Shekhar welcomed the move but said long-term solutions to a systemic problem could only be achieved at state and federal level.
He said: “That’s what’s going to move the needle if you’re trying to get three million more homeowners into the home, or get to 50-60% homeownership. You can’t meet aggressive goals by saying ‘OK, let’s train the lenders or the brokers with better counselling’.”
Industry data shows that the rate of Black homeownership has not only contracted in the last 50 years, but that the gap between White and Black American homeownership is worse than it was before the 1968 Fair Housing Act, which was introduced to create equal housing opportunities for minorities.
According to the Urban Institute’s figures for the first quarter of 2021, homeownership rates for Black households stand at 45.1%, compared with 73.8% among non-Hispanic White households, while data from real estate brokerage Redfin shows that almost 16% of Black Americans who applied for mortgages last year were rejected, compared with just 7% of White Americans. High debt and low credit scores were cited as some of the reasons for the discrepancy.
One solution mooted by Shekhar would be to introduce a program similar to the Veteran Administration loans, which are underwritten by the US Government. “I don’t expect private lenders to take that hit on their balance sheet, it’s the federal government that has to do it if (Black households) default,” he said.