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Urban Institute
Recent Research by the Urban Institute on What Can Close the Gap
› CRA lending patterns show that income is not a proxy for race, suggesting the need for better targeting: https:// www.urban.org/urban-wire/communityreinvestment-act-meant-combatredlinings-effects-45-years-later-black
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› Downpayment assistance targeted to first-generation homeowners could help as many as 5 million households, 34% of them Black, become homeowners. https://www.urban.org/urban-wire/ down-payment-assistance-focused-firstgeneration-buyers-could-help-millionsaccess-benefits-homeownership
› Special Purpose Credit Programs can encourage lending to people and places that have long faced disparities: https:// www.urban.org/urban-wire/how-placebased-special-purpose-credit-programscan-reduce-racial-homeownership-gap; https://www.urban.org/urban-wire/ how-people-based-special-purposecredit-programs-can-reduce-racialhomeownership-gap
› As part of a partnership with the FHLB of San Francisco to spur mortgage innovation and advance Black homeownership, researchers explore the potential of using alternatives to credit scores: https://www.urban.org/urbanwire/using-rental-payments-mortgagedecisions-could-create-more-inclusivehousing-finance › Analyzing mortgage denial rate disparities can highlight opportunities for greater fairness in mortgage underwriting, including refinances and home improvement: https://www.urban. org/urban-wire/what-different-denialrates-can-tell-us-about-racial-disparitiesmortgage-market.
› Streamlining refinances can help more
Black homeowners benefit when rates fall: https://www.urban.org/urban-wire/ streamlined-home-refinancing-programwould-lower-monthly-payments-andprevent-defaults
› Automated valuation models (AVMs) may reduce appraisal bias, but measures are needed to ensure disparities are not wired into the models: https:// www.urban.org/research/publication/ revisiting-automated-valuation-modeldisparities-majority-black-neighborhoods
› As with extending mortgages, assistance to prevent home loss for
Black homeowners also needs to be targeted: https://www.urban.org/urbanwire/how-can-policymakers-ensurehomeowner-assistance-fund-reachespeople-need
Snapshot: City of Atlanta
› Black households comprise 44% of the City of Atlanta’s population yet hold just 17% of the primary residence housing wealth.
› The Black-white homeownership rate gap is 28.6 percentage points in the MSA and 26.3 percentage points in the City of Atlanta (as of 2015–2019 ACS data).
Homeownership rates for both Black and white households have fallen since 2005–2009 period.
› Black applicants for purchase mortgages are more than 3 times as likely to be denied as white applicants, with debt-to-income being the #1 reason for denial.
More than 1 in 5 Black purchase mortgage applicants were denied in 2020.
› Freddie Mac estimates there are 205,700 mortgage-ready Black millennials (age 45 and younger) in the Atlanta MSA.
79.1%
67.1%
53.2% 44.5%
HOMEOWNERSHIP RATES, BY RACE OR ETHNICITY
Asian Black Hispanic White
Atlanta MSA City of Atlanta
75.5% 66.9%
47.1% 46.9% 63.5%
38.7% 38.6% 29.9% 57.0%
36.9% 34.9% 30.7%
2005–09 2010–14 2015–19 2005–09 2010–14
Source: American Community Survey. Notes: MSA = metropolitan statistical area. Values calculated using allocation factors provided by the Missouri Census Data Center. See: https://keys.nationalfairhousing.org/research/ for more information.
2015–19
A YEAR IN REVIEW ADDRESSING THE RACIAL HOMEOWNERSHIP GAP
MORTGAGE BANKERS ASSOCIATION
MBA continues to promote sustainable and affordable homeownership for underserved individuals and communities across the country through a variety and policy and market-based approaches. Efforts such as our CONVERGENCE place-based programs, the Building Generational Wealth through Homeownership initiative, and the Home for All Pledge, provide opportunities for strategic partnerships, sharing of best practices, and the development of programs that will enhance our work to increase homeownership opportunities.
CONVERGENCE
CONVERGENCE is a collective impact initiative to increase African-American homeownership and help close the racial wealth gap. CONVERGENCE leverages the strength and resources of local stakeholders including lenders, real estate professionals, housing counselors, nonprofit developers, and local government, as well as national partners in the housing ecosystem. CONVERGENCE works to close the information, trust, market, and resource gaps that create barriers to homeownership. There are currently two CONVERGENCE place-based locations: Memphis, TN, and Columbus, OH.
