Lender Training Targets Minority Homebuyers

Sioux Falls Mayor Munson

Fannie Mae's Rita Edwards

The Department of Housing and Urban Development (HUD), Fannie Mae, the Multi Cultural Center (MCC), Sioux Empire Housing Partnership (SEHP) and the Housing Resource Center (HRC) co-sponsored a training session for lenders in an effort to increase minority homeownership in South Dakota. The training included presentations from each group, question and answer sessions, and practical guides on how to deal with unique situations.

The minority population in Sioux Falls increased 173% from 1990 to 2000 according to the US Census. The immigrant and refugee population in Sioux Falls is estimated at over 11,000. Many minority families want to purchase homes, but often find it difficult because of language and cultural barriers. Lenders want to assist minority families become homeowners, but find it difficultbecause of barriers and unique situations.

One of the more obvious barriers is language. The Sioux Falls population has representation from 67 different countries, which includes 65 different languages and dialects. Lack of credit and banking history is another barrier. Many people from other countries do not trust banks, paying for everything with cash. Having no credit history or bank account records creates difficult underwriting challenges.

Sioux Falls Mayor Dave Munson opened the training session by commending the co-sponsors and the lenders for participating. He recognized the importance of the minority and refugee population in Sioux Falls, noted that they are a vital part of the community, and believes it is important to offer them the opportunity to become homeowners.

Joyce Beachy, Underwriting Branch Chief for the HUD Home Ownership Center in Denver provided guidance on a variety of issues that lenders face when underwriting FHA loans for minorities. She highlighted documentation required for non-citizens to be eligible for FHA loans, closing costs, effective income, and provided actual examples of issues lenders have encountered in the past.

A panel of homebuyer education providers discussed their programs and the services they offer. Executive Director of the MCC, Qadir Aware, talked about the diversity in Sioux Falls and differences in customs. MCC offers translation services in many different languages. Mr. Aware speaks five languages fluently and can provide translation contacts for many languages. He encouraged lenders to call if they have questions or need assistance.

HRC representative Jill Funke talked about their homebuyer education program. They provide classes throughout the year at varying days and times to accommodate as many buyers as possible. Through their parent organization, Lutheran Social Services, they offer interpreter services in many languages and consumer credit counseling services. HRC primarily conducts group-training sessions, but will also do one-on-one sessions as needed.

The SEHP was created as a result of a task force formed by the Chamber of Commerce. They identified four barriers to affordable homeownership: 1) availability, 2) down payment and closing costs, 3) education, and 4) credit. Executive Director Jim Schmidt said their organization provides one-on-one homebuyer education. They work with families to prepare them to become homeowners. They are branching out to offer the same homebuyer education services to the Hispanic community.

Senior Deputy Director of the South Dakota Fannie Mae Partnership Office, Rita Edwards concluded the session by talking about their National Minority Homeownership Initiative. Their Immigrant Initiative offers flexibilities to serve immigrant families to include a flexible source of funds for closing and lower borrower contributions.

Find out more about homebuying in South Dakota at http://www.hud.gov.

Jim Schmidt SEHP, Qadir Aware MCC, Jill Funke HRC

Content Archived: April 5, 2011