U.S. Department of Housing and Urban Development 

Office of Policy Development and Research 

Efforts to Improve Homeownership

Opportunities for Hispanics

Case Studies of Three Market Areas
Efforts to Improve Homeownership 

Opportunities for Hispanics: 

Case Studies of Three Market Areas 

Prepared for 

U.S. Department of Housing and Urban Development 

Office of Policy Development and Research 

Prepared by 

Alvaro Cortes 

Erin Wilson 

Christopher E. Herbert 

Pedram Mahdavi 

Abt Associates Inc.

Cambridge, MA

March 2006 
The contents of this report are the views of the contractor and do not necessarily reflect the views or 

policies of the U.S. Department of Housing and Urban Development or the U.S. Government. 
Table of Contents 

Executive Summary ............................................................................................................................iii

Chapter One – Introduction................................................................................................................1

1.1 Overview of National Trends............................................................................................2

1.2 Site Selection .....................................................................................................................4

1.3 Identifying Key Organizations and Respondents..............................................................4

1.4 Content and Structure of the Case Studies ........................................................................5

Chapter Two – Orlando, FL Case Study............................................................................................7

2.1 Hispanics, Homeownership Rates, and Service Providers in Orlando, FL .......................7

2.2 Homeownership Barriers.................................................................................................19

2.3 Homeownership Services in Orlando, FL .......................................................................22

2.4 Conclusions .....................................................................................................................34

Chapter Three – San Antonio, TX Case Study................................................................................37

3.1 Hispanics, Homeownership Rates, and Service Providers in San Antonio.....................37

3.2 Homeownership Barriers.................................................................................................48

3.3 Homeownership Services in San Antonio .......................................................................50

3.4 Conclusions .....................................................................................................................61

Chapter Four – Washington DC Case Study...................................................................................63

4.1 Hispanics, Homeownership Rates, and Service Providers in Washington DC ...............63

4.2 Homeownership Barriers.................................................................................................75

4.3 Homeownership Services in Washington DC .................................................................78

4.4 Conclusions .....................................................................................................................89

Chapter Five – Conclusion ................................................................................................................91

References ...........................................................................................................................................99

Table of Contents

 i 
Table of Contents

 ii 
Executive Summary 

This report is part of a multi-phased research project undertaken by the U.S. Department of Housing 

and Urban Development to understand better the factors that influence Hispanic homeownership rates 

and the reasons why Hispanic rates are lower than those of non-Hispanic whites. The research project 

also focuses on identifying policy approaches that may help close the homeownership gap between 

Hispanics and non-Hispanic whites. The first phase of the project combined a review of the existing 

literature with analysis of decennial census data to produce a national picture of Hispanic 

homeownership rates and gaps, as well as what we know about the causes of these gaps (Cortes, et 

al., 2006). In addition, the national report also identified existing strategies being implemented 

around the country to help overcome barriers to Hispanic homeownership. 

This report complements the national report by focusing on each of these issues from a local 

perspective. The findings presented in this report are based on interviews with key organizations 

located in three metropolitan areas: Orlando (FL), San Antonio (TX), and Washington DC. For each 

market, the report provides an in-depth analysis of Hispanic homeownership rates and gaps and the 

efforts to address these gaps by exploring: 

• The demographic profile of the Hispanic population; 

• Hispanic homeownership rates and gaps in comparison to national trends and to nonHispanic whites; 

• Major barriers to Hispanic homeownership, including lack of information about the 

homebuying or mortgage qualification process, as well as barriers in the housing and 

mortgage markets; 

• The services offered by providers to improve Hispanics’ access to homeownership 

opportunities; and 

• The scale of, and demand for, homeownership services, as well as approaches to 

marketing and coordinating services. 

The report is based on analysis of data from the decennial census and in-depth interviews that were 

conducted onsite with staff from a range of service providers, including housing counselors, 

affordable housing developers, mortgage lenders and loan officers, and real estate agents. Each of 

these industry representatives provides an important perspective about the barriers confronting 

Hispanics and about the ability of service providers to address these challenges. Overall, the 

interviews highlight six main themes. 

Hispanic homeownership rates and gaps are shaped by the demographic and socioeconomic 

characteristics of Hispanics. The three case studies highlight the different barriers faced by the three 

predominant Hispanic groups represented in these communities: Puerto Ricans, Mexicans, and 

Central Americans. Puerto Ricans are legal citizens, and their legal status grants them access to 

mortgage products that are not available to undocumented Hispanics. By contrast, proper 

documentation among Mexican and Central American immigrants is a problem in both San Antonio 

and Washington DC. 

Executive Summary

 iii 
In Orlando, migration patterns play an important role in understanding homeownership rates and 

barriers. Hispanics from the North (e.g., Boston and Chicago) and from Miami are moving to Central 

Florida and these Hispanics generally are better off financially and are able to purchase homes in 

Central Florida. Census 2000 data suggests that 69 percent of Hispanics in the Orlando metropolitan 

area were in a different house in 1995, and among these Hispanics, 26 percent came from a different 

state (more than half of them from the Northeast). These Hispanics are potentially responsible for 

driving the higher Hispanic homeownership rates in Orlando when compared to those of other 

metropolitan areas. 

Hispanics comprise a large share of the total population in San Antonio (45 percent in 2000), and 

service providers repeatedly indicate that this explains in part why Hispanic homeownership rates are 

higher in San Antonio than in most other metropolitan areas. The demand for homeownership 

services among Hispanics grows as the Hispanic population grows, which, in turn, prompts more 

service providers to offer targeted services to Hispanics. 

Also, the Washington DC case study demonstrates that Hispanic homeownership gaps do not always 

narrow as household income increases. This finding counters the prevailing association between 

income and homeownership rates that has been established in the literature. Although Hispanic 

homeownership rates increase steadily as income levels increase, gaps do not show any pattern of 

increase or decrease as income increases; rather they fluctuate between 19 percent and 28 percent 

across all income levels. The fluctuations in gaps in Washington DC may be attributable to the 

transient professional, diplomatic, and other international representatives that tend to rent for short 

periods of time and then return to their home country. 

