In 2023, there were more than 9.5 million Latino homeowners in the United States, according to a report by the National Association of Hispanic Real Estate Professionals®. In other words, about half of Latinos in the U.S. own their homes. In Chicago, that figure stood at around 43% in 2017, nonprofit Prosperity Now reported.
While the national rate of Latino homeownership is trending upward, barriers remain. High interest rates, lack of conventional financing options for people without Social Security numbers, and high rates of mortgage denials all make it harder for Latinos to achieve homeownership, according to NAHREP.
Michelle Flores, executive secretary of the Chicago chapter of NAHREP, said Latinos — especially those who are undocumented immigrants — may face unique challenges to homeownership, including language barriers, limited access to credit and difficulty obtaining home loans. In her roles at NAHREP and as a Realtor, she works to boost sustainable Hispanic homeownership. It starts by providing bilingual services and education to her clients. Austin Weekly News spoke with Flores about the hurdles Latino homebuyers are facing, and the community resources available to overcome them.
What are some of the barriers to achieving sustainable Hispanic homeownership?
It is a little more difficult to obtain home loans than it would be for someone who is not of the Hispanic background and actually, anyone who is an immigrant — which, a lot of the immigrants that we come across are mostly Latino, or Hispanic. And so most of my buyer pipeline, or even some of my seller pipeline, are either immigrants or their families are first-generation immigrants. On the buyer side, some of the barriers that they encounter is being able to be approved for a home loan. When they don’t have status, they don’t have a Social Security number, they don’t have a line of credit. They can’t qualify for traditional home loans like FHA, conventional, and they don’t qualify for downpayment assistance.
Luckily for myself, I was born and raised here in Chicago, so I’m grateful that I don’t have that issue. But my clients do, my sphere does. Nationally, we are advocating for immigration reform as part of our public policy.
Another barrier is access to credit. Many don’t have access to credit — whether it’s because they don’t have a Social Security Number or, even if they do as residents or citizens, they haven’t obtained a credit card or a car loan to establish their credit. Yet they work, they have a steady, stable income, they’ve been paying rent somewhere for the past two or 10, 15, 20 years, but they’ve just never established credit.
So it’s [establishing] different ways of viewing credit and different ways of viewing cash flow. Some of our Hispanic families are 1099’ers versus W-2’ers. So that income is different — how we utilize that or we look at it on the credit side or on the income side for qualifications is different from how we would look at somebody who has a W-2.
Language is another barrier. I can only speak for my Latino community, the majority of my clientele. But I know from common sense that another language barrier is not just Spanish. All of the legal documentation in real estate is in English, locally and nationally. Even in real estate classes to become a Realtor, everything is in English. So we see it on the professional side just as much as the buyers and sellers see it on the buy and sell side. The only way around that that I’ve seen and I’ve been able to help, to a certain extent, is finding bilingual professionals. Ensure that your lender, attorney, inspectors and anyone that you’re working with is bilingual and speaks the language you speak and the language that everything else is written in.
What resources are available to undocumented folks interested in buying a home?
Everyone has the same access to resources as far as getting education on the home-buying process. Who you work with matters.
There are different government agencies locally that help with education on the home-buying process. Neighborhood Housing Services of Chicago, LUCHA, Spanish Coalition for Housing — all these different government agencies help homebuyers with education, the buying process and getting their credit ready.
There’s also an opportunity when speaking to lenders. I would highly recommend not going to the bigger box lenders because they’re not going to be set up to help non-Social Security holders. Most of these bigger box companies are not equipped to give loans to borrowers without a Social Security number. Ask different lenders and organizations that are not bigger box banks if they offer ITIN loans and how to qualify for them.
For ITIN borrowers, it’s a matter of finding a lender that’s going to provide a loan product for you and evaluating what it’s going to cost you. Unfortunately, that’s another issue. Lenders don’t have a ton of products and ITIN loans are pretty standard -– with fairly higher interest rates and down payments than a traditional FHA or conventional loan. Usually, there’s no downpayment assistance.
It’s all about getting educated. And where do you get the education? In your communities. It’s a matter of, how do people access these things? Or how do people find out about them? What are (organizations) putting out there? What are you able to share with the community within your reach?
What advice do you have for undocumented folks interested in becoming a homeowner?
I speak from my personal perspective. I believe that everybody has the opportunity to purchase a home, whether you just got here, whether you’ve been here 20 years, or whether you were born and raised here. How we get you into that house might take some time, depending on your status here, sadly. For those who have been here, or who were born and raised here, it might be a little quicker and easier than for those who just arrived. My recommendation is, first and foremost, to find someone you can trust to work with. Find someone to guide you through the process — whether it’s a realtor, a lender, or a government agency, whoever it is.
Don’t be afraid to ask for help. Most people are just afraid to ask for help, but a closed mouth doesn’t get fed, so you have to ask for help. You have to show up to these different organizations, walk into a real estate brokerage and say, ‘Hey, I want to buy a house’. If that first broker just says, ‘Hey, we can’t help you, because of XYZ’ and they don’t give you a plan, then you need to walk into another brokerage office.
There’s always a plan, there’s always something that you can do, whether it means that you’re going to need a year or two, or three, or it’s only going to take three to six months — there’s always a plan in place, it’s just a matter of following the plan to get ready to purchase when the time is right.
What’s the importance of homeownership?
Oh, man. Where do I start? The short answer is building wealth over time. I hear it all the time and I preach it all the time.
It’s wealth building, it’s being able to say, ‘I own this property, I can do what I want with it,’ to a certain extent. If you decide to sell it, you’re going to make money on it; it’s going to have equity over the years that can be used to buy another property or a car. Even without selling, if you own a home, ou’ve gained some equity in it after three to five years, you can refinance that property and pull out cash to pay off debt, purchase a new car or other properties.
My parents have owned their properties my whole life, so I’ve always been exposed to the benefits of homeownership. I could use my own yard, have parties without having to ask anyone for permission, have pets if I wanted to have one and paint my room, and do all these different things. When you’re renting, you have to ask for permission for all of the above.
What should renters who are considering homeownership know?
First things first, if you don’t have credit, establish credit. The higher your score, the better it is for you, whether it’s for your interest rate, your mortgage insurance, or qualifying for different programs. The higher your credit score, the more programs you qualify for. Use that credit wisely.
Besides credit, save your money. Everybody’s going to need money during the buying process, whether or not they qualify for assistance programs.
Even if you don’t use any of that money for down payment or closing it’s good advice to have money saved up. Stuff happens all the time — the water faucet breaks or the water main breaks or the heat goes bad. You want to have money to make repairs. As a homeowner, there are benefits of having a home — equity and freedom. But you also have a responsibility to make repairs. There’s no landlord to call to come in and fix things.
