“Black homeownership is where we build financial stability. We have security. We create generational wealth.”
~ Donnell Williams, President, National Association of Real Estate Brokers
I read this quote in a magazine for mortgage professionals, The Scotsman Guide. As a homeowner and a mortgage broker, I agree completely. It’s what I read next that shook me up.
Although Black home ownership has increased to a 12-year high earlier this year, the percentage of Black Americans who own homes is only 47%. That is 29 points below white home ownership, which reached 76% for the same time period (second quarter 2020).
Why is this? And more importantly, what can be done so that more Black citizens achieve the stability and security of owning their own homes?
As a mortgage professional, one thing I can do is offer hope in the form of some little-known facts. Facts that can help more people realize that they can become home owners sooner than they knew!
SEVEN FACTS YOU MAY NOT KNOW
- There are home buying programs with only 3% down payment.
- There are down payment assistance programs to help provide that 3% down. (These vary by state. Your mortgage broker is the best source for getting one.)
- If you have a boarder or room renter, you can count that income when they have been paying you for 10 months in a manner that can be verified (check or consistent deposit into your bank account — not cash under the table).
- You don’t need perfect credit to qualify for a home loan.
- Medical collections can be ignored with a FHA loan.
- Up to $2,000 in credit card collections can be ignored with a FHA loan.
- You may qualify for a FHA loan 24 months after a Chapter 7 bankruptcy is discharged.
TWO CAVEATS
- Down payment money must be verified, meaning you must show the source by providing two months’ bank statements. Cash is not allowed. More about that here.
- You should be on track with your finances, meaning no more than one 30-day late payment (preferably 0 lates) in the past 12 months.
I hope more Americans will make home ownership a reality. The sacrifice to save money is worth it. The sacrifice not to buy a snazzy car is worth it. Remember: house first, car second. No exceptions.
BEST WAY TO GET A HOME LOAN
I have a tee short that says, “Brokers are Better” for a reason. A mortgage broker has more flexibility and more options for home buyers — in addition to better rates most of the time. Brokers close loans faster and with less paperwork, in my experience. Therefore, it is my recommendation that you reach out to a mortgage broker licensed in your state.
By the way, I’ve never seen or heard of a mortgage broker who violated the Equal Credit Opportunity Act. It does not matter what is your color, race, national origin, sex, marital status, age (as long as you are of legal age), or if your income comes from public assistance.
Thank you for reading this post and for passing it on to other good people who it may help.