people walking down residential street

Findings

WHAT WE'VE LEARNED

The number of Black homeowner households in New York City has declined over the past 20 years.

Unsustainable and sometimes predatory mortgage practices in the early 2000s gave way to the foreclosure crisis and constrained mortgage access of the 2010s. In recent years, skyrocketing prices and high credit score requirements have made it difficult for Black families to buy a home and for Black homeowners to refinance and fund repairs. The result is a decrease in Black homeowners.

Black homebuyers pay more to buy a home, paying greater closing costs and higher interest rates than White buyers.

On average, Black homebuyers paid $7,000 more in closing costs than White homebuyers in New York City. That discrepancy cannot be explained by differences in lending products; the pattern holds true among both conventional mortgage borrowers and those with Federal Housing Administration (FHA) mortgage loans (federally-insured loans originated by approved lenders).

Because of the racial wealth gap, Black home buyers also have lower starting down payments, on average, when they purchase. That, in combination with higher closing costs, means Black home buyers begin homeownership with considerably fewer financial assets than homeowners of other races.

The disproportionate use of the Center's services — geared toward preventing foreclosures and addressing threats to stable homeownership for low- and moderate-income families — by Black homeowners demonstrates the challenges this population faces.

Though Black homeowners make up only 18% of homeowners in the city, they make up more than 60% of the Center's clients.

More than half of homeowners with tenants who called the Center's Homeowner Hub hotline were Black.

More than 90% of Black RTAPP clients were in future "AE" flood zones. This means that their home has a 26% chance of flooding over the life of a 30-year mortgage and their flood rates may increase.

WHAT WE HEARD

From Black homeowners

Financing home repairs continues to be a leading challenge for homeowners.

Eighty percent of the homeowners we interviewed cited home repairs as one of their major challenges. They also said they had faced unexpected repair needs when they moved in, and wished they had done more thorough home inspections before buying. Finally, they said they struggled to find reliable contractors to do repairs.

Homeowner-landlords need more support managing their tenants.

While the homeowners we spoke to said tenant income was crucial to paying their mortgages, they also said they struggled to find and manage their tenants and rental units. Homeowners spoke about non-paying tenants, issues with City and federal vouchers, and with damage to their units.

Many homeowners wished they'd had more education about purchasing and maintaining their home.

Even homeowners who attended pre-purchase classes wanted more guidance, particularly about different kinds of financial products. Homeowners also wished they had known more about housing expenses aside from their mortgage payments, such as property taxes.

Female buyers perceived more discrimination than other homeowners.

While most of the homeowners we interviewed did not share that they had experienced discrimination because they were Black, many female homeowners said they found it difficult to work with brokers, contractors, or real estate professionals because they were women.

From pre-purchase counselors working with Black prospective buyers

New York City has a lack of affordable supply.

While pre-purchase counseling classes continue to be popular, counselors say very few homeowners are able to purchase because of the city's high prices.

Many homebuyers are unable to buy in their neighborhoods.

Counselors shared that successful home buyers often had to go outside their neighborhoods to find a home they could afford.

More and easier-to-use down payment assistance is needed.

Pre-purchase counselors try to match homebuyers with as many grants as possible, but their attempts are frustrated by limited funding for existing programs and varying eligibility and documentation requirements.

Discrimination exists, but is hard to track.

Counselors spoke about discrimination in the entire system and highlighted issues with transparency in applications for purchasing co-op units.

From community partners

Programs are successful when different intervention types are combined.

For example, a matched savings program would work well in combination with a down payment assistance program or a financial literacy program.

Partnerships with community organizations are important in making programs successful.

Strategically partnering with trusted community and culturally-specific organizations improves outreach to households that need it most and fosters trust in the process.

Skepticism of banking and financial institutions remains high among some groups.

Low-income and minority households are skeptical of new financial products because of previous experiences with scams or predatory lending.

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