A special purpose credit programme for potential Black borrowers has been introduced by Ben Slayton's Legacy Home Loans, the largest Black-led mortgage banking company in the nation, in six locations throughout the nation.
Launch of the SPCP by Legacy Home Loans for Black Borrowers
The SPCP, sometimes known as "closing the gap," allows a 1% down payment with free closing cost assistance, a free appraisal, a free home warranty package, and free homebuyer counselling. In Atlanta, Baltimore, Chicago, Detroit, Memphis, and Philadelphia, the SPCP lending programme will be tested. Borrowers must now reside in one of the six cities' census tracts with a Black population of at least 51%.
The lending programme applies credit standards based on things like on-time payments of rent, utilities, phone, and auto insurance. The underwriting standards take the borrower's income into account and require a minimum credit score of 620.
Slayton, who was the first Black Realtor to be licenced in the United States and has over 50 years of experience in the mortgage industry, cautioned, "Don't be fooled, Legacy Home Loans is where you are recognised not just tolerated. There may be others coming out with similar SPCP lending schemes.
Department of Housing and Urban Development
Mortgage lenders have just recently felt confident implementing special purpose credit schemes. The Fair Housing Act has long dissuaded creditors from such programmes, but the Department of Housing and Urban Development issued guidance in December stating that SPCPs would not be in violation of the law.
Several months later, a statement encouraging lenders to create SPCPs was released by seven federal agencies, including the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, the Department of Housing and Urban Development, the Department of Justice, and the Federal Housing Finance Agency.
Legacy mentioned the 30% homeownership difference between Blacks and Whites in a news release.
In order to help Fannie Mae and Freddie Mac address the racial homeownership gap, the government-sponsored companies released fair housing finance strategies in June.