In addition to these market-specific phenomenon, the case studies highlight several barriers that are 

common across all markets. For example, service providers suggest that income, English proficiency, 

and country of origin are important characteristics that contribute to a Hispanic’s likelihood of 

becoming a homeowner. A disproportionate share of Hispanic households are low-income, which is 

related to the fact that a high share of Hispanics work in the service industry. English proficiency 

among Hispanics is another important factor, because language skills affect their ability to understand 

the homebuying and mortgage qualification process—e.g., to understand critical documents such as 

credit reports, tax forms, and mortgage applications. Without this understanding Hispanics are less 

willing to consider pursuing homeownership opportunities or less likely to successfully complete the 

homebuying process. 

The most commonly identified barriers to homeownership among Hispanics are lack of 

information about the homebuying and mortgage qualification process, lack of affordable housing, 

and lack of credit or poor credit histories. Many Hispanics, particularly immigrants, are uninformed 

about the homebuying process and are unfamiliar with the roles played by different portions of the 

real estate and finance industries during the process. This lack of knowledge is attributable to their 

disengagement from mainstream financial institutions and poor English-speaking skills. However, 

service providers said that this attitude may be changing among younger Hispanics who are more 

assimilated into the American culture. In addition, some Hispanics harbor misconceptions about the 

mortgage qualification process and typically overestimate the requirements to qualify for a 

mortgage—for example, they assume that large downpayments and perfect credit are required to buy 

a home. These misconceptions discourage many Hispanics from pursuing homeownership 

opportunities, undermine their confidence in completing the process, and leave them vulnerable to 

Executive Summary

 iv 
predatory lending practices. On the other hand, other Hispanics underestimate the mortgage 

qualification requirements by assuming that anyone with a history of bankruptcies, poor credit, and 

insufficient savings can qualify for a loan. This underestimation leads some Hispanics to believe that 

credit and savings are not important factors to becoming a homeowner. According to some service 

providers, these misconceptions are fostered and reinforced by advertisements from questionable 

lenders. These Hispanics are susceptible to predatory lending practices. 

Service providers consistently cite the lack of affordable housing as a primary barrier to Hispanic 

homeownership. This lack is associated with rising housing prices combined with stagnant incomes; 

escalating costs of land, infrastructure, and construction materials that limit opportunities to develop 

new affordable homes for low-income populations; and the concentration of the affordable housing 

stock in distressed neighborhoods or in neighborhoods that are predominantly African-American or 

white. A few service providers report that some Hispanics would rather rent in a predominantly 

Hispanic neighborhood than become a homeowner in a predominantly African American or white 

neighborhood, or in some cases, a neighborhood identified with a different Hispanic community. 

This limits the availability of affordable housing to the extent that Hispanics limit their housing 

search to a small number of communities with a fraction of the metropolitan area’s affordable housing 

stock. 

Finally, lack of credit or poor credit severely limits the ability of some Hispanics to qualify for 

mortgage products. Some Hispanics do not believe in using credit to make purchases and may not 

have a savings or checking account, because of the lack of information, poor financial literacy skills, 

a general mistrust of the U.S. banking system, and poor English-speaking skills. Interestingly, 

Hispanics’ financial status may differ between first- and second-generation Hispanic households. 

First generation households may distrust and avoid financial systems in the United States even after 

being in the country for several years, while second generation households are more likely to become 

overly indebted, resulting in poor credit histories. 

The housing financing process is made easier by the growing use of flexible mortgage products 

and downpayment assistance programs, but the efficacy of these financing packages is limited by a 

community’s housing market characteristics and by the targeting of certain Hispanic households 

for services. The case studies suggest that there are an increasing number of flexible mortgage 

products capable of addressing credit and other financial barriers to mortgage financing. Some of 

these products de-emphasize underwriting guidelines that have traditionally served as barriers to 

qualifying for a loan (e.g., documenting income and employment), feature low fixed interest rates, 

and offer second mortgages that can be forgiven over time. A pilot program in the Washington DC 

area allows applicants to use an Individual Tax Identification Number in lieu of a Social Security 

Number. In addition, providers are relying on a variety of downpayment assistance programs to help 

Hispanics overcome the initial costs of becoming a homeowner. These programs are offered by all 

levels of government and are particularly effective at helping Hispanic clients with insufficient 

savings or wealth to afford the initial costs associated with homebuying. 

However, the impact of these financing packages on overall Hispanic homeownership rates is 

questionable. The availability of products that use an ITIN in lieu of SSN is very limited, and the 

amount of downpayment assistance is small relative to the rising costs of housing. Also, because 

service providers and downpayment assistance program target households earning 50 to 80 percent of 

area median incomes (AMI), moderate-income households earning 80 to 120 percent of AMI are 

ineligible for services or financial support. These households are nearly ready for homeownership 

Executive Summary

 v 
and, although some may need services similar to their low-income counterparts, they are largely 

overlooked and left to their own devices. 

The majority of Hispanic clients need most, if not all, of the available services, but clients are 

typically required to cobble these services together from multiple providers in order to overcome the 

barriers to homeownership. Service providers offer a wide-range of services to help Hispanics 

overcome barriers to homeownership, including: homebuyer education counseling, financial literacy 

classes, housing search assistance, development of affordable housing, assistance with the mortgage 

qualification process, access to mortgage products, wealth building opportunities, immigration 

services, downpayment assistance, guidance through the closing process, post-purchase counseling, 

and referrals to other service providers. Although a few providers have the capacity to function as a 

“one-stop-shop” for services by providing many of these services in-house, service providers 

typically offer only some of these services as part of their formal service package and routinely make 

referrals to other service providers to supplement their services. These breaks in the chain of service 

provision may result in incomplete homebuying processes if some Hispanic households fail to follow 

through with the referrals. 

Housing counseling agencies offer the most comprehensive package of services and they use three 

service delivery models: group seminars, one-on-one sessions, or informal counseling. Most clients 

receive services through all three service models as they progress through the agency’s program. 

Clients start by attending group seminars, which are typically designed to provide a broad, 

introductory overview of the homebuying and mortgage qualification process in a relatively short 

amount of time. The client then schedules one-on-one counseling sessions. The one-on-one 

counseling sessions typically focus on the financial barriers to homeownership and include a thorough 

review of each client’s credit report, the development of a budget and financial action plan, and an 

assessment of the client’s ability to qualify for a mortgage. Clients continue to receive one-on-one 

counseling until they are ready for homeownership. Informal counseling includes the ad hoc 

guidance that is provided along with the formal provision of services throughout the homebuying 

process. 

