16 Loan Programs for Low-income and Minority Homebuyers

Homeownership has been one of the most common and reliable ways for families to build intergenerational wealth. It’s often called The American Dream. Unfortunately, discriminatory practices against minorities, rising interest rates, and soaring housing prices have placed roadblocks on the path of many would-be homeowners.

Despite ongoing labor market rebalancing and employers’ efforts to compress wage growth, the Employment Cost Index (ECI) rose by a stronger-than-expected 1.2% in Q1 2024 — the largest increase in a year and higher than the 1.0% average gain over the previous four quarters. Wages and salaries increased by 1.1%, consistent with the average gain over the prior four quarters, while benefits also rose by 1.1%.

According to EY-Parthenon’s Q1 2024 Employment Cost Index report, they believe consumer price inflation likely will plateau at about 2.5% in the coming months. However, this rate is not significantly above the 2% target to justify excessively tight monetary policy. They argue that disinflation is still occurring, and aggressively aiming for a rapid reduction to the 2% target could potentially harm the U.S. economy more than it would help.

The all-items Consumer Price Index (CPI) for food, which measures overall inflation, rose by 0.4% from March 2024 to April 2024 and increased by 3.4% compared to April 2023. The CPI for all food items went up by 0.2% from March 2024 to April 2024, with food prices being 2.2% higher than in April 2023. So it’s understandable why some home-shoppers have placed their plans on hold.

DISCLAIMER: This article is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice. Individual program details can change. Please visit the agency or company website for the most up-to-date information on program requirements and qualifications.

However, there is help out there. We’ve gathered information about assistance programs and their various options, from loans to down payment assistance. Here you’ll find an abundance of links and expert tips to get started on your homeownership journey.

Overcoming racially restrictive policies and practices

Discriminatory policies and practices have denied — and continue to deny — communities of color access to homeownership. For instance:

Cities abused urban renewal policies and eminent domain to displace and destroy communities of color disproportionately.
“Steering” and “redlining” crushed the dreams of marginalized communities, especially Black families.
On average, homes are appraised 21% to 23% lower in majority Black neighborhoods.

We’re still feeling the effects of those discriminatory practices today. Those policies made and continue to make it challenging for underprivileged communities to own homes and build wealth.

According to a 2024 report by the National Association of Realtors (NAR), minority groups increased their homeownership rates in 2022 despite rapidly rising mortgage rates. Conversely, the white homeownership rate slightly declined, breaking a six-year growth trend. The Black homeownership rate saw a modest increase, reaching 44.1%. Also, among homeowners, data reveals a pattern of higher housing burdens among Black and Hispanic homeowners compared to their white and Asian counterparts. In Colorado, 41% of Black homeowners spend more than 30% of their income on housing, compared to 24% of white homeowners.

The “Snapshot of Race and Home Buying in America” report highlights similar racial disparities in homeownership:

Race/Ethnicity
Homeownership rate

Black
44.1%

Hispanic
51.1%

Asian
63.3%

White
72.3%

While the situation seems dire for low-income families or families of color, there is help.

“The good news is a lot of grant money is floating around right now. So it’s a great time to be a first-time homebuyer,” explains New Jersey real estate agent Chiquita Pittman, a first-time homebuyer specialist with 26 years of experience.

Read on: We’ll provide resource links and expert tips to help low-income and non-white homebuyers.