With Marcia Fudge at HUD, opportunity awaits for minority homebuyers

Quiz an average American, and you will discover homeownership among the top ranks when asked about the core tenets of the “American Dream.”

In fact, the National Association of Realtors’ annual survey consistently finds over nine in 10 homeowners see homeownership as part of achieving their personal American Dream. And recent studies found 71% of millennials aged 18-34 even perceived homeownership as part of their American Dream, too.

Sadly, this dream is still out of reach for far too many people — particularly minorities.

Today’s homeownership rates expose staggering disparities: While nearly 67% of all Americans own homes, only 44% of Black families own, compared with 73% of white families. Even worse, the Black homeownership rate is the same today as it was in 1968 when the Fair Housing Act was first enacted. Arguably, as a country we have made little progress improving minority access to homeownership in the decades since the anti-discrimination law was passed.

It seems for some the American Dream feels far from a reality.

But there may be light at the end of the tunnel. The confirmation of U.S. Housing and Urban Development Secretary Marcia Fudge presents an opportunity to restore the legacy of homeownership in America, something that for our communities of color has long been out of reach.

With a fresh perspective and approach to expanding housing opportunities to all Americans, Fudge has committed to prioritizing equality among homebuying. From her early days as the mayor of a small town in Ohio, Fudge began tackling housing affordability and availability — and she didn’t stop as a member of the U.S. House representing Ohio’s 11^th district. Given her long track record and current post at the head of HUD, I am hopeful she might leave a lasting and positive impact on this critical government agency and the millions of households it serves.

And there couldn’t be a better time for someone with Fudge’s experience to take the reins. Today’s consumers represent a new generation of homebuyers transitioning from renting to owning. The new homeowner’s profile will largely be made up of minorities, primarily Hispanic, Black and Asian. Among all buyers, though, down payment remain the largest barrier to homeownership — particularly for minorities.

At large, the BIPOC community lacks the intergenerational wealth needed to provide our own down payment. This is why down payment assistance programs are critical to right sizing the homeownership gap. Without DPA programs to help bridge this gap, we risk further deepening these racial disparities.

In 2020, more than 40% of all Federal Housing Administration purchase transactions had some form of down payment assistance. This data reflects the need and the diversity of the millennial generation coming into homeownership. Since our formation, CBC Mortgage Agency helped tens of thousands of borrowers across the country with their down payment assistance through the Chenoa Fund program. In 2020, 55% of our borrowers were minorities, with 75% representing the first generation in their family to ever own a home.

And contrary to some opinions, FHA loans with DPA from a governmental entity perform better than loans from family members, including intergenerational wealth families. And that’s something we’re proud of. We’re committed to seeing our borrowers successfully transition into sustainable homeownership.

The Chenoa Fund program complements other DPA programs by serving a broad audience of consumers, driving a healthy, competitive mortgage market, and introducing innovative financial products. Unlike other DPA providers who have different rules and requirements state by state, CBCMA uniquely provides one uniform set of underwriting guidelines to serve our customers across the country.

We’re doing our part, but much more can be done — and the time is now. After decades of promises from government leaders, we simply have not changed the homeownership rates for minorities — especially Black Americans — in any meaningful way. It’s imperative that HUD protect DPA programs, establish a national model, and explore ways to apply more consistency to federal programs. We believe Fudge is the right person at the right time.

It is time for the American Dream to become a reality for all Americans.