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20 | M R EP O RT FEATURE SOMETIMES, IT'S GOOD TO BE A FOLLOWER. Follow MReport on social media to put the latest mortgage banking news, stories, strategies, and insights at the touch of your fingertips. MReport @TheMReportNews The MReport they accounted for 10.7% of all conventional loans. While FHA financing allows for lower down payment options, the loans can be more expensive. On top of requir- ing private mortgage insurance, Latinos paid an average of 90% more in closing costs for an FHA loan versus those of conventional loans, according to the report. Additionally, this segment of the U.S. population is overwhelm- ingly concentrated in the areas of the country with the most acute housing shortages. The lack of affordable housing inven- tory remains the No. 1 barrier to advancing sustainable Hispanic homeownership, according to the NAHREP report. The U.S. housing market is undersupplied by about 5.2 mil- lion single-family homes because of years of underbuilding since the 2008 financial crisis. However, supply chain issues are slowing down efforts to get new homes on the market. Homebuilders were facing headwinds even before the pandemic—mainly a lack of construction workers and a lack of available plots to build on—and the pandemic has only exacerbated those problems. The real estate industry lacks representation and a diversity re- flective of its consumer base, and Latinos remain the most under- invested demographic today. Now is the time to promote minority homeownership and find solu- tions for the barriers that exist today. There is a significant need to eliminate the racial inequalities that have plagued our communi- ties for generations. What steps should the in- dustry take to align its strategy and recruiting to these dramatic demographic shifts? My five recommendations (which include some ideas from the analysis) is that the administration and the industry need to work together to: 1. Improve and expand financial education and homeowner- ship preparation and increase the visibility, access, and types of down payment assistance programs. 2. Create loan programs similar to those from the Veterans Administration (VA) with 0% down payment for eligible borrowers. 3. Build culturally, racially, and ethnically diverse teams to more accurately represent the communities the mortgage lenders serve. 4. Reexamine how we qualify borrowers for mortgages and revamp the process to assess creditworthiness more precisely. 5. Implement programs that sustain homeownership for borrowers. Increasing the minority home- ownership rate can transform the financial well-being of millions of Americans and their future gen- erations. Data shows that Latino homeowners have 28 times the wealth as Latino renters—$171,900 versus $6,210. This is in line with Black homeowners' versus rent- ers' wealth too. In the current housing environment, it might be a good idea for loan officers to advise their borrowers to buy rental properties to increase their wealth because of expected rental growth. According to Urban. org, renter growth will be more than twice the pace of home- owner growth from 2020 to 2040. Between 2020 and 2040, there will be 9.3 million net new renter households, a 21% increase. The bottom line is that increas- ing purchase business for this growing demographic of buyers means that lenders and real estate professionals must educate Latinos about the value of homeowner- ship—not just as a roof over their heads but as a sound financial investment to build generational wealth. SHASHANK SHEKHAR is CEO of InstaMortgage.

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