Report Highlights Chicago's Racial Home Ownership Gap, Offers Solutions

Woodstock Institute calls on lenders to take action on policy recommendations

A new report released by the Woodstock Institute highlights a clear racial homeownership gap and offers policy recommendations the Institute says will help close that gap.

The release of the report follows news reporting from 2020 that indicated lenders had originated more mortgages in a single White neighborhood of Chicago than all Black neighborhoods combined.

“The fact that a low-income White borrower has a better chance of being approved for a mortgage loan than a high-income Black borrower means something’s broken. We can’t identify what that is without calling in these financial actors and giving them the space and comfort to re-imagine the mortgage process. And we can’t address the systemic forces preventing more people of color from purchasing homes and building wealth without the solution benefiting everyone,” said Horacio Méndez, President & CEO of the Woodstock Institute. “Our goal is to collaborate on solutions that prioritize the needs of borrowers of color while also removing the limitations faced by lenders that just don’t make sense.”

In addition to highlighting the homeownership disparity, the report offers a number of potential banking policy solutions, including offering an equitable mortgage product, ensuring borrowers are offered the most affordable option that they qualify for, and reforming some internal practices at banks to better serve borrowers of color.

“This report contains real solutions to address the racial homeownership gap. We are calling on the FHFA, Fannie Mae, Freddie Mac, banks, and-non bank lenders to help us make these solutions a reality,” said Anthony Simpkins, President and CEO of NHS Chicago. “There are millions of Black and Brown families ready to become homeowners today, and they deserve access to better loan products that don’t penalize them for the color of their skin.”

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