Housing Issues in the Hispanic/Latino Community Overcoming Common Barriers to Expand Housing Opportunities Presented by Rocio Arevalo LaCasa of Goshen,

Housing Issues in the Hispanic/Latino

Community

Overcoming Common Barriers to Expand Housing

OpportunitiesPresented by Rocio Arevalo

LaCasa of Goshen, Inc.

Housing Issues in the Hispanic/Latino Community

The U.S. Census Bureau has predicted that by 2010, minorities will comprise two-thirds of the approximately 15 million new households in America.


Hispanic/Latino Population (can be of any race)

Percent of Population

Indiana

Allen County

Cass County

Clinton County

Elkhart County

Kosciusko Co.

Lake County

St. Joseph County

Tippecanoe County

236,367

15,654

3,227

3,032

18,990

3,993

61,580

13,558

8,660

3.8%

4.6%

7.9%

8.9%

10.2%

5.3%

12.6%

5.1%

5.7%


Roadblocks Lack of Consumer Education Low Incomes, High Housing Costs Inflexible Mortgage Underwriting Criteria Discrimination Predatory Lending Lack of Outreach to Latino Market


Lack of Consumer Education

-Cultural and Language differences

-Lack of bilingual and bicultural Professionals

-”Old Country Knowledge”

-Different levels of education

-Lack of familiarity with financial institutions


Low Incomes, High Housing Costs

“Despite recent gains, the Latino homeownership rate continues to be 20 percentage points below the national rate of 68%”


In addition to being burdened by high housing costs, Hispanics are more likely to live in housing that is of poor quality and/or overcrowded.

According to the National Council of La Raza, 28% of Hispanics live in crowded households compared to 2% of White households.


Inflexible Mortgage Underwriting Criteria.Lack of Credit

Loans manually underwritten

Not knowing how to solve credit problems

Co-sign for family members


Discrimination1989 HUD reported that more than 50% of

Latinos encountered some form of discrimination.

A decade later, 1999 a study by the Urban Institute demonstrated that high levels of housing had not diminished.


Predatory LendingSteeringCo-signHigh Cost Loans

Predatory Lending does not differentiate between Legal Immigrants and those who are undocumented!!!


Lack of Outreach to the Latino Market

Lack of consumer information in SpanishPoor quality translations

An example:Housing Market in Mexico

Federal Government gives incentive to Private Contractors

Private Contractors develop neighborhoods

INFONAVIT or FOVISSSTE administers federal-sponsored mortgage programs

Workers register through their Union to one of these organizations, apply for assistance and wait.

An example:Housing Market in Mexico

This is what most Mexican Immigrants are used to:

Mortgage terms 10 to 20 years Interest Rates range anywhere between 11% up to 15% No PMI (All loans require 20% DP minimum) HO Insurance offered through bank or Social Security

organization Mortgage payments are withdrawn automatically from

the HO’s employment (not bank account!!!)


Possible Solutions

Face-to-face pre-purchase counseling Partner with organization offering

training/counseling in Spanish Have bilingual and bicultural employees Know who’s who in the Latino community

Latino magazines/papers Reputable and trusted leaders

Consider offering Financial Fitness Training


Undocumented Families

Can they achieve the dream of homeownership?


Census data estimates as of January 2000 there were approximately 5.8 million undocumented Latinos in the U.S.

Undocumented immigration status creates major barriers to homeownership because immigrants have difficulty proving their identification and credit history


Secondary Market (Fannie Mae, Freddie Mac and Ginnie Mae) do not purchase mortgages taken out by the undocumented.

Lenders re accepting Individual Taxpayer Identification Numbers, issued by the IRS, as a form of identification.


The U.S. Census Bureau estimates the Undocumented Resident Population in Indiana to be about $45,000.

ITIN LoansPilot Program

Neighborhood Housing Services of Fort Worth and Tarrant County

NHSA (Neighborhood Housing Services of America) has become the Secondary

Market. Current Pilot Program includes 5 million dollars.

ITIN LoansPilot Program

Requirements:Participants need to have an approved I-130

form from USCIS.Need stable income and good non-traditional

credit history97% LTVNo grants are allowedMinimum Interest rate at 7.5%

Documents

Housing Issues in the Hispanic/Latino Community Overcoming Common Barriers to Expand Housing Opportunities Presented by Rocio Arevalo LaCasa of Goshen,