Service providers operate within their preferred network of providers; service coordination is 

fragmented across metropolitan areas. Despite a few efforts to better coordinate services 

metropolitan-area-wide, homeownership agencies in the study rely almost exclusively on their trusted 

network of referral organizations to supplement their services. That is, the network of organizations 

used by one agency is likely to be different from the network of organizations used by another agency 

within the same metropolitan area. These networks are often particular to each agency and tend to be 

small (3 to 6 partners). These networks are developed and maintained based on trust and past 

experience. The agency-specific networks also tend to be highly coordinated, comprehensive, and 

based on long-standing relationships. In addition, the network of trusted partners has increasingly 

expanded to include other types of organizations that are not part of the housing and mortgage market 

industry, e.g., churches or neighborhood organizations. 

This collection of agency-specific networks suggests that service coordination is fragmented across 

metropolitan areas. Agencies will only use referral organizations that are part of their network— 

mostly because they do not trust other organizations with their clients—and only a few large 

organizations are found on multiple agency-specific networks. In addition, some agencies in the 

study indicate that the Hispanic community lacks a centralized leadership that can serve as a fulcrum 

for better service coordination metropolitan-wide. 

Executive Summary

 vi 
Interviewed organizations report that there is strong demand for homeownership services among 

Hispanics, but also that their capacity to serve these clients is increasingly strained. Demand for 

homeownership services is large and expected to grow as the Hispanic population increases in each of 

these communities. In all three communities we studied, the potential pool of Hispanic renters that 

could benefit from these services is large. Most service providers interviewed for the case studies 

serve Hispanics earning between 50 to 80 percent of AMI, which typically represents about 25 

percent of all Hispanic renters in these communities. A similar proportion of Hispanic renters in 

these communities earn 80 to 120 percent of AMI. These renters often do not qualify for 

downpayment assistance programs and may not qualify for services from some of the service 

providers interviewed in these communities. Thus, there is a large group of Hispanic renters that are 

in a good position to purchase a home but may not receive services or financial support they would 

need to complete the process. 

Nearly all service providers interviewed currently are operating at full capacity, and most do not have 

additional resources to add staff or serve new clients. Service providers were unable to quantify the 

precise demand for services, but offered examples of how their marketing activities, although limited, 

resulted in an overwhelming request for their services. Few providers engage in systematic marketing 

of their services, but most conduct some form of marketing through grassroots community 

engagements or housing fairs. According to some housing counseling agencies, their agency 

confronts a “marketing gap” because, unlike realtors and lenders, housing counseling agencies are not 

well branded in the industry. 

Overall, these case studies highlight both the common barriers to Hispanic homeownership and the 

important differences across the U.S. housing markets in which Hispanics live. Service providers in 

each of the communities studied are working very hard to open homeownership opportunities to 

Hispanics, and overall, homeownership assistance is available to address most barriers. However, a 

few key concerns remain. It is unclear whether the scale of these efforts will continue to meet the 

demand for these services; service effectiveness may be undermined by the lack of coordination 

across service providers and across stages of the homebuying process; and the lack of any real 

attention to households in the 80 to 120 income group (or higher) overlooks a large segment of 

Hispanics who may need help. These concerns may suggest that government’s efforts to promote 

homeownership among Hispanics (and other low-income households) should be mindful of each 

community’s service capacity and degree of service coordination, and also account for service gaps in 

either the stages of the homebuying process or in the types of income groups served. 

Executive Summary

 vii 
Executive Summary

 viii 
Chapter One 

Introduction 

The report is part of a multi-phased research project undertaken by the U.S. Department of Housing 

and Urban Development to better understand the reasons why Hispanic homeownership rates are 

much lower than those of non-Hispanic whites and to identify policy approaches that may be most 

effective in closing the gap between the Hispanic and white rates. The first phase of the project 

combined a thorough review of the existing literature with analysis of data from the decennial census 

to produce a national picture of trends in Hispanic homeownership rates and gaps and what we know 

about the causes of these gaps (Cortes, et al., 2006). In addition, the national report also identified 

existing strategies being implemented around the country to help overcome barriers to Hispanic 

homeownership. 

This report is intended to complement the national report by focusing on each of these issues from a 

local perspective. The findings presented in this report are based on interviews with key 

organizations located in three metropolitan areas: Orlando (FL), San Antonio (TX), and Washington 

DC. For each market, the report provides an in-depth analysis of Hispanic homeownership rates and 

gaps by exploring: 

• The demographic profile of the Hispanic population; 

• Hispanic homeownership rates and gaps in comparison to national trends and to nonHispanic whites; 

• Major barriers to Hispanic homeownership, including lack of information about the 

homebuying or mortgage qualification process, as well as barriers in the housing and 

mortgage markets; 

• The range of services offered by local providers to improve Hispanics’ access to 

homeownership opportunities; and 

• The scale of, and demand for, homeownership services, as well as approaches to 

marketing and coordinating services. 

The organizations selected in these case studies play critical roles throughout the homebuying process 

and include housing counseling agencies, affordable housing development organizations, mortgage 

companies, and real estate agencies. Also, each of these service providers offer an array of services 

that help promote homeownership opportunities among Hispanics. Thus, this report presents a 

comprehensive look at Hispanic homeownership rates and gaps within three markets. 

The rest of this introductory chapter places the three case studies within a larger context by providing 

a general overview of national trends. The introductory chapter also provides a summary of how the 

three metropolitan areas were selected, and how key organizations within each metropolitan area 

were identified. 

Chapter 1. Introduction 

1 
1.1 Overview of National Trends 

Using decennial census data and a review of the existing literature, Cortes et al. (2006) present a profile 

of Hispanics in the U.S. and analyze how national homeownership rates and gaps vary by demographic 

and socioeconomic characteristics. By 2000, Hispanic homeownership rates (45.6 percent) lagged far 

behind those of non-Hispanic whites (72.5 percent), and were somewhat lower than those of other racial 

minorities, including non-Hispanic Blacks (46.6 percent), and Asian or Pacific Islanders (53.1 percent). 

