According to Freddie Mac, 3.4 million African American renters are in a position to buy a home. So, why aren’t we, in larger numbers, with homeownership as one of the foundational steps to building wealth?
Because African Americans still face major obstacles. According to the Consumer Financial Protection Bureau, we are consistently denied conventional home and refinance loans at higher rates than our white counterparts.
For example, out of 108 mortgage applications filed by African Americans last year, one of Maryland’s largest banks approved only 20 (19%) and denied 69 (64%). Another 19 (18%) “fell out” of the process; although clients ultimately got approved, they walked away from the loan, frustrated by the long, arduous process.
The numbers show the deck is stacked against Blacks even more than others. The good news? There is a way to beat these odds, with the right partner by your side in the process.
Work with a partner such as HomeFree-USA to get approved, fast.
Over 25+ years in the housing industry, helping people of color get the financing they deserve, this is what we’ve observed: All too often, applicants are just a few simple changes away from being credit-ready for the mortgage process.
With the right guidance, you can prepare for success and get the information you need to navigate the mortgage or refinance process quickly and easily.
By way of example, 96% of homebuyers who go through HomeFree-USA’s programs get approved on their FIRST application.
You want to choose a partner who can help you build a meaningful relationship with your lender and make the process—and your life!—easier.
Here’s how to choose the right partner:
- DO seek an experienced credit counseling agency that can connect you with down payment assistance and credit preparation programs, with a proven track record of success. Ask about their process and approval rates.
- DON’T expect a “quick fix,” or confuse credit repair with credit counseling. Avoid companies that charge you high fees to “fix” your credit. (Most of these firms leave you no better prepared for the home buying process.)
- DO look for advisors willing to speak candidly with you, ask questions and give impartial advice you can’t get from a lender. The best advisors will explore issues affecting your readiness, analyze your situation, and provide solutions to improve your standing, which will require simple actions on your part.
- DO seek a counseling agency first, before talking to a lender. They can help identify issues that may cause your application to be denied before it happens—without impacting your credit score.
- DON’T go to a lender, loan officer, or broker before consulting with a counseling partner. Financial institutions are obligated to run a loan application if you ask for one, which can impact your credit.
- DO find nonprofit partners who have trusted relationships with multiple lenders and will work directly with the lender on your behalf.
You want to create a better future. You’re eager to put in the work. You just need the right partner to cut through a process that’s stacked against you.
Where to find the best credit counseling partners
Bridging the gap between financial strength and homeownership for people of color across America, HomeFree-USA is just one of many organizations that help aspiring homeowners prepare for a mortgage application, get approved, and get access to resources they might not otherwise know about.
We have a nationwide network of trusted agencies dedicated to closing the homeownership gap for people of color and other marginalized communities. You can also check out the U.S. Department of Housing and Urban Development for a comprehensive list of local, recommended intermediaries ready to help.We are ready to support you to get approved for your mortgage or refinance. To begin a conversation with HomeFree-USA, contact us at email@example.com, call 855-493-4002, or visit our website at homefreeusa.org.