MIAMI – The National Association of Realtors (NAREB) calls on Congress to establish a major down payment assistance program to help address decades of housing discrimination in Florida and across the country that prevents black people and other people of color from becoming owners and facilitate intergenerational wealth.
In passing HR 5376, the original Build Back Better Act, the House included a $10 billion down payment assistance program for first-generation first-time buyers. But now the measure is in jeopardy in the Senate, where lawmakers have focused on gun control, inflation and the war in Ukraine. Even with these pressing issues, it is essential that a Down Payment Assistance Act be enacted to bring justice and fairness to our communities.
“For decades, black families and other families of color have faced housing discrimination that has prevented them from enjoying the generational benefits of homeownership,” said Danny P. Felton, president -Chief Executive Officer of The Experts, LLC and Vice Chairman of NAREB. . “As a result, many black families have not been able to pass down homes from generation to generation in their families, creating the wealth that can be used for down payments. That is why this bill is so important. This is helping to right the ship and put black families on the path to home ownership and wealth creation.
In Florida, a study by Zillow found that black applicants are denied mortgages by lenders 84% more than whites. While Florida’s black homeownership rate is 47% and higher than the national average of 43.4%, it is nearly 30% lower than Florida’s white homeownership rate. ‘state of 75.6%. The homeownership rate for Hispanics in Florida is 52%.
Felton said studies show many black families can afford monthly mortgage payments, but are unable to save the money needed for the down payment to buy a home. He explained that federal down payment assistance can boost home ownership for black people, other minorities and all low-to-middle income families.
“There are other options for down payment assistance, but they come with strings attached that can affect a family’s ability to be approved for a mortgage,” Felton said. “Some programs add a second mortgage or stricter salary and credit score requirements.” He also noted that some proposals tie down payment assistance to a tax credit, “but this relief does little to help a family that cannot close a home due to the size of the down payment. The federal grant program is the best option. This will not affect an applicant’s ability to qualify for a mortgage.
Lydia Pope, president of NAREB, urged Congress to act on a down payment assistance program. “Glare racial barriers have held back the expansion of black wealth in America for centuries,” she said. “A typical white family has eight times the wealth of a black family of similar stature. The median net worth of black households is $24,000, compared to $188,000 for white families. This ugly cycle can only be broken by improving the main driver of black wealth in America – intergenerational home ownership that can bring prosperity and family economic security.
Felton noted that biased appraisals also affect black people’s wealth and home buying. In Tampa, the average home owned by an African American was valued at $292,801, while the average home by a white family was valued at $336,235. Around Florida, black houses are undervalued. In Miami, a black-owned home is valued $86,000 less than a white one, in Jacksonville nearly $80,000 less, and in Orlando $45,000 less.
“There needs to be an end to valuation bias when black people sell their homes or need appraisals on new ones,” Felton said, noting that a Biden administration report confirms the extent of the bias. assessment across the country.
“Assessment bias, along with other forms of housing discrimination, have been barriers to Black homeownership. Many public and private sector leaders have pledged to usher in a new era of justice and fairness following the police killing of George Floyd. What we need now are not more words, but actions that can make a difference in our communities.