African American Homeownership Challenges Subject of Upcoming Webinar

Efforts are being made to increase homeownership among African American families by an organization called the UHOUSI Initiative, a group led by prominent African American faith-based and civil rights leaders aiming to increase responsible homeownership.

Sponsored by Chenoa Fund, UHOUSI Initiative is hosting a webinar on May 21 called COVID-19 – What to Do About Housing?

Richard Ferguson,
Chenoa Fund President

Richard Ferguson, President of Chenoa Fund, said he hopes the webinar will help African American families as they experience homeownership challenges as it relates to COVID-19.

“In addition to the items that would one would expect as it relates to COVID-19, we’re also going to be talking about the challenges that African-Americans have with regards to obtaining home ownership. What are the main limiting factors? Whether it’s lack of down payment, whether it’s credit issues. And how, they as a community, might be able to overcome some of those,” Ferguson told Mortgage Media. “In addition to that, we’re going to be talking about the COVID-19-related issues, such as, what to do if you’re a homeowner now and you lose your job, what does forbearance mean? How could you obtain it? If you’re a renter, what rights do you have in terms of your rent payments and that thing. We’re going to be offering practical advice to the African-American community in terms of whatever housing situation they’re currently in, how they could be able to sustain that.

About the UHOUSI Initiative

UHOUSI Initiative was founded originally by Bishop Harry Jackson, as you mentioned, a faith- based leader who is also on President Trump’s evangelical council. He saw the lack of home ownership in the African-American community as probably the greatest civil rights issue of our time, with African-American home ownership being somewhere in the 40s versus white American home ownership in the 70s. And that wealth disparity that’s created by that as being like I said, one of the greatest issues of our time. And so, as we were conversing and talking in Washington, D.C., at one point, he was really passionate about trying to initiate a program in order to help African-Americans increase the rates of home ownership.

That was the Genesis of where Chenoa Fund came in and sponsored his efforts, created a program for him and be able to take out to his congregants. Since then, he’s teamed up with some additional civil rights leaders, such as Dr. Alvita King, and they are taking this initiative, if you will, nationally. Throughout their faith-based community and through other African-American gatherings in order to try to preach the message of the importance of home ownership.

 

Bishop Jackson and Dr. King are going to be presenting when you have a Webinar coming up on May 21. The Webinar is called COVID-19, What To Do About Housing. Can you tell us a little bit about what’s going to be covered?

In addition to the items that would one would expect as it relates to COVID-19, we’re also going to be talking about the challenges that African-Americans have with regards to obtaining home ownership. What are the main limiting factors? Whether it’s lack of down payment, whether it’s credit issues. And how, they as a community, might be able to overcome some of those. In addition to that, we’re going to be talking about the COVID-19-related issues, such as, what to do if you’re a homeowner now and you lose your job, what does forbearance mean? How could you obtain it? If you’re a renter, what rights do you have in terms of your rent payments and that thing. So we’re going to be offering practical advice to the African-American community in terms of whatever housing situation they’re currently in, how they could be able to sustain that.

 

How do you get the word out?

A couple of methods. We’ve created some recordings that will be distributed throughout the various churches. Bishop Jackson is also part of this evangelical council, as I mentioned, and is being disseminated out through several different churches and invitations are going out in that manner. Obviously, we’re using social media and traditional advertising to get the word out to the African-American community to be able to join us in this event.

 

The gap in home ownership rate between black and white families in the United States is bigger today than it was in the ’60s when it was legal to refuse to sell someone a home because of the color of their skin. In 1960, there was a 27 percent gap between black home ownership and white home ownership. But data from 2017 shows the gap even wider, at 30 percent. One of those reasons was efforts after the financial crisis in 2008, there was some predatory practices that caused a larger disparity in the impact on African-American home owners and home buyers. How do you see COVID-19 and the current pandemic and the current situation, what are the concerns for black home buyers now?

Back in 2008, we actually started to see that home ownership rate for the African-American community almost tip 50 percent. In fact, I think we finally broke the 50 percent barrier, but because of the predatory lending, like you mentioned, we saw that backtrack quite significantly, back down to the low 40s again. And so, Secretary Carson has talked about this as well, is that for some reason we don’t really understand why entirely the science behind it, but this disease seems to be affecting minority communities of color more than, say whites. Why is that? Maybe because there are more denser housing, we just don’t know. And so, the effects of this pandemic could have a debilitating effect on the efforts of African-Americans to be able to get into home ownership.

We already know that on average, African-Americans have one-tenth the net worth of white families. And so, as they use precious reserves or savings that they may have due to job losses, in order to put food on the table, it’s going to affect them even more when it comes time to either find to buy a home or helping family members to be able to buy a home. Because whatever resources they might have had, will have been used in order to sustain life. And so, we’re really concerned about that effect. That’s one of the things that UHOUSI Initiative is trying to do is help African-Americans understand that there are resources specifically the Chenoa Fund Down Payment Assistance Program, that can help them be able to achieve home ownership. Even if they lack down payment, we can help them get the cash that they need in order to purchase a home with little-to-no money down.

 

What Chenoa Fund is doing?

Chenoa Fund is a government sponsored down payment assistance program. It was originally created by the Cedar Band Of Paiutes, which is an Indian tribe out of the state of Utah. And it’s designed to provide the three and a half percent down payment that is required on an FHA loan. So if you’re a borrower and you lack the down payment, as long as you’ve got good income, and you’ve got a credit score that’s above 620, you can qualify to be able to purchase a home. We will provide that down payment for you. So we will work with lenders around the country who work with the consumers in that we’ll provide the down payment, as well as that first mortgage for them.

And the down payment is in two main distinct forms. One is you can get a down payment that is forgivable, so that if you make your first mortgage payments on time for three years, you can get the entire down payment forgiven and you don’t make any payments on it in the meantime. The other form of down payment is where you actually will make a principal and interest payment on that second mortgage. You’ll make that for about a 10 year period in exchange for paying back the down payment, we actually will give a much lower interest rate on that first mortgage. So as a consumer, you have two choices. You can say, “I want to get that down payment for free, but I might take a little bit higher interest rate,” or, “I can get a normal market first mortgage interest rate, but I have to pay back that down payment over a period of time.”

 

Learn more about the USHOUSI Initiative, and sign up for the webinar here.