Hispanic households had the largest gap in homeownership rates among all minority groups. 

The review by Cortes, et al. also finds that age, income, level of education, net worth, household type, 

nativity, country of origin, degree of social integration (citizenship status and years in the U.S.), and 

place of residence all were important factors that contributed to the gap in homeownership rates 

between Hispanics and non-Hispanic whites. The data presented demonstrate that Hispanic 

homeownership rates increase and gaps decrease with age, income, wealth, and educational status. 

Marriage is also a strong determinant of homeownership, with married couples displaying much 

higher rates of homeownership than other household types. Among the immigrant-related 

characteristics, country of origin, citizenship status, and years in the U.S. are found to be important 

correlates of Hispanic homeownership. Homeownership rates increase with citizenship and length of 

stay in the U.S., although homeownership rates of more recent immigrant groups have not risen as 

much over time as the rates of earlier immigrant cohorts. Lastly, Cortes et al. suggest that the 

concentration of Hispanics in high cost housing markets also contributes to the national gap in 

homeownership rates between Hispanics and whites. 

As Cortes et al. describe, each of these factors has clear affects on Hispanic homeownership rates and 

gaps, but determining which of the factors affect rates and gaps more heavily than others is 

challenging. There is a growing literature that uses statistical techniques to control for this broad 

range of contributing factors to identify the relative importance of each. Among the first studies to 

examine Hispanic homeownership rates, Wachter and Megbolugbe (1992) conclude that income is 

the most important factor in explaining the Hispanic-white gap in homeownership rates, followed by 

martial status and gender. Masnick (1998) employs a detailed set of cross tabulations and concludes 

that immigrant status, younger age structures, and higher fertility rates explain much of the Hispanic 

homeownership gap with whites. Still others emphasize the importance of the distribution of 

Hispanics in relatively high-cost metropolitan areas (Coulson 1999) or the concentration of Hispanics 

in ethnic enclaves (Krivo 1995) rather than personal characteristics. 

Overall, these statistical models can explain most of the gap between Hispanics and non-Hispanic 

whites, but a large part of the gap remains unexplained. In part, the unexplained gap reflects the fact 

that these models inevitably cannot capture all relevant variables, most notably individuals’ credit 

history and wealth. Other factors that are believed to affect Hispanic homeownership propensities 

that are not easily quantified in statistical models include a lack of information about the homebuying 

and mortgage qualification process, limitations on access to housing that is affordable, of good 

quality, and in desirable neighborhoods, and challenges in meeting mortgage market underwriting 

requirements. Of course, a final factor that may contribute to the observed differences in 

homeownership rates for Hispanics that these models cannot capture is discriminatory treatment in 

housing and mortgage markets. Cortes et al. (2006) provide a summary of the literature on this topic 

as well. 

Chapter 1. Introduction 

2 
Among potential Hispanic homebuyers, the decision to pursue homeownership is influenced both by 

their faith in homeownership as a desirable investment and a source of personal satisfaction, and also 

by their level of understanding of the homebuying process. As past research demonstrates, Hispanics 

have extraordinary faith in homeownership, but they are less likely to have accurate information 

about the homeownership process compared to other populations (Cortes, et al., 2006; Lee, 

Tornatzky, and Torres, 2004; Fannie Mae, 2003). These studies suggest that the level of 

understanding about the homebuying process, including the importance of good personal credit and 

the steps entailed in the mortgage qualification process is considerably lower among Hispanics, 

especially Spanish-speaking Hispanics, than in the general population. As a result, many Hispanics 

are dissuaded from considering homeownership and are less confident about completing the 

homebuying process. 

A lack of decent and affordable housing in appealing neighborhoods is particularly important to 

Hispanics. Many Hispanics are concentrated in gateway cities that tend to be high cost housing 

markets, yet Cortes et al. (2006) demonstrate that Hispanic incomes lag far behind the national 

median household income. In addition, many Hispanic households are concentrated in ethnic 

enclaves (or barrios), which, given the rapid growth in the Hispanic population, may restrict available 

housing options. Overall, these factors can chill interest in pursuing homeownership both by making 

the housing search more difficult and by putting homeownership out of reach for many Hispanic 

households. 

The literature also suggests that poor credit histories, low wealth and income, and lack of proper 

documentation all make it difficult to qualify for mortgage financing and thus represent major barriers 

to Hispanic homeownership. Poor credit can depress homeownership rates by delaying access to 

homeownership opportunities through more extensive lender reviews or by pushing Latinos into 

higher cost subprime mortgages that make homeownership unaffordable. Hispanics also are 

dissuaded from pursuing homeownership or prevented from owning a home by the large proportion 

of households with extremely low (and even negative) net worth, which is associated with low or 

seasonal incomes and by large remittance flows to relatives living in Latin America or the Caribbean. 

Lenders justifiably reject applicants that have very little (or no) capacity to repay the loan. The 

immigration status of some Hispanic households further deters Hispanics from obtaining a mortgage. 

Undocumented immigrants cannot obtain valid Social Security Numbers (SSN), which, in turn, 

prevents them from applying for most mortgage loans as well as for federally funded homeownership 

assistance programs. 

One important observation that emerges from the national review of Hispanic homeownership rates is 

that the U.S. Latino population is extremely diverse. Hispanics have immigrated to the U.S. from a 

broad range of countries, with a correspondingly broad range of cultural and economic legacies. 

Hispanics also differ greatly in the length of time they have lived in the U.S. In some markets, a large 

share of Hispanics are recent immigrants, while in other areas Hispanics have lived in the U.S. for 

many generations. Given the diversity of the Hispanic population across U.S. market areas, reviews 

of this issue at the national level, such as Cortes et al. (2006), may not characterize accurately the key 

the challenges to increasing Hispanic homeownership in different market contexts. The purpose of 

this study is to focus specifically on a few market areas chosen to reflect key aspects of the diversity 

of the U.S. Hispanic population in order to explore how barriers to Hispanic homeownership vary at 

the metropolitan level. The next section describes how and why the market areas selected for this 

study were chosen. 

Chapter 1. Introduction 

3 
1.2 Site Selection 

The primary factors that influenced the selection of sites were: 

• The distribution of Hispanics by country of origin and immigrant status; 

• The level of housing prices; and 

• The size of the Hispanic homeownership gap. 

