In commemoration of Black History Month, Freddie Mac's ARISE employee resource group invited all employees to a panel discussion on the company's commitment to affordable housing, particularly in the African American community. Panelists included Freddie Mac VP David Leopold, VP Adama Kah, Senior Director Edward Greene and Director Stacey M. Walker.
The panelists began by discussing the importance of homeownership in all communities, while recognizing that there is a gap between white and non–white homeownership rates. Data from the Joint Center for Housing Studies (JCHS) and Urban Institute (UI), shows that the homeownership rate in 2014 was 67 percent amongst white families, while African American families were at 34 percent.
According to the panelists, closing this divide is important for a variety of reasons.
"For most Americans, the majority of their wealth is in home equity," said Kah. "If you never get the access to get in and retain homeownership, you may not get to build up much wealth."
The panelists discussed ways that Freddie Mac is helping close this divide via programs including our Home Possible® mortgages that offer low down payment options for low– to moderate–income homebuyers, reducing one of the financial barriers that impede African American families from homeownership.
"Diversity is not just the right thing to do; Diversity is doing the right thing...I am proud of the work that we've done so far. As we continue to add more diverse talent to Freddie Mac, we will continue to be successful."
-VP Lisa Stone, co-chair of ARISE and panel facilitator
In 2016, the company also expanded its efforts to improve access to affordable credit and reach more qualified underserved borrowers through pilot programs with several of our lender customers and enhanced relationships with state Housing Finance Agencies. In 2016, the company's efforts at expanding access to affordable credit, especially for underserved borrowers, led to the highest percentage of funding for first–time home buyers versus others in ten years.
The panelists also discussed Freddie Mac's commitment to financing affordable rental properties. Lower–income households tend to spend a larger portion of their incomes on rent, leaving families with less to spend on other items, including food, clothing, education, health care and saving for a down payment on a home. On average, more than 90 percent of the apartments that Freddie Mac finances are affordable to moderate– and lower–income households, helping these families save money to take their first steps to homeownership.
"We really believe that education is key," said Walker. "Everyone can use homeownership education. You will learn a lot about the homebuying process and how to avoid traps. You will learn about credit and why credit is important in the homebuying process, and life in general."
Walker discussed the opening of the new Freddie Mac–sponsored Borrower Help Center in McComb, Mississippi – the first center in the Lower Mississippi Delta. The median household income of McComb is $29,720 and African American families make up 66% of its population according to the U.S. Census Bureau.
"Every day, we get to [use] the resources of Freddie Mac to help make it a little better," said Leopold. "Our job is to help overcome the barriers to provide better housing for everyone."