Home Small business financing Marcia Fudge Says Student Loan Debt Limits Black Homeownership

Marcia Fudge Says Student Loan Debt Limits Black Homeownership

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Secretary of the Department of Housing and Urban Development (HUD) Marcia Fudge said student debt is one of the main reasons for disproportionate homeownership rates among black Americans.

“Who has student debt? The poor, the blacks, the browns. We are the people who carry the most debt, ”said Fudge Axes in an interview broadcast on Saturday. “The system is already skewed in that we are not creditworthy.”

US Secretary of the House and Urban Development Marcia Fudge testifies in a hearing before the Subcommittee on Transportation, Housing and Urban Development and related agencies of the Senate Appropriations Committee at the office building of the Dirksen Senate on June 10, 2021 on Capitol Hill in Washington, DC. The subcommittee held the hearing to consider President Joe Biden’s FY2022 budget request for HUD. (Photo by Alex Wong / Getty Images)

A recent report by EducationData.org found that black college graduates were more in debt than white graduates and were more likely to experience financial hardship as a result.

“Black and African American college graduates owe on average $ 25,000 more in student loan debt than white college graduates,” and “48% of black students owe an average of 12.5% ​​more than they do. borrowed “four years after graduation, according to the report.

A June 2020 study of Red tuna, a real estate brokerage firm, found that only “44% of black families own the home they live in in the first quarter of 2020”. This is compared to 73.7% for white families.

US President Joe Biden

The Federal Housing Administration (FHA) on Friday announced in a press release that it would change the calculations of monthly student loan payments to “remove barriers and provide better access to affordable FHA-insured mortgage financing for creditworthy individuals. having student loan debt, which disproportionately impacts people of color.

Fudge said these changes will allow people to become qualified homebuyers even if they have student debt that would otherwise be a barrier. “The person, let’s say who earns about $ 50,000 a year. If they want to buy a house, maybe $ 200,000 or at this point they have $ 75,000 in student debt, they don’t qualify, ”Fudge said. “We’re going to make sure that same person qualifies. “

She added that once the adjustments are made, that person would qualify “for a rate that gives them the ability to enter a home with some equity, but also to be so invested in that home that they can. allow yourself to stay in this house “.

Fudge also said that the Fair Housing Act of 1968 is not being enforced as it should and that this contributes to disproportionately low homeownership rates among black Americans. The law prohibits discrimination in housing on the basis of “race, color, national origin, religion, sex, family status and disability”.

Despite the law, black Americans still face several challenges in the homeownership process. For example, the Indianapolis Star reported in May that the value of a black woman’s home increased by $ 149,000 when a white friend represented her in an appraisal. In 2020, Business intern reported that black families pay on average about $ 60,000 more than white families for homeownership costs.

the initiate Ayelet Sheffey reported that the National Association for the Advancement of Colored People (NAACP) and at least 36 different civil rights organizations are calling on the Biden-Harris administration to eliminate $ 50,000 in student loan debt per borrower.

“Canceling student debt will help black and brown borrowers build wealth and keep our economy moving forward as millions of Americans are able to raise families, buy homes and start small businesses, ”according to a press release from The Leadership Conference on Civil. and human rights.

Fudge echoed those sentiments, saying Axes: “For people of color, especially blacks, property is wealth. It is not only a wealth for us, but it is a generational wealth.

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