Homeownership Policies to Improve the Financial Security of Households of Color and Low-Income Families September 25, 2017
Welcome Carmen Shorter Senior Manager for Learning, Field Engagement Prosperity Now
Housekeeping This webinar is being recorded and will be available online within one week All webinar attendees are muted to ensure sound quality Ask a question any time by typing the question into the text box of the GoToWebinar Control Panel If you experience any technical issues, email gotomeeting@prosperitynow.org
Prosperity Now s mission is to ensure everyone in our country has a clear path to financial stability, wealth and prosperity.
Our Unique Promise We open doors to opportunity for those who have been kept off the path to prosperity. We help people build wealth by making sure they have what they need to build a better future. We enable meaningful mobility through research, policies and solutions.
Today s Agenda The Racial Wealth Gap: Road to Zero Wealth Race, Homeownership and Affordability Current Homeownership Landscape Prosperity Now s Affordable Homeownership Strategy and Campaign Audience Q&A Next Steps
Today s Speakers Dedrick Asante- Muhammad Senior Fellow, Racial Wealth Divide Prosperity Now Anju Chopra Senior Policy Manager, Government Affairs Prosperity Now Lot Diaz Vice President, Housing and Community Development UnidoUS Doug Ryan Director, Affordable Homeownership Prosperity Now
Dedrick Asante-Muhammad Senior Fellow, Racial Wealth Divide Prosperity Now
How the Racial Wealth Divide Is Hollowing Out America s Middle Class
The Road to Zero Wealth
Understanding Wealth
The Racial Wealth Divide & Middle-Class Security
A Minority within a Minority: The Black and Latino Middle Class
Percentage of Population with Wealth Below or Above Middle-Wealth White Black Latino Asset Poor/Working Class 42.22% 72.12% 72.26% Middle-Wealth 18.77% 15.19% 14.22% Asset Strong/Wealthy 39.01% 12.69% 13.60%
The Racial Wealth Divide Beyond 2024
Current Public Policies Are Preserving the Racial Wealth Divide
Poll What is the biggest barrier to homeownership in this country? Insufficient savings for a downpayment Poor or nonexistent credit Types of lending products being offered Lack of affordable homes for sale Other (tell us more in the comment box) Use the Comment Box to share your thoughts with us about barriers to homeownership!
Anju Chopra Senior Policy Manager, Government Affairs Prosperity Now
The Current Homeownership Landscape The Importance of Homeownership Homeownership Rates by Race Wealth Generated Through Homeownership
Homeownership Parity and the Racial Wealth Divide The Racial Wealth Audit Parity in Homeownership Rates Parity in Appreciation
Present-Day Barriers Unaffordable Downpayments Lack of Access to Quality Credit Aggressive Marketing of Subprime Products Reduced Access to Mainstream Banking Ongoing Discrimination
Federal Policy Solutions Replace the Mortgage Interest Deduction Preserve the Mission of GSEs and Protect the CFPB Promote More Inclusive Scoring Models Duty to Affirmatively Further Fair Housing Enforcement
Poll Which federal homeownership programs do you work with regularly? Select all that apply. 502 Direct and Guaranteed Self-Help Homeownership Opportunity Program (SHOP) FHA Title II Fannie Mae & Freddie Mac products: HomeReady & Home Possible Other (tell us more in the comment box) Use the Comment Box to share more about the federal homeownership programs you work with!
Lot Diaz VP, Housing and Community Development UnidosUS
Headwinds Facing LMI Homeownership
What are the Homeownership Trends Homeownership Rate dropped from over 69% in 2003 to around 64% today (same rate as 1995) White 72.2% Asian/other 56% Latino 45% Black 42.3% The foreclosure crisis effectively reversed the wealth gains, widening the gap between white and communities of color
Key Variables Fanning the Headwinds Inventory NAHB calculated a 3.2 million shortage in homes for sale between 2013 & 2018 Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) bulk sales of mortgages to investors that target rental vs homeownership Individuals are competing against investors. Tighter Credit Lenders and Investors requiring higher credit quality for prime products Major banks appetite for community lending down Cost of Origination MBA estimates the cost of origination rose from $5,985 in 2008 to $8,887 currently
Evolution of Some Major Actors Supporting LMI Lending Fannie and Freddie have rolled out low-down payment mortgage programs with some enhancements Major lenders are moving away from FHA, due to concerns with the false claims act; and moving away from lending to riskier borrowers The capacity of housing counselors, which enable more families to Pursue homeownership, are struggling to maintain capacity
Key Regulatory Issues Decision to halt the scheduled MIP reduction at the beginning of the year ended an effort to reduce the cost of borrowing HUD has advised lenders to no longer partner with down payment assistance providers that come from secondary market sources GSE reform that avoids "market creaming" and eliminates federal mandates regarding access and affordability
Doug Ryan Director of Affordable Housing Prosperity Now
The Importance of Affordable Homeownership Why Homeownership Still Matters: Remains the greatest source of wealth for American families Offers opportunity for intergenerational wealth transfer Homeownership rates still below recent levels For families of color, homeownership is even more out of reach
Prosperity Now s Affordable Homeownership Strategy & Campaign Raising effective homeownership strategies and policies Preparing families for homeownership Homebuyer education Credit building Lowering the barriers to homeownership Alternative building types Zoning and shared equity strategies Sustaining homeownership Savings strategies Mortgage servicing
Take action with Prosperity Now Campaigns! Sign up to stay informed about the latest developments and opportunities to take action by joining one of our four federal policy campaigns. HOMEOWNERSHIP CONSUMER PROTECTIONS SAFETY NET TURN IT RIGHT-SIDE UP Homeownership is key to building wealth. Together, we will advocate for products and policies that provide more affordable homes to more people. Consumer protections create fairer, more transparent financial markets. Together, we will ensure consumers keep the safeguards they deserve. Safety net programs help protect vulnerable individuals and families from falling deep into poverty. Together, we will protect programs like SNAP, IDAs and more to help those in need when they need it most. The vast majority of tax incentives go to those at the top, not to those who need it most. Together, we will turn our upsidedown tax code rightside up. Visit any of the Campaigns above at https://prosperitynow.org/get-involved to learn more and join.
