Research Indicates Affordable Homeownership Programs May Help Close the Minority Homeownership Gap in Ohio

Research Indicates Affordable Homeownership Programs May Help Close the Minority Homeownership Gap in Ohio

Ohio Housing Finance Agency Utilizes Research to Address the Homeownership Gap among Ohio’s Minority Homebuyers

By Doug Garver
Executive Director
Ohio Housing Finance Agency

The Ohio Housing Finance Agency (OHFA) has partnered with The Ohio State University’s John Glenn School of Public Affairs to conduct research on critical issues and trends impacting the affordable housing industry. The newly launched Office of Affordable Housing Research (OAHR) released Closing the Gap: Minority Low-Moderate Income First-Time Homebuyers and Neighborhoods, a report which examines Ohio’s affordable homeownership program to further understand mobility patterns and neighborhood quality of low-income non-minority and minority purchasers.
When affordable and sustainable, homeownership provides economic and social benefits, an opportunity to build wealth, and can increase neighborhood stability in Ohio communities. However, there have been and continue to be substantial gaps in homeownership rates between minority and non-minority households. According to the U.S. Census Bureau, in 2007, the homeownership rate for non-minority households was 75 percent, compared with less than 50 percent for Black and Hispanic households. In the 1990s and early 2000s subprime lending temporarily reduced this inequality. However, with one in four subprime loans delinquent in the final quarter of 2009, these unaffordable lending strategies have only exacerbated the homeownership gap, as minority homeowners have been disproportionally affected by the subprime loan industry.
Closing the Gap presents analyses of statewide data from OHFA’s First-Time Homebuyer Program nested with Home Mortgage Disclosure (HMDA) and U.S. Census data. Results suggest that nearly one in five households purchasing their first home through OHFA’s First-Time Homebuyer Program were minority borrowers, compared with approximately one in ten overall home purchases in Ohio last year, suggesting considerable progress towards closing the gap. This report also highlights the geographical representation of OHFA’s mortgage products and the mobility patterns of low-to moderate-income households as they enter homeownership for the first time, identifying areas for future opportunities to reach out to underserved populations with affordable mortgages.
OHFA’s First-Time Homebuyer program offers down payment assistance -- reducing the out-of-pocket expenses associated with buying a home -- allowing borrowers to save for future mortgage payments. In addition to down payment assistance, OHFA provides 30-year fixed mortgage loans at a competitive interest rate which makes homeownership more affordable and sustainable over time than other mortgage products. ...