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Mortgage Loans Available to Everybody... Unless You Are Black or Hispanic


According to data collected under the U.S. Home Mortgage Disclosure Act, the amount of loans being made to minorities is decreasing, while mortgage loans made to whites have increased. The big question is WHY?

Why is this happening?

The Home Mortgage Disclosure Act requires that information on race and income of all loan applicants be provided to the government by lenders. This helps to ensure that banks are treating everyone equally when it comes to lending. So, how can the banks justify the disparity in the amount of loans that are being made to minorities?

According to the data, mortgage loans to blacks fell from 5.1 percent in 2012 to 4.8 percent in 2013. This is a far cry from the 8.7 percent of mortgage loans made to blacks in 2006. Whites, on the other hand, represented 69.9 percent of mortgage borrowers in 2012 which increased to 70.2 percent in 2013.

The explanation

According to lenders, as the housing market recovers, they are giving mortgage loans to those with the strongest creditworthiness, leaving many minorities, who tend to have less savings and lower credit scores than whites, out in the cold.

Pressure from fair-lending advocates and civil-rights groups is forcing the U.S. Department of Housing and Urban Development (HUD) to re-evaluate what they can do to help minorities who have experienced credit problems that now prevent them from getting a mortgage loan. Minorities are not only missing out on owning a home but also in building the wealth that can come from home ownership equity.

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