Covid has exacerbated financial challenges facing Black homeowners looking to buy a home in New York City, according to a new report.
The Center for NYC Neighborhoods said the average Black homeowner pays $7,000 more in closing costs than white buyers, and they face higher interest rates. The findings are based on a survey of homeowners and housing counselors that began in 2019, reported City Limits.
Overall, Black homeownership in the city dropped 13 percent over the last two decades, and it slid further during the pandemic.
The report found the pattern of higher costs was present for conventional mortgages and with Federal Housing Administration (FHA) mortgage loans, which are available to buyers with lower credit scores.
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“We know that people that use FHA loans are probably going to pay more because by definition an FHA loan is more expensive. But we were surprised to see that the pattern also held with conventional loans,” Ivy Perez, a policy and research manager for the Center for NYC Neighborhoods, told City Limits.
The Center attributed the drop in Black homeownership to systemic issues, along with fallout from the 2008 foreclosure crisis. According to the report, 80 percent of Black homeowners surveyed had trouble paying for home repairs and finding trustworthy contractors.
Based on research results, the Center came up with five pilot programs to address some of the challenges, including a down payment assistance tool and aid to mom-and-pop landlords to preserve affordable rentals.
[City Limits] — E.B. Solomont