Wells Fargo, rights group launch Latino homeownership plan
Wells Fargo and the Latino civil rights group UnidosUS are unveiling a multimillion-dollar plan to help four million Latinos buy homes by 2030.
Driving the news: Both will announce Wednesday they are kicking in $10 million each as part of a $100 million fundraising effort aimed at changing federal and local policies to make loans more accessible and provide counseling for Latinos seeking to become homeowners.
The big picture: The homeownership rate among Latinos reached 49.7% in the first quarter of 2023 but is about 25 percentage points lower than that of non-Hispanic white Americans, according to U.S. Census data. The rate had hit above 51% before the pandemic took off.
- Advocates say that low rate is a warning sign for the nation's financial future because the Latino population in the U.S. is projected to grow by 12 million every decade until 2060.
Zoom in: The $20 million kickstart funding will launch an initiative called HOME (Home Ownership Means Equity) to tackle the challenges many Latinos face in buying homes, UnidosUS and Wells Fargo will announce.
- The program seeks to create access to credit by pushing new lending rules who might not qualify currently.
- It will try to increase the housing supply by pressing for increased housing density through zoning reforms.
- The initiative also plans to increase the number of Spanish-speaking lenders, offer workshops on improving credit and provide downpayment assistance.
The HOME program's first cities include Chicago, Phoenix, Houston; Stockton, Calif., and Orlando, Fla.
- Those communities have large Latino populations and affordable housing compared to other cities.
What they're saying: "We've seen inequitable public policies and business practices that have really created significant (housing) barriers for our community," Janet Murguía, president and CEO of UnidosUS, told Axios.
- Murguía said those barriers include limited access to financial education, and predatory lending and systemic roadblocks for first-time buyers.
- "The biggest thing that's at stake... it's being able to level the playing field," Kristy Fercho, head of Diverse Segments/Representation/Inclusion at Wells Fargo, told Axios.
- Fercho said Wells Fargo wants to understand barriers impacting homeownership for Latinos and is dedicated to pushing for reforms.
The intrigue: The Latino housing plan is drawing support from some U.S. senators.
- "Breaking down barriers, increasing Latino leadership, and expanding opportunities will help create millions of new Latino homeowners over the next decade. Congress must play a leading role in making homeownership a reality," U.S. Sen. Ben Ray Luján, (D-N.M.) told Axios.
- Murguía, who will provide more details at a press conference later Wednesday, said the kickstart funding is a call to action to other lending institutions to help raise another $80 million.
Zoom out: A lack of retirement accounts, rising interest rates and a low housing supply pose risks to the building of long-term Latino wealth in the U.S., according to a 2022 report by The Hispanic Wealth Project.
- Only 25.5% of Latinos invest in retirement accounts, and their lack of diverse assets has worsened in recent years, the report found.
Yes, but: In 2020, Latinos spent $1.84 trillion, representing a consumption market larger than the economies of Canada or South Korea, a 2022 report released by the nonprofit Latino Donor Collaborative found.
Of note: Wells Fargo recently donated $25 million to UnidosUS and its affiliates for other programs. It says $10 million of that funding will go to the HOME program.