KCRG, May 24, 2022, The Black homeownership gap in Cedar Rapids
According to the 2020 National Community Reinvestment Coalition Home Mortgage Report, home loan originations to majority-minority neighborhoods declined to 18.5% in that year from 19.1% just two years prior.
According to the NCRC report data, a significant percentage of loan paperwork has lacked race and ethnicity data since 2018. This vital information, which ensures the loan process is fair and nondiscriminatory, has been lacking in about 15% of all applications since 2018—and is missing for 75% of all purchased loans reviewed by the NCRC. And, when looking at the top loan purchasers, 15 out of 20 reported race and ethnicity data on 0% of their purchased loans, according to the report.
This significant gap in homeownership is due in part to issues with the private mortgage lending industry, which struggles to serve the needs of many households of color, according to the NCRC.
The report also indicates both the private mortgage market and the laws that were intended to expand access to credit have been unable to help achieve equitable homeownership rates in Black communities. The fact that many people of color live in credit deserts is also compounding the issue with the homeownership gap, according to a HUD article published in March 2021. These areas offer little access to mainstream credit, which results in low or absent credit scores for residents—making it incredibly difficult to enter into the homeownership arena.