In selecting candidate markets for the case studies, we also chose to avoid the largest metropolitan 

areas, as it was felt it would be too difficult to obtain a fairly complete understanding of efforts aimed 

at increasing Hispanic homeownership in these markets. Once a preliminary group of sites was 

selected, short interviews were conducted with national researchers and industry experts who work on 

Hispanic homeownership issues. The national experts included representatives from national 

intermediaries for community-based organizations (e.g., Neighborhoodworks and the Enterprise 

Foundation), Hispanic real estate professional groups (e.g., the National Council of La Raza), and 

foundations providing support for efforts to promote Hispanic homeownership (e.g., the Ford 

Foundation). The purpose of the interviews was to obtain input on the proposed sites and to review 

the main barriers to Hispanic homeownership that were discovered in the literature review and data 

analysis. Researchers also solicited contacts for local programs that successfully move Hispanics into 

homeownership in the selected communities. 

Orlando, San Antonio, and Washington, DC were ultimately selected because the sites offered 

considerable variation across several key dimensions among Hispanic households, especially country 

of origin, share of citizens and non-citizens, and proportion of total population. These sites also 

included a mix of high-priced and more affordable housing markets and provided variation in the size 

of the Hispanic homeownership gap. The Hispanic population in Orlando is predominantly Puerto 

Rican, the Hispanic homeownership rate is higher than the national average, and the Hispanic 

homeownership gap is lower. Although Orlando remains more affordable than Washington DC, the 

median house price has increased over the last few years. The Washington DC case study presents a 

picture of Hispanic homeownership in a high-cost housing market with a large proportion of Central 

American, immigrant households. Hispanic homeownership rates in the Washington area are slightly 

below the national average, and the gap is larger. In San Antonio, the Hispanic homeownership rate 

is high compared to the national average, the gap is lower, and the housing market is relatively 

affordable. In addition, the Hispanic population consists of a very large proportion of Mexicans and 

other Hispanics who are natives and U.S. citizens. 

After selecting the three sites for the case studies, it was important to identify a broad range of 

organizations within each site to participate in the interviews. 

1.3 Identifying Key Organizations and Respondents 

Several approaches were used to identify key organizations and interview respondents within each 

site. First, a sample of HUD-approved housing counseling agencies, local government 

homeownership program offices, and local contacts provided by the national homeownership and 

Hispanic organizations (e.g., the National Council of La Raza) were contacted. The purpose of these 

contacts was to identify a group of local homeownership counseling programs and community 

Chapter 1. Introduction 

4 
development organizations that predominantly assist Latinos and are experienced with Hispanic 

homeownership issues. Researchers also wanted to identify different types of service providers, 

including housing counseling agencies, housing developers, realtors, lenders, and other relevant 

financial or professional service providers. It was also important to identify service providers that 

operate in different geographic locations throughout the metropolitan area. In addition to preliminary 

discussions with local informants, an Internet search was conducted to identify additional 

organizations involved in promoting Hispanic homeownership in the housing market areas selected 

for the case studies. 

Based this information, representatives from key agencies in each site were contacted to schedule 

one- to two-hour onsite interviews for the case studies. Interviews were completed with 

representatives from three to four organizations in each market. An important component of each 

interview was to identify partners that the agency worked with to provide homeownership services to 

their clients. Respondents provided contact information for these key partners and researchers 

solicited telephone interviews with these organizations as necessary. This approach provided a more 

complete picture of the network of service providers that help expand homeownership opportunities 

to Hispanics in each metropolitan area. 

1.4 Content and Structure of the Case Studies 

Chapters Two through Four of this report present case studies for each of the selected markets. Each 

case study consists of three sections. First, the case studies present a demographic profile of the 

Hispanic population in the metropolitan area and a picture of Hispanic homeownership rates and gaps 

in comparison to national trends and to non-Hispanic whites in the metropolitan region. The section 

also provides an overview of each service provider interviewed for the case study. Second, the case 

studies review the key barriers to homeownership that were identified by interview participants, 

including lack of information about the homebuying or mortgage qualification process and barriers in 

the local housing market and mortgage market. Lastly, a description of the various services offered 

by these organizations is provided. For each organization, the section describes: 

• The nature of services and service delivery models; 

• The scale of services; 

• The types of partnerships that are forged to supplement services; 

• Marketing activities; and 

• The demand for homeownership services. 

Assessing the scale and demand for services is complicated. A homeownership program can be 

measured by the total number of clients served monthly or annually, for example, but this measure is 

meaningful only when coupled with an assessment of the total demand for services. The scale of 

services in relation to the demand for services provides a measure of the service gap, or the unmet 

needs for homeownership services in a community. The unmet need for services may suggest how 

many households could become new homeowners if service were expanded. Service providers were 

asked to gauge the demand for services in their community by estimating the percentage of Hispanic 

renters that would be interested in homeownership and, within that segment, the percentage that 

would be eligible for services and ready or able to be prepared for homeownership. 

Chapter 1. Introduction 

5 
Chapter Two explores Hispanic homeownership in Orlando; Chapter Three in San Antonio; and 

Chapter Four in Washington, DC. The final chapter presents the conclusions drawn from a cross-site 

analysis. 

Chapter 1. Introduction 

6 
Chapter Two 

Orlando, FL Case Study 

This chapter reviews some of the main efforts to improving homeownership opportunities among 

Hispanic households in the Orlando metropolitan area. The chapter proceeds in four sections. The 

following section describes the demographic characteristics of Hispanics in the Orlando metropolitan 

area and presents their homeownership rates and gaps. The section also provides an overview of the 

service providers interviewed for the case study. Section 2 reviews the key barriers to 

homeownership that were identified by interview participants, and Section 3 describes the services 

offered by the interviewed organizations. The concluding section summarizes the main themes 

brought out by the Orlando case study. 

2.1 Hispanics, Homeownership Rates, and Service Providers in 

Orlando, FL 

Hispanic Profile 

Hispanics constitute 17 percent of Orlando’s total population. Exhibit 2-1 shows the country of 

origin for Hispanics living in Orlando. The majority are Puerto Rican (55 percent), followed by 

Mexican (11 percent), South American (10 percent), Cuban (9 percent) and other (9 percent). Central 

Americans, Dominicans and Spaniards collectively constitute less than eight percent of the Hispanic 

population. 

