*Freddie Mac and Fannie Mae have unveiled plans to make it easier to buy a home and close the racial homeownership gap.
Currently in America, “72% of White Americans are homeowners while only 42% of Black Americans own a home,” per CNN Business.
Here’s more from the report:
The sweeping changes include down payment assistance, lower mortgage insurance premiums and a credit reporting system that factors in rent payment history. The enterprises are also expanding counseling services to support housing stability and plan to introduce technology that would improve access to credit and make home appraisals more equitable.
The plans are in response to the Federal Housing Finance Agency, which regulates Fannie and Freddie, that called on both companies to address discrimination in homeownership.
READ MORE: Advocates Backing Bill to Increase Homeownership for Black Californians
“We plan to partner with lenders, investors and other stakeholders to make meaningful progress towards an equitable housing finance system that provides access to wealth, opportunity, and a sense of home to people and communities across the United States,” said Michael Hutchins, president of Freddie Mac.
Per the report, the plan outlines Fannie and Freddie’s commitment to “sustainable approaches that will meaningfully address the racial and ethnic disparities in homeownership and wealth that have persisted for generations,” said Sandra L. Thompson, acting director of FHFA.
“We at Fannie Mae believe this racist legacy is one of the root causes of economic disparity in our country,” wrote Jeffery Hayward, Fannie Mae’s executive vice president and chief administrative officer, in a blog post. “To ignore this — to pretend that our history does not affect our country’s present and future — is not only wrong, it’s also economically destructive.”
Per Fannie Mae’s website: “The Plan includes efforts to enhance homebuyer education, pilot programs to improve credit scores and to explore security deposit alternatives as well as the creation of Special Purpose Credit Programs (SPCPs) to serve specific areas of need and opportunity, such as down payment assistance.”
“We want to knock down these barriers, one by one, doing our part to undo the legacy of discriminatory practices that perpetuate racial housing gaps in America,” said David C. Benson, president and interim chief executive officer at Fannie Mae. “The plan is a solid step toward this goal and a milestone in our work to make housing stronger, fairer, and more sustainable for the people and communities we serve.”
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