CONVERGENCE Memphis launched in March 2020 in partnership with the Tennessee Housing Development Agency. More than 120 individuals, representing 50 organizations, participate in CONVERGENCE Memphis. In the past year, the initiative focused on community engagement by hosting two homebuyer fairs, a financial counseling and money management webinar, a diversity career fair, an appraiser diversity information session, and a housing design workshop. CONVERGENCE Memphis also supported and participated in several events held by local, state, and national partners. CONVERGENCE Memphis was incorporated as a 501(c)3 in late 2021, established a Board of Directors, and recently hired an executive director. CONVERGENCE Columbus launched in July 2021 in partnership with the Ohio Housing Finance Agency, and the John Glenn College of Public Affairs at the Ohio State University. Despite launching during the COVID-19 crisis, more than 115 individuals, representing 55 organizations, joined the initiative. A Steering Committee was formed, five workstreams were created, and a strategic plan was developed. Recently, CONVERGENCE Columbus hosted two events; a webinar to inform industry practitioners about the various down payment assistance programs available to buyers and a homebuyer fair to introduce prospective homeowners to the buying process. Additional consumer-facing events, including a workshop on careers in the appraisal industry, are being planned for later in 2022.
HOME FOR ALL
MBA’s Building Generational Wealth through Homeownership initiative harnesses internal and external resources to help more African-American and Hispanic families become homeowners and close the racial homeownership gap. Through advocacy, partnerships, and connections within the industry, MBA raises awareness of homeownership opportunities, secures policy and program changes to expand homeownership readiness to future borrowers, and assists current homeowners with maintaining and maximizing the benefits of homeownership. Through this initiative, MBA led advocacy efforts for clarity of support for Special Purpose Credit Programs (SPCP) and is providing education and resources to help MBA members develop SPCPs.
The Home for All Pledge represents the mortgage industry’s long-term commitment to a sustained and holistic approach to addressing racial inequities in housing. The pillars of the pledge include promoting and supporting public policies and industry practices that advance minority homeownership and affordable rental housing; supporting market-based solutions through MBA’s place-based CONVERGENCE programs; championing Diversity, Equity, and Inclusion (DEI) in our workplaces and our industry; and supporting inclusion in singlefamily and/or multifamily housing through other activities. MBA is more than halfway to its goal of having 450 members signing the pledge by the end of 2022.
A YEAR IN REVIEW ADDRESSING THE RACIAL HOMEOWNERSHIP GAP
NAACP
Since its founding in 1909, the NAACP has worked to achieve equity, political rights, and social inclusion by advancing policies and practices that expand human and civil rights, eliminate discrimination, and accelerate the well-being, education, and economic security of Black people and all persons of color. The year 2021 was largely characterized by an ensuing global pandemic and the ushering in of a new Administration. The NAACP continued its work in support of increasing homeownership, and provided supports for homeowners at risk
HOUSING SUPPORT GRANTS
The NAACP in partnership with BeyGood and VistaPrint provided over $1Million in housing support grants to homeowners and renters who experienced financial hardships due to the Pandemic.
› BeyGOOD — In five days, the NAACP received over 25,000 online housing grant applications from across all 50 states. Applications were reviewed and vetted to identify 100 grant awardees for up to $10,000.00 in financial housing support.
› VistaPrint — Provided $100,000 in housing support grants to help delinquent homeowners in the Atlanta, Georgia area with up to $10,000 to pay their past due mortgage payments.
MORTGAGE AND COUNSELING SUPPORT:
The NAACP continued its 5-year partnership with Ocwen/PHH Mortgage. During the pandemic, 52 virtual Borrower Outreach Events were held in 24 states using a new virtual platform. These events provided an opportunity for delinquent customers to receive information necessary to navigate the complicated world of loan servicing. Customers were given options available to maintain homeownership from the loan servicer and a HUD approved counseling agency. These events allowed us to continue assisting an even greater number of struggling homeowners to remain in their homes.
NAACP TRAININGS AND SUPPORT
The NAACP held a two-part Fair Housing training that was available to our 2,200 Units/branches across the country. The goal of the training was to educate NAACP Units regarding fair housing laws, how to file a housing discrimination complaint and identifying access to housing support grant opportunities in their communities. Over one thousand NAACP leaders and members participated in the two-part training.
ADVOCACY
We sought to leverage the strong and early commitment by the Biden administration to elevate racial justice as a top priority; and engaged federal agencies in doing their part to end discrimination and injustice. The NAACP submitted policy recommendations to the Biden administration in January 2021. Included in the recommendations are two that specifically address housing:
› The Biden Administration should direct the HUD
Secretary to create a down payment assistance fund to increase homeownership rates and wealth accumulation for Black Households. This support would increase homeownership rates for Black households and should also reduce lender exposure.
› Reverse the racist housing policies of the last four years and reverse the July 23, 2020 rule repealing the Affirmatively Furthering Fair
Housing Rule.
PRIORITY CAMPAIGN
The NAACP launched its 50K and Beyond national campaign in June 2021 to call on President Biden and his administration to cancel a minimum of $50,000 in federal student loan debt. The student debt crisis has had a disproportionate financial impact on Black student loan borrowers. Across all racial groups, Black borrowers hold the most student loan debt. This is especially true for Black women who hold the highest amounts of student loan debt. Most people who owe loan balances greater than $50,000 live in neighborhoods where the median income is $40,000.