Exhibit 2-1 Exhibit 2-2 presents the racial 

Country of Origin for Hispanics in Orlando, 2000 characteristics of Hispanics and nonHispanics in Orlando and in the U.S. A 

significantly higher percentage of Dominican 

Republic Hispanics in Orlando identify themselves Central America 

Mexico 

10.5% 

3.6% 

Spain as white Hispanics when compared to 4.0% 0.2% Hispanics nationally (62 percent 

Others compared to 50 percent), while 8.7% 

significantly fewer Hispanics in Orlando 

identify themselves as belonging to some 

Cuba other race compared to Hispanics Puerto Rico 

54.5% nationally (28 percent compared to 41 

percent). 

8.9% 

South America

9.7%

Exhibit 2-3 presents the socio-economic 

characteristics of Hispanic and nonHispanic households in Orlando and in 

the U.S. The income distribution among 

Hispanic households in Orlando is similar to the distribution of Hispanics nationally, although the 

proportion of Orlando households in the higher income ranges ($60,000 to $70,000 and greater than 

$70,000) is smaller as is the proportion of those with incomes below $10,000. Accordingly, there are 

Chapter 2. Orlando, FL Case Study 

7 
2000

slightly higher concentrations of Hispanics in Orlando with incomes between $20,000 and $60,000 

(55 percent) than Hispanics nationally (49 percent). 

Exhibit 2-2 

Racial Characteristics of Hispanic and Non-Hispanic Households in Orlando, FL and the U.S., 

Race 

White 

Black or African American 

American Indian/Alaska Native 

Asian 

Native Hawaiian/Pacific Islander 

Some other race 

Two or more races 

Total 

 Orlando, FL 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

62.3% 82.1% 

3.0% 12.9% 

0.4% 0.3% 

0.2% 2.4% 

0.0% 0.0% 

27.7% 0.2% 

6.5% 2.0% 

82,453 543,336 

U.S. 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

50.4% 82.1% 

2.0% 12.3% 

1.0% 0.7% 

0.3% 3.2% 

0.1% 0.1% 

40.5% 0.1% 

5.8% 1.5% 

9,187,972 96,292,129 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample 

In addition, Hispanics in Orlando appear to have significantly higher levels of educational attainment 

when compared to Hispanics nationally. Nearly half of Hispanic households (49 percent) in Orlando 

have at least some college education, compared to only 33 percent of Hispanics nationally. Although 

disparities in educational attainment exist between Hispanics in Orlando and their non-Hispanic 

counterparts, the gaps are smaller across all levels of educational attainment compared to the 

differences between Hispanics and non-Hispanics nationally. 

Exhibit 2-4 presents the immigration characteristics of Hispanic and non-Hispanic households in 

Orlando and in the U.S. A significantly higher percentage of Hispanic households in Orlando are 

foreign born than Hispanics nationally (75 percent compared to 53 percent), while at the same time a 

significantly higher percentage of Hispanic households in Orlando are U.S. citizens when compared 

to Hispanics nationally (83 percent compared to 68 percent). The large Puerto Rican population in 

Orlando, considered by the U.S. census to be foreign-born citizens, accounts for these immigration 

characteristics. 

Chapter 2. Orlando, FL Case Study 

8 
Exhibit 2-3 

Socio-Economic Characteristics of Hispanic and non-Hispanic Households in Orlando, FL 

and the U.S., 2000

 Orlando, FL U.S. 

% Hispanic 

Households 

% non-Hisp. 

Households 

% Hispanic 

Households 

% non-Hisp. 

Households 

Income 

<$10,000 

$10,000 and <$20,000 

$20,000 and <$30,000 

$30,000 and <$40,000 

$40,000 and <$50,000 

$50,000 and <$60,000 

$60,000 and <$70,000 

$70,000 or more 

9.5% 

15.6%

17.7%

15.9%

12.4%

8.8%

5.8%

14.2%

6.8% 

11.6% 

13.5% 

13.2% 

12.2% 

9.6% 

7.6% 

25.5% 

12.7% 

15.9% 

15.8% 

14.0% 

10.9% 

8.4% 

6.2% 

16.2% 

9.3% 

12.3% 

12.7% 

12.2% 

10.6% 

9.0% 

7.3% 

26.6% 

Education 

Less than High School 

High school graduate, or GED 

Some college, no degree 

Associate degree 

Bachelors degree 

Professional/Graduate degree 

26.9% 

24.0% 

23.2% 

7.9%

12.1%

5.8% 

14.5% 

25.7% 

23.4% 

7.7% 

19.4% 

9.2% 

45.6% 

21.8% 

17.1% 

4.4% 

7.1% 

4.1% 

16.3% 

27.8% 

22.5% 

6.2% 

16.9% 

10.3% 

Age 

<30 

30-34

35-44

45-54

55-64

65-74

75+ 

21.1% 

12.8% 

26.5% 

17.1% 

11.4% 

6.9% 

4.1% 

12.8% 

9.8% 

23.2% 

19.0% 

13.3% 

11.6% 

10.3% 

20.8% 

14.4% 

26.9% 

18.0% 

9.7% 

6.5% 

3.8% 

12.0% 

8.9% 

22.2% 

20.4% 

13.9% 

11.5% 

11.1% 

Household Type 

Married couples with children 

Married couples w/o children 

Other Families with children 

Other Families without children 

Other1 

Total Number of Households 

33.8% 

24.5% 

13.6% 

8.6% 

19.4% 

82,453 

21.8% 

31.6% 

8.2% 

6.1% 

32.3% 

543,336 

37.8% 

19.9% 

14.7% 

9.2% 

18.3% 

9,187,972 

23.1% 

30.4% 

8.1% 

6.4% 

32.0% 

96,292,129 

Other household types include singles; separated, divorced, widowed people (without own children); and other 

unrelated people living together (without own children). 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Chapter 2. Orlando, FL Case Study 

9 

1 
Exhibit 2-4 also shows levels of English proficiency and years in the U.S. among Hispanic and nonHispanic households in Orlando and nationally. Hispanic households in Orlando appear to have a 

higher level of English proficiency overall compared to Hispanics nationally (82 percent speak 

English at least ‘well,’ compared to 75 percent nationally). However, a significantly lower 

percentage of Hispanics in Orlando speak only English (10 percent in Orlando, compared to 18 

percent nationally). Also, there is a significantly larger proportion of foreign-born Hispanic 

immigrants in Orlando that have been in the U.S. for less than 5 years (21 percent) than nationally (13 

percent). 

