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BUYING

The Latino homeowning journey

This researched Housing Journey identifies distinct obstacles that may affect Latino consumers throughout their homeownership experience. You’ll also be able to learn about solutions we’re creating to help address these barriers every step of the way.

mother and daughter water flowers outside home

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STEP 1
Housing Preparation

Preparing to buy a home

Before you can begin looking for a home, you need to be in a financial and personal position to begin the search. Latino potential homebuyers often face personal and financial barriers that white homebuyers do not.

Challenges

Nearly one in four Latino homeowner households

lost their homes to foreclosure from 2007 to 2013.

 
Predatory lending practices & housing trauma

Latino homeowners experienced the highest rates of foreclosure during the financial crisis. As a result of this or other housing trauma, they may have doubts about purchasing a home.

Reid, et al., 2017

Language barriers and immigration status are major obstacles to accessing resources

such as homeless services and federal housing assistance.*

*Based on a case study of Hispanic families in Philadelphia, PA
Obstacles to assistance access

Other challenges include mistrust outside the Hispanic community and fears of deportation and public charge (penalization of immigrants for using public benefits).

Aiken, Reina, and Culhane, 2021

Fannie Mae actions

  • Expanded Financial Capability Coaching & HUD-approved counseling
  • HomeView® (available in English and Spanish)

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STEP 2
Buying

Finding and buying a home

You’ll need to search for a home, put in an offer and get a home loan, and close on your loan. Throughout this process, Latino homebuyers can more often face language barriers and find themselves confronted with challenges and bias that white buyers may not.

Challenges

$379
in additional closing costs
 
Hispanic consumers pay proportionally larger closing costs

Hispanic low-income first-time homebuyers pay a median of $379 more than their non-Hispanic counterparts.*

*Calculated as a percent of the purchase price of the home.

Fannie Mae Closing Cost Study, 2021

of Hispanic mortgage application denials are due to debt-to-income ratio.
Fannie Mae calculations using 2020 HMDA
Household financial situations are barriers to being approved for a mortgage

Hispanic renters’ self-reported top obstacles to getting a mortgage are insufficient income (34%) and insufficient credit history (33%).

Fannie Mae National Housing Survey, Q4 2021

Fannie Mae actions

  • Pilot positive rental payment reporting across the multifamily industry
  • Closing costs concessions and attorney opinion letters
  • Special purpose credit programs

STEP 3
Move In & Maintain

Be a successful homeowner

Once you have purchased a home, you will need to be able to afford to keep up your mortgage payments and other homeowning costs, maintain your home in good condition, and be prepared for unexpected emergencies that may come up. Latino homeowners are more likely to pay higher monthly mortgage payments and have less earnings stability due to more gig and informal work.

Challenges

have used alternative financing for a home purchase.
High-cost financing

Latino borrowers are more likely to leverage alternative high-cost financing, therefore paying more money to finance their homes over time.

Hispanic borrowers pay higher interest rates over the long term

due to underutilization of refinancing.
Less likely to refinance to gain more favorable loan terms

Hispanic borrowers are less likely to refinance their mortgages during periods of falling interest rates, even after controlling for important factors like credit scores, equity, and income.

Gerardi, et al., 2020

Fannie Mae actions

  • Expanded counseling services to renters and borrowers facing hardship
  • Special purpose credit program home retention features
  • Fair servicing best practices
  • Valuation modernization

Fannie Mae actions to help diversify the housing industry

We are pushing our company and the housing industry to better reflect the true diversity of our nation and communities we serve. Our innovative programs aim to grow a more inclusive housing sector for renters, homeowners, lenders, borrowers, and our employees.

Jessica Brown

Jessica Brown, Appraiser Diversity Initiative

Black homeowner sitting on couch

Read next: The Black homeowning journey

Learn about distinct obstacles that may affect Black consumers throughout their homeownership experience.

Black homeowning journey

Family in kitchen

Knocking down barriers

At Fannie Mae, we’re changing the way we do business together to ensure an affordable, inclusive, and accessible housing market. Visit our Progress with Purpose page for a broader look at our efforts.

Progress with Purpose