The Fannie Mae Foundation this week reported a surge in optimism among blacks and Hispanics about their prospects for homeownership.
Among 752 African-Americans and 751 Hispanics surveyed for the foundation this year, the percentage who said they were at least somewhat confident their income and credit records would qualify them for mortgages has surged to 74%, from 49% in 1996.
Nearly half of African-Americans surveyed and just over one-third of Hispanics said they perceive special obstacles because of their racial and ethnic backgrounds, the foundation said. But the perception that minorities suffer from discrimination "all or most of the time" has fallen by one-third among both groups, the foundation said.
With the nation's homeownership rate among whites about as high as it can get, at about 75%, mortgage trade groups have identified minority borrowers as a growth market for the industry. The foundation said the results foreshadow rising homeownership rates for America's two largest minority groups.
The results were greeted with cynicism by Bruce Marks, executive director of Union Neighborhood Assistance Corp., a community activist group in Boston. He agreed that optimism is on the rise, but added, "The major roadblock to homeownership is the lack of savings, and Fannie Mae continues to require substantial down payments and closing costs" on the loans it buys from lenders.
Mr. Marks said such banks as NationsBank Corp., First Union Corp., Fleet Financial Group, and BankAmerica Corp. "are doing much more portfolio lending on criteria that Fannie Mae won't purchase." The optimism "is a result of community-based organizations getting banks to liberalize their underwriting and do more outreach," Mr. Marks said.
According to the survey, coming up with the down payment and closing costs is the No. 1 obstacle to homeownership, cited by 62% of African- Americans and 65% of Hispanics. That was down from 88% and 85% in 1993, however.
A spokesman for Fannie Mae said the down payment obstacle is one "the corporation has systematically moved to address," and that the company's efforts have led to wider acceptance of low-down-payment loans.
He said Fannie Mae introduced a program in 1991 in which it would buy loans with a 5% down payment, provided the homeowner paid at least 3%. It initiated a pilot program in 1996 in which Fannie would buy loans with a down payment of 3%, even if the entire down payment was in the form of a gift or grant, the spokesman added.
He said the company recently announced it was halfway to its goal of providing $1 trillion in home loans to minority members and people in inner cities and other disadvantaged areas.
A spokeswoman for the Fannie Mae Foundation said that although it is supported by Fannie Mae, it conducts its programs separately. She said the research was performed by Hart-Riehle-Hartwig Research and that the foundation's educational program has included joint ventures with Black Entertainment Television and Univision, as well as multi-lingual homebuying fairs.
The survey noted a need for further education: Just over one-third of the respondents said they believe a down payment of at least 20% of the value of the home is needed to become a homeowner.