Exhibit 2-4 

Immigration Characteristics of Hispanic and Non-Hispanic Households in Orlando, FL and 

the U.S., 2000

 Orlando, FL U.S. 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

Nativity 

Native born 

Foreign born 

25.4% 

74.6% 

89.0% 

11.0% 

47.0% 

53.0% 

91.9% 

8.1% 

Citizenship Status 

U.S. citizen 

Not a U.S. citizen 

82.6% 

17.4% 

95.4% 

4.6% 

67.8% 

32.2% 

96.9% 

3.1% 

English Speaking 

Yes, speaks only English 

Yes, speaks very well 

Yes, speaks well 

Yes, but not well 

Does not speak English 

9.6% 

49.9% 

22.8%

14.0% 

3.6% 

91.3% 

5.8% 

1.8% 

1.0% 

0.1% 

17.8% 

37.1% 

19.9% 

17.8% 

7.6% 

91.4% 

5.3% 

2.0% 

1.1% 

0.2% 

Years in the U.S. for foreign 

born1 

0-5 years 

6-10 years 

11-15 years 

16-20 years 

21+ years 

20.7% 

13.5% 

14.8% 

10.8% 

40.2% 

15.7% 

13.7% 

12.0% 

14.3% 

44.3% 

12.8% 

14.8% 

18.7% 

16.2% 

37.4% 

14.5% 

12.8% 

11.8% 

12.3% 

48.6% 

Only includes households with immigrant heads of household, defined as any person who was foreign born, including 

persons born in Puerto Rico or other U.S. outlying areas and persons born abroad to U.S. parents. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Homeownership Rates 

Exhibit 2-5 presents homeownership rates and gaps in Orlando by race. Homeownership gaps are 

determined by comparing the homeownership rates of Hispanic households to those of non-Hispanic 

Chapter 2. Orlando, FL Case Study 

10 

1 
1 

white households (hereafter referred to as “whites”). In Orlando, Hispanic households have higher 

homeownership rates than blacks or others. This is unlike national patterns. Hispanic households in 

Orlando also have a homeownership rate that is 9 percentage points higher than Hispanics nationally. 

Nevertheless, the gap in homeownership rates between Hispanics and white households in Orlando is 

nearly 18 percentage points. 

Exhibit 2-5 

Homeownership Rates and Gaps1

in Orlando, FL, 2000

Race

Hispanic 

Non-Hispanic 

Black 

Asian or Pacific Islander 

Other 

White 

Total 

 Orlando, FL U.S. 

 Households Rate Gap Households Rate Gap 

82,453 54.5% -17.5% 9,187,972 45.6% -26.8% 

70,145 48.7% -23.2% 11,796,057 46.6% -25.9% 

13,286 62.9% -9.0% 3,181,674 53.1% -19.4% 

13,866 49.2% -22.7% 2,236,977 51.2% -21.3% 

446,039 71.9% 79,077,421 72.5% 

625,789 66.3% 105,480,101 66.2% 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

The next section describes how Hispanic homeownership rates and gaps in Orlando vary by key 

demographic and socioeconomic factors that have been identified in the literature as having an 

important effect on homeownership rates. These factors include: income, level of education, country 

of origin, and years in the U.S. Other factors—such as age, household type, English proficiency, 

citizenship, nativity, citizenship, and year of arrival in the U.S.—are not reviewed because their affect 

on homeownership rates closely resemble national patterns. It is important to note that although these 

patterns are similar, homeownership rates among Hispanic households in Orlando are consistently 

higher and the gaps are consistently smaller relative to Hispanics nationally for all of the factors 

mentioned above. 

Income 

Exhibit 2-6 presents the Hispanic homeownership rates and gaps by income for Orlando. Similar to 

national trends, homeownership rates increase and gaps decrease as income rises. (Gaps widen 

slightly in the highest income category.) However, unlike national trends that evince a gradual 

decrease in gaps as incomes rise, there is a dramatic decline in homeownership gaps among very lowincome and low-income households in Orlando. Homeownership gaps drop sharply by 12 percentage 

points among households earning between $10,000 to $20,000 and those earning between $30,000 to 

$40,000. This trend suggests that income gains among low-income households disproportionately 

affect the likelihood that a Hispanic will become a homeowner when compared to low-income white 

households. 

Chapter 2. Orlando, FL Case Study 

11 
1 

Exhibit 2-6 

Homeownership Rates and Gaps by Annual Income1 in Orlando, FL, 2000 Homeownership Rate Homeownership Gap 

30% 

39% 

45% 

55% 

62% 66% 

76% 

-21% -21% -16% 

-9% -9% -10% 

77% 

-9% -5% 

<$10,000 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 or 

and and and and and and More 

<$20,000 <$30,000 <$40,000 <$50,000 <$60,000 <$70,000 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Level of Education 

Exhibit 2-7 presents the Hispanic homeownership rates and gaps for Orlando by level of education. 

Similar to trends nationally, homeownership rates for Hispanics rise gradually as educational 

attainment increases. However, the impact of educational attainment on homeownership rates is less 

pronounced in Orlando compared to national trends. In Orlando, homeownership rates improve from 

48 percent among households with less than a high school education to 66 percent among Hispanics 

with a professional/graduate degree (or a 18-percentage point increase). Nationally, homeownership 

rates increase from 40 percent among poorly educated households to 62 percent among the highly 

educated (or a 22-percentage point increase). Also, unlike national trends, obtaining a high school 

diploma or GED decreases the gap slightly (2 percentage points) in Orlando. Nationally, the 28 

percentage-point gap remains constant for these two categories of educational attainment. 

