Housing Issues in the Hispanic/Latino Community Overcoming Common Barriers to Expand Housing Opportunities Presented 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.

Housing Issues in the Hispanic/Latino Community 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, % 4.6% 7.9% 8.9% 10.2% 5.3% 12.6% 5.1% 5.7%

Housing Issues in the Hispanic/Latino Community Roadblocks Lack of Consumer Education Low Incomes, High Housing Costs Inflexible Mortgage Underwriting Criteria Discrimination Predatory Lending Lack of Outreach to Latino Market

Housing Issues in the Hispanic/Latino Community 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

Housing Issues in the Hispanic/Latino Community Low Incomes, High Housing Costs “Despite recent gains, the Latino homeownership rate continues to be 20 percentage points below the national rate of 68%”

Housing Issues in the Hispanic/Latino Community 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.

Housing Issues in the Hispanic/Latino Community Inflexible Mortgage Underwriting Criteria.  Lack of Credit Loans manually underwritten  Not knowing how to solve credit problems  Co-sign for family members

Housing Issues in the Hispanic/Latino Community Discrimination  1989 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.

Housing Issues in the Hispanic/Latino Community Predatory Lending  Steering  Co-sign  High Cost Loans Predatory Lending does not differentiate between Legal Immigrants and those who are undocumented!!!

Housing Issues in the Hispanic/Latino Community Lack of Outreach to the Latino Market  Lack of consumer information in Spanish  Poor 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!!!)

Housing Issues in the Hispanic/Latino Community 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

Housing Issues in the Hispanic/Latino Community Undocumented Families Can they achieve the dream of homeownership?

Housing Issues in the Hispanic/Latino Community 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

Housing Issues in the Hispanic/Latino Community 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.

Housing Issues in the Hispanic/Latino Community The U.S. Census Bureau estimates the Undocumented Resident Population in Indiana to be about $45,000.

ITIN Loans Pilot 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 Loans Pilot Program Requirements:  Participants need to have an approved I-130 form from USCIS.  Need stable income and good non-traditional credit history  97% LTV  No grants are allowed  Minimum Interest rate at 7.5%