Taking on the challenges for Hispanic homebuying amid COVID-19
Hispanics led the U.S. out of the Great Recession, but may face stronger headwinds in the COVID-19 crisis. Wells Fargo advances its commitment to Hispanic homeownership.
Nota del editor: También está disponible una versión en español de esta historia.
In recent years, boosted by a population boom and rising corps of younger earners, Hispanics have chipped away at the historic wealth and homeownership gaps compared to white, non-Hispanic Americans, industry researchers say.
The growth in Hispanic homeownership gives housing industry leaders hope that Hispanics can lead the U.S. housing market out of the COVID-19 recession, as they did after the Great Recession more than a decade ago.
But the obstacles are more formidable this time, as Hispanics have been hit hard by the pandemic itself and its economic fallout, according to a report by the Urban Institute think tank. Among the biggest obstacles are soaring unemployment, major job losses, rising debt-to-income levels, and more expensive mortgages as a result of lower down payments, according to the think tank.
‘To make ambitious goals a reality’
Despite the pandemic, many Hispanics have risen to the challenge, according the National Association of Hispanic Real Estate Professionals’ latest State of Hispanic Wealth Report. Among its findings: Hispanics are leading a boom in first-time and millennial homebuying; 40% of Latinos expect to own a home in the next five years; and Latinos are 25% more likely than non-Hispanic whites to own investment property.
For Wells Fargo, Hispanics continue to be a vital segment as the fastest growing part of the U.S. housing market. In 2015, the company set a 10-year goal to boost Hispanic home lending by $125 billion and to invest $10 million in homebuyer counseling/education. It announced the plan as part of National Hispanic Heritage Month and the Hispanic Wealth Project.
“From forbearance education and outreach to flexible mortgage financing options, we are working to support homeownership in the Hispanic community during these challenging times,” said Rita Ventresca, head of strategy and homeownership growth for Wells Fargo Home Lending. “We continue to work every day across Wells Fargo and with industry partners on how to make these ambitious goals a reality.”
Wells Fargo has helped 163,497 Hispanic families become homeowners through $41.3 billion in funding since it launched the Hispanic commitment in 2016, according to data through 2019. It has also invested $7.5 million in education and counseling, and provided more than 1,200 grants to UnidosUS and other nonprofits that helped sustain housing for more than 100,000 renters and homeowners in need.
The front lines of COVID-19 and homebuying
For Ismel Fernandez, Wells Fargo’s outreach to Hispanics made a life-changing difference. Less than 10 years after his family emigrated from Cuba, Fernandez found himself working on the front lines of America’s COVID-19 crisis. The trauma nurse in Miami has cared for many patients affected by and dying from the coronavirus — an unforgettable experience, he said.
As the crisis hit, Fernandez was also on the verge of buying his first home — a process the Wells Fargo customer navigated with the help of Home Mortgage Consultant Luis Sevilla. Fernandez took on multiple jobs while saving for a down payment and studying for his nursing degree. In June, he closed on a two-bedroom townhouse in South Florida.
“When I signed the papers to close, I thought to myself, ‘Wow, that’s it. I’m a homeowner!’ It was an amazing feeling,” he said. “With the knowledge and help of good advisors, realtors, and bankers, everything went so smoothly. I couldn’t have done better.”
Fernandez credited Sevilla with paving the way for him. According to Sevilla, however, Fernandez was the one who ultimately made it happen.
“One day, he called me and said he was ready,” Sevilla recalled. “At that point, he had not only paid down his liabilities, he almost paid off his car and most of his student loans. Indeed, he was ready. In the end, he demonstrated that with tenacity and commitment, you can focus on your priorities and get great things done even in these difficult times.”