Although recent reports of lenders denying mortgages to Black applicants more than white applicants have spread like wildfire, this isn’t a new phenomenon. Redlining has been around for generations, and unfortunately, its effects still echo through Black household today.
LEGACY Home Loans, the largest Black Led mortgage banking firm in the nation, is aiming to reverse that sordid history.
In a news release, it was announced they’d launched their “Special Purpose Credit Program” (SPCP) for Black people who want to become homeowners.
“That’s right this loan program was developed by Black Mortgage Professionals for Black Borrowers,” Legacy Home Loans CEO & President Ben Slayton said in the news release.
It’s their aim to close the 30% racial homeownership gap by piloting the loan program in six (6) U.S. cities with large Black populations (51%). They include Atlanta, Baltimore, Chicago, Detroit, Memphis, and Philadelphia.
To qualify, borrowers must presently reside in the aforementioned cities and have a minimum credit score of 620, but they are not restricted on where they can purchase their new home.
“There may be others coming out with similar SPCP loan programs, but don’t
According to the company, the loan program specifically for Black borrowers that offers 1% down payment, free appraisal, free home warranties program, and no-cost pre-purchase home-buying counseling.
The program comes at a time when mortgage loan rates for new buyers are sky-high. Bankrate reports that the average rate on 30-year mortgages rose to 6.02 percent this week from 5.78 percent the previous week. This is the highest it’s been in more than 10 years. This is coupled with the increasingly discriminatory practices against Black borrowers, including lower appraisals due to seemed cultural bias and more rejected loan applications.
Legacy hopes their program will counteract damaging practices and bolster the Black economic ecosystem.