. and Puerto Rico, credited the housing industry with helping more Latinos become homeowners through new flexible mortgage loan products, and wider dissemination of information on supplemental financial homeownership assistance from local and state governments for eligible low- and moderate-income individuals and families. The study also indicated that the mortgage industry’s response of hiring an increasing number of bilingual and culturally-sensitive housing professionals who can gain the trust of thousands of prospective new Latino homebuyers, has helped increase Hispanic homeownership.

The study, which forecasts that 60% of Latinos will own their homes by the year 2010, states that Hispanics represent an increasing portion of the age group where most home sales occur – 26 to 46 years of age. Accompanying this demographic change are the income gains made – more Latino families have annual incomes over $40,000, increasing by 80 percent from 1980 to 2000 – three times the rate of the increase of the overall middle class.

The findings also caution the mortgage industry that more work is needed to achieve a greater rate of Hispanic homeownership by the end of the decade. Three HOGAR fellows who presented the results of the study – Alejandro Becerra, Ron Jauregui, and Rebecca Villalpando, say that the findings indicate that despite these good-faith efforts by the mortgage industry, the lack of special attention or “hand-holding” reinforce Hispanics’ fear and mistrust of mainstream institutions due to predatory lending practices, pressures to purchase, complex home buying procedures and lack of flexible and quality loan products.

“Still at stake is the industry’s ability to fully tap its most emerging consumer market and Hispanics’ ability to realize the American dream of owning a home,” said HOGAR Fellow Ron Jauregui.

While “hand holding” may not be part of standard institutional practices, the study confirms prior findings that show that a new commitment to help Hispanics better understand the process may be what it takes to get more Latinos into homes. The fellows also contend that there continues to be a real disconnect from the real commitment that exists “at the top” to the actual customer service many Hispanics in the low-to-moderate income category are receiving.

“Many loan officers cannot take the time needed to serve their Latino customers and ‘hold their hand’ through the process,” said Alejandro Becerra, HOGAR Fellow. “This is because Latinos tend to apply for smaller loan amounts, take longer to process, and their loans are harder to close, on average.”

The study also recommends that because immigrants are expected to make-up a substantial percentage of the 14-16 million minority households by 2010, that there needs to be increased introduction of more flexible underwriting and credit scoring standards.

According to Becerra, “increasing a secondary market that will purchase mortgage loans sold to immigrants with an Individual Tax Identification Number is recommended to help the industry tap the significant ‘new arrival’ community.”

For more information at http://www.chci.org