For decades now, Black social movements have been fighting for racial equality for Blacks. And yet, despite the events that we watched unfold last summer after the grotesque murders of George Floyd, Ahmaud Arbery, Breonna Taylor and Elijah Mcclain, some still question whether systemic racism actually exists.
For proof of systemic racism, one need not look further than the rate of Black homeownership compared to Whites. From 1934 to 1962, 98% of all homeowners were White. After the passing of the Fair Housing Act of 1968, which prohibited discrimination in housing based on race, religion national origin, sex, handicap, and family status, the Black homeownership rate was at 41.1%, compared to 65.9% of Whites. According to the Census Bureau, only 44% of Blacks owned their home in the beginning of 2020, compared with 73.7% of Whites. That’s just shy of a 3% increase in Black homeowners 52 years.
One might wonder why the Black homeownership rate matters. It matters because homeownership is one of the greatest ways to build wealth in America. As such, research has consistently shown a direct correlation between the racial homeownership gap and the racial wealth gap. Historically, owning a home has been a way for whites and other communities to generate wealth from generation to generation. For many, a monthly mortgage payment can act as a forced savings account. As home equity grows, so does a homeowner's wealth and opportunity to perform additional wealth-building activities, such as refinancing to open a business, invest in stocks, etc. If we don’t move quickly and advocate for change, the racial wealth gap and racial homeownership gap will only deepen. This is why our mission at LEGACY Home Loans is to help Black families build sustainable wealth through homeownership.
So where do we start?
1. A Commitment
We at LEGACY Home Loans have committed ourselves to Black homeownership. This commitment runs deep and is integrated into our very DNA, from the types of loan products we offer to our common-sense underwriting approach. We offer government loans, conventional loans, down payment assistance and niche programs for those that are self-employed or had recent credit events like a foreclosure or bankruptcy.
We are also firm believers that the very work we believe in should also be performed at home. With this belief, our President, Ben Slayton continually advocates for our team members to become homeowners themselves. With LEGACY’s Employee Loan Program, employees can obtain down payment assistance or lender credit towards the purchase or refinancing of a home.
2. Education
In becoming educated about the home buying and mortgage loan process, many would realize that the path to homeownership is actually more obtainable than most believe. There are a number of free homebuying workshops that prospective homebuyers can attend, both in-person and virtually. Consumers can also use free home affordability calculators online to learn exactly how much house they can afford to purchase. Lastly, there are a number of LEGACY Home Loans Loan Officers who would be happy to sit down, review your financial situation and provide you with a comprehensive and customized overview of the steps that need to be taken in order to purchase a home. Connect with one of our loan officers or real estate partners today.
3. Be an Advocate
Due to discriminatory loan practices, Blacks are denied for home loans 80 percent more frequently than Whites. And these kinds of statistics can trickle down to nearly every part of the loan process. There was a story that broke just this month about a Black couple who, after receiving a low appraisal value for their home, ordered a second appraisal and asked their White friend to pose as the homeowners. Their home appraised for over $400,000 much more than the first appraisal.
As the largest Black-owned mortgage lender, we at LEGACY Home Loans are passionate about and devoted to creating more Black homeowners. This means, that we work with our borrowers and coach them through the loan process as much as possible. We also believe in accountability and consistently challenge our partners and other mortgage lenders, banks and professionals to be an advocate for the Black community. This means speaking up when things seem unfair, paying attention to unethical practices and implicit biases and being proficient and meticulous to ensure that loans are processed accurately and fairly.
These are just a few small steps that can be taken to close the racial homeownership gap and increase the numbers of Black homeowners in America.