This debt is indeed a barrier to saving for a down payment and the purchase of a home. Homeownership is one of the main drivers of wealth in this country, particularly across generations. Increasing Black homeownership is a crucial goal in addressing the overarching racial wealth gap. Student loan debt exacerbates existing racial inequities. Elimination of this debt would go a long way toward increasing the homeownership rate for Black Americans, fuel upward mobility and equitable efforts to close the racial wealth gap. This year saw the launch of the first two phases of this national campaign. The NAACP has activated its network across the country to lobby and advocate on the issues surrounding student debt cancellation. Informational webinars were held that provided background and economic data on the debt crisis. Social media engagement spread across all NAACP platforms. Meetings were held with Congressional and Administration leaders as well as with White House Officials. #CancelStudentDebt
A YEAR IN REVIEW ADDRESSING THE RACIAL HOMEOWNERSHIP GAP
NATIONAL ASSOCIATION OF REALTORS®
Through its advocacy, research, and resources provided to REALTORS®, legislators, regulators, and other stakeholders, NAR is addressing housing and other industry-related challenges that impact homeownership. NAR is committed to comprehensive efforts to advance homeownership opportunities to close the racial homeownership gap.
NAR RESEARCH & REPORTS
NAR’s research team analyzes and produces comprehensive reports on housing market trends and obstacles for buyers across demographic groups.
› Obstacles to Home Buying (April 2022): Both potential and successful home buyers across races and ethnicities surveyed say they have faced obstacles like a lack of affordable homes, a lack of homes that fit their criteria, competing with multiple offers, and saving for a down payment. › The Double Trouble of the Housing Market (February 2022): A report on the “two troubles” simultaneously impacting the real estate market: record home prices and record low inventory, using data analyzing affordability at different income levels for all active inventory on the market and done partnership with Realtor.com® .
› A Snapshot of Race and Home Buying in
America (February 2022): A report looking at homeownership trends, mortgage market and affordability by race, and home buyer demographics using data from the NA R2021
Profile of Home Buyers and Sellers, home buyers and fair housing.
NAR’S FEDERAL ADVOCACY TO ADVANCE HOMEOWNERSHIP AND HOUSING SUPPLY
NAR advocates for improved access to homeownership, increased housing inventory, and ensuring fair housing for all, in addition to working to address challenges in the appraisal industry.
› Advocacy for Improved Access to
Homeownership & Solutions to Addressing
Housing Inventory Shortages: In May 2020, NAR welcomed over 8,000 members to Washington,
D.C. for the REALTORS® Annual Legislative
Meetings. REALTORS® engaged with members of Congress and staff to discuss current market challenges, including record-low housing inventory, supply chain issues, affordability challenges, rising mortgage interest rates, housing demand, and fair housing, among other issues. › Advocacy Efforts on Specific Legislation: During the legislative meetings, REALTORS® also asked members of Congress and congressional staff to:
` Co-sponsor the bipartisan Housing Supply and
Affordability Act, which creates a Local Housing
Policy Grant program for cities, states, tribes, and regional associations to enact pro-housing policies at the local level.
` Co-sponsor the Neighborhood Homes
Investment Act (NHIA) that would offer tax credits to attract private investment for building and rehabilitating owner-occupied homes, creating a pathway to neighborhood stability through sustainable homeownership.
` Co-sponsor the GREATER Revitalization of
Shopping Centers Act of 2021 that creates a grant within the Section 108 Loan Guarantee
Program to incentivize public and private investment in abandoned and underutilized shopping malls.
› Appraisal Industry Challenges: There has been a recent focus on the appraisal industry and proposals for reforms on how the property appraisal and valuation process can be improved.
NAR engaged with the Interagency Task Force on
Property Appraisal and Valuation Equity (PAVE) to discuss solutions and potential reforms.
NAR’S ACT! FAIR HOUSING INITIATIVE
NAR’s signature fair housing initiative emphasizes Accountability, Culture Change, and Training (ACT!) to advance fair housing in the industry. ACT! initiatives include raising standards for real estate licensees, offering brokerages tools to root out discrimination, and creating new and innovative fair housing training for REALTORS®. Specific efforts include:
› Discrimination Self-Testing: NAR has launched a program for brokerages to voluntarily test themselves for discrimination, allowing them to uncover and address internal fair housing challenges.
› Real Estate Licensure Reform: New NAR policy urges state REALTOR® associations to examine their state licensure law for fair housing training requirements and increase them if they fail to meet minimum standards. NAR continues to research and make recommendations to states on accountability for licensees found liable for fair housing violations.
› Fairhaven: A Fair Housing Simulation: In
November 2020, NAR launched Fairhaven, a new fair housing simulation training that puts REALTORS® in realistic situations where discrimination may occur—from the point of view of both agent and client.
› Bias Override:
Overcoming Barriers to Fair Housing, launched in April 2022, is a classroom course available for continuing education credit that helps real estate professionals interrupt stereotypical thinking so they can provide equal professional service to every client.