Take Action at the Prosperity Now Advocacy Center! Make your voice heard by calling, emailing, tweeting or scheduling a visit with your Members of Congress with a fast and simple click of a button! https://prosperitynow.org/take-action
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What s Next for Advocacy? Challenges and Opportunities Dodd-Frank modifications Consumer Financial Protection Bureau Underwriting rules Housing finance reform Affordable Housing Goals Duty to Serve Appropriations and tax reform USDA and HUD Mortgage interest deduction
Panel Discussion Dedrick Asante- Muhammad Senior Fellow, Racial Wealth Divide Prosperity Now Anju Chopra Senior Policy Manager, Government Affairs Prosperity Now Lot Diaz Vice President, Housing and Community Development UnidoUS Doug Ryan Director, Affordable Homeownership Prosperity Now
Audience Q & A What questions do you have? Share them in the Questions box!
Today s Speakers Dedrick Asante- Muhammad Senior Fellow, Racial Wealth Divide Prosperity Now dasantemuhammad @prosperitynow.org Lot Diaz VP, Housing and Community Development UnidosUS ldiaz@unidosus.org Anju Chopra Senior Policy Manager, Government Affairs Prosperity Now achopra@prosperitynow.org Doug Ryan Director of Affordable Homeownership Prosperity Now dryan@prosperitynow.org
Next Steps Join the Affordable Homeownership Advocacy Campaign for updates: https://prosperitynow.org/advocate/affordablehomeownership Learn more about our latest racial wealth divide report, The Road To Zero Wealth. Join the discussion during our webinar and Twitter Town Hall on Tuesday, October 17! Register today at http://bit.ly/2xvol9r Register with the Prosperity Now Advocacy Center at www.prosperitynow.org/take-action
The Prosperity Now Community The Prosperity Now Community facilitates learning creates connections & inspires action to create and improve programs and policies that foster opportunity, especially for those who have not had it before. Get involved in the Community today! Sign up to stay informed about Prosperity Now and the Community. Sign up today at prosperitynow.org/join.
Want to dig deeper? Sign up for listservs and working groups, volunteer to facilitate peer discussions, serve in a leadership role and more! Affordable Housing Network Racial Wealth Equity Network Innovations in Manufactured Housing (I M HOME) Network Taxpayer Opportunity Network Adult Matched Savings Network Financial Coaching Network Campaign for Every Kids Future Children s Savings Accounts Visit any of the networks above at prosperitynow.org/getinvolved to get started.
Take action with Prosperity Now Campaigns! Sign up to stay informed about the latest developments and opportunities to take action by joining one of our four federal policy campaigns. HOMEOWNERSHIP CONSUMER PROTECTIONS SAFETY NET TURN IT RIGHT-SIDE UP Homeownership is key to building wealth. Together, we will advocate for products and policies that provide more affordable homes to more people. Consumer protections create fairer, more transparent financial markets. Together, we will ensure consumers keep the safeguards they deserve. Safety net programs help protect vulnerable individuals and families from falling deep into poverty. Together, we will protect programs like SNAP, IDAs and more to help those in need when they need it most. The vast majority of tax incentives go to those at the top, not to those who need it most. Together, we will turn our upsidedown tax code rightside up. Visit any of the Campaigns above at https://prosperitynow.org/get-involved to learn more and join.
Take Action at the Prosperity Now Advocacy Center! Make your voice heard by calling, emailing, tweeting or scheduling a visit with your Members of Congress with a fast and simple click of a button! https://prosperitynow.org/take-action
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