Asset Building for Immigrant Communities through Affordable and Sustainable Homeownership
Homeownership is one of the most important ways that Americans create financial security and build wealth, which are critical to a family’s financial well-being and quality of life. According to the Federal Reserve’s 2016 Survey of Consumer Finances, the median net worth of a homeowner is $231,400 compared to $5,200 for renters, barely two percent of the homeowner’s wealth. Federal Reserve data tell us that the typical white household owns 10 times the wealth of a Latino household and researchers at Brandeis University found homeownership was the most important factor explaining the racial wealth gap. Homewise serves an economically distressed population who are mostly low-income living in the greater Santa Fe and Albuquerque areas of New Mexico. The majority of our clients identify as Latino (69 percent of households) and 42 percent are members of foreign-born households.
Many families, especially those in the immigrant and Spanish-speaking population, face obstacles that lock them out of the long-term economic benefits of homeownership. Homewise addresses these obstacles through a two-pronged strategy that combines Spanish-speaking financial capability and homebuyer education with access to affordable capital through our unique New American Mortgage Lending Program.
Advancing Family Financial Capability: Financial Capability and Homebuyer Education
There is a high need for quality financial capability and homebuyer education serving the Spanish-speaking and immigrant populations to enable individuals and families to achieve their financial and homeownership goals. Homewise offers these courses for free to help underserved clients manage money, reduce debt, repair credit, and build savings in order to build long-term financial wellbeing. Our curriculum is aligned with the comprehensive Homewise homeownership process, which also includes non-commissioned real estate services, affordable mortgage lending and down payment assistance, refinance and home improvement lending, high-quality energy-efficient home building and disinvested property rehabilitation, to support clients on an affordable and sustainable path to successful homeownership.
Through this program, over the last three years we helped an average of 51 immigrant households per year who had no traditional credit history to establish a credit profile. And for immigrant clients who came to us with financial obstacles and went on to achieve homeownership, they increased their credit score by an average of 83 points, decreased monthly debt by $171, and increased savings by $5,151. These results are a testament to the power of financial capability and homebuyer education as a tool for making measurable impact on family assets and building financial resilience and stability.
Access to Affordable Mortgage Lending Capital: New American Mortgage Lending Program
Many immigrants do not have a Social Security number and most have limited credit history, which often disqualifies them from obtaining an affordable mortgage loan. In many cases the only creditors who will lend to borrowers without a Social Security number are those with products offering high interest rates and unfavorable terms. And research shows that particularly during the subprime lending boom, risky and predatory loans were made to minority borrowers at a far higher rate than to similar white borrowers. This has led to a general cycle of families being locked out of an affordable and accessible path to homeownership. Homewise is interrupting this cycle by making it easier for people to buy a home and build assets by unlocking access to affordable mortgage lending capital. The New American Mortgage Lending Program offers a competitive, fixed-rate 30-year mortgage for clients with an ITIN (Individual Tax Identification number) instead of a Social Security number.
Since 2014, Homewise has made 724 loans totaling over $57,101,474 to 403 new homeowners through the New American Lending program without a single defaulted loan, proving that offering affordable, responsible financing coupled with focused, high quality financial capability education can result in a high-quality loan portfolio.
How Can You Help?
The Homewise Community Investment Fund offers an impact investment opportunity for investors seeking to bridge the gap between social impact and their investment portfolio. Investments in the Fund offer a source of capital for Homewise and can be targeted to support the New American Mortgage Lending program, helping to break down barriers to homeownership for this underserved population. With a minimum investment of $1,000, investors can select a term of one to 15 years with corresponding interest rate returns of one to four percent, dependent upon the term. Learn more about the Homewise Community Investment Fund.
Homewise is a New Mexico-based nonprofit Community Development Financial Institution (CDFI) founded in 1986. Our mission is to help create successful homeowners and strengthen neighborhoods so that individuals and families can improve their long-term financial wellbeing and quality of life. Our services include financial literacy education and coaching, real estate services, affordable mortgage lending and down payment assistance, loan servicing, refinance and home improvement lending. We strengthen neighborhoods by increasing homeownership through real estate development, property rehabilitation, and revitalizing communities to benefit existing residents. Since Homewise was founded in 1986, over 17,000 New Mexicans have attended our financial capability and homebuyer education workshops. During that time, we’ve helped over 5,600 New Mexicans purchase homes, over 2,300 make energy efficient home improvements, and more than 800 refinance their mortgages. We’ve also built over 800 high quality, energy efficient and affordable homes. To learn more, visit the Homewise website.
Article by Laura Altomare, Chief Communications Officer at Homewise. Laura leads the organization in developing and implementing marketing and communication strategies, is responsible for securing grant and impact investment funding, and oversees the organizations human resources functions. Ms. Altomare earned a B.A. from Colorado State University.
Homewise Community Investment Fund Notes are offered to both individual and institutional investors who reside in states in which our Notes are registered or exempt from registration. This currently includes: Alaska, New Mexico, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Massachusetts, Mississippi, New Jersey, New York, Rhode Island, Texas, Utah, Vermont, Washington, West Virginia, Wyoming. This notice is not an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any state in which such offer, solicitation, or sale is not authorized. The offering is made solely by the Prospectus, which more fully describes certain risks involved in a purchase of securities. The securities are not FDIC or SIPC insured, are not bank deposits, and are not guaranteed by any federal agency.