Chapter 2. Orlando, FL Case Study 

12 
1 

Exhibit 2-7 

Homeownership Rates and Gaps by Level of Education 1

in Orlando, FL, 2000 

Homeownership 

Rate 

Homeownership 

Gap 

48% 

54% 55% 58% 

61% 

-21% -19% 

-14% 

-10% -13% -15% 

66% 

Less than High School Some College, Associate Bachelors Professional/ 

High School Graduate, or no Degree Degree Degree Graduate 

GED Degree 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Country of Origin 

Exhibit 2-8 presents the Hispanic homeownership rates and gaps for Orlando by country of origin. 

With the exception of the Mexican population in Orlando, Hispanics in Orlando have significantly 

higher homeownership rates and lower gaps than their counterparts nationally. For example, about 57 

percent of Puerto Ricans and 52 percent of Dominicans in Orlando are homeowners, compared to 

only 34 percent of Puerto Ricans and 20 percent of Dominicans nationally. The gap among Puerto 

Ricans is 15 percent (38 percent nationally), and among Dominicans the gap is 20 percent (52 percent 

nationally). By contrast, the homeownership rate among Mexicans in Orlando (45 percent) is 3 

percentage points lower that their national counterparts (48 percent), and the gap among Mexicans in 

Orlando (27 percentage points) is larger than the gap among Mexicans nation-wide (24 percentagepoints). Spaniards consistently demonstrate the highest homeownership rate and lowest gaps in 

Orlando and nationally. 

Years in the U.S. 

Exhibit 2-9 presents the Hispanic homeownership rates and gaps for Orlando by years in the U.S. 

Homeownership rates gradually increase as length of tenure in the U.S. increases. Homeownership 

rates in Orlando are significantly higher across all length of tenure categories when compared to 

national rates. For example, homeownership rates are 25 percentage points higher among Hispanics 

in Orlando who have been in the U.S. for 6-10 years, when compared to their national counterparts. 

Chapter 2. Orlando, FL Case Study 

13 
1 

Exhibit 2-8 

Homeownership Rates and Gaps by Country of Origin1 in Orlando, FL, 2000 Homeownership Rate Homeownership Gap

-27% 

-15% 

-10% 

-20% 

-2% 

-22% -19% -21% 

70% 

50% 53% 51% 

62% 56% 

52% 

45% 

Mexican Puerto Cuban Dominican Spaniard Central South Other 

Rican American American Spanish 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Exhibit 2-9 

Homeownership Rates and Gaps by Years in the U.S.1 in Orlando, FL, 2000 Homeownership Rate Homeownership Gap 

55% 

60% 

69% 

0% 2% 2% 

-4% -7% 

35% 

49% 

0-5 years 6-10 years 11-15 years 16-20 years 21+ years 

Homeownership gaps are calculated in relation to the homeownership rate of non-Hispanic immigrants with the 

same number of years in the U.S. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Chapter 2. Orlando, FL Case Study 

14 

1 
Accordingly, homeownership gaps between Hispanic and non-Hispanic immigrant households in 

Orlando are significantly smaller than gaps nationally. In fact, for the periods of 6-10 and 11-15 

years, Hispanics in Orlando are more successful at becoming homeowners than their non-Hispanic 

immigrant counterparts. For each of these two periods, the homeownership rate among Hispanic 

immigrants is 2 percentage points higher than non-Hispanics immigrants. By contrast, 

homeownership rates among Hispanic immigrants nationally lag behind non-Hispanic immigrants by 

13 and 15 percentage points in these two periods. 

Organizations Interviewed in the Orlando area 

The remainder of this case study is based on interviews with representatives from four agencies in the 

Orlando metropolitan area. 

Association of Community Organizations for Reform Now (ACORN) Housing 

ACORN Housing is a national non-profit organization that has been providing housing 

counseling services to low- and moderate-income homebuyers since 1987. ACORN Housing 

is a HUD-certified housing counseling agency that provides one-on-one mortgage loan 

counseling and first-time homebuyer classes, which help clients obtain affordable mortgages 

through the organization’s lending partnerships. The organization staffs two-Spanish 

speaking housing counselors. The organization’s primary mission is to promote 

homeownership through education and credit counseling. The ACORN Housing program in 

Orlando started in 2005. 

ACORN Housing in Orlando has an income cap of $55,100 for eligibility for the agency’s 

programs. ACORN also requires that clients with previous bankruptcies wait at least two 

years after the bankruptcy discharge date to be eligible for services and that clients with 

previous foreclosures wait at least three years after the foreclosure date. The organization’s 

client profile is a mix of minorities and non-Hispanic whites, usually low-income, young (25­

45), and single parents (especially mothers). ACORN Housing clients live throughout 

Central Florida. Hispanics tend to be Puerto Ricans, followed by Colombians, Dominicans, 

some Venezuelans and Cubans, and a few Mexicans. According to ACORN Housing staff, 

Mexicans are a particularly difficult Hispanic population to serve because many are 

undocumented, unlike Colombians and other South Americans. A large portion of Hispanics 

served by the program do not speak English or speak English poorly, especially the older 

clients. 

Housing and Neighborhood Development (HANDS) 

HANDS is a non-profit organization that was incorporated in 1989 and is both a HUDcertified housing counseling organizations and a community housing development 

organization. HANDS owns over 880 multifamily units for low- and moderate-income 

households, builds about 10 single-family homes each year, and maintains an extensive 

database of affordable apartments. The organization has two Spanish-speaking staff 

members; one staff member provides one-on-one counseling and conducts classroom style 

seminars, and another conducts the intake with each client. The primary mission of HANDS 

is to promote homeownership and affordable housing by educating clients on how to become 

homeowners, helping clients repair credit issues, and developing affordable housing. 

Chapter 2. Orlando, FL Case Study 

15 
HANDS focuses on serving very low- and low-income households (typically less than 

$18,000 annually), and many of their clients are in their program for 2 to 3 years. The 

agency’s services are free for eligible clients. Approximately 37 percent of clients are very 

low income (below 50 percent of AMI), 36 percent are low income (between 51 and 80 

percent of AMI), 21 percent are moderate income (between 80 and 100 percent of AMI), and 

the remaining proportion are either above 100 percent of AMI or have no income. About 

three-fifths of clients are between 20-39 years old, one-third are married, and more than half 

are 1 or 2 person households. 

Hispanic clients represent 35 percent of the total clientele, and the Hispanic demographic 

profile differs from the total client-base in a few important ways. Hispanics are more likely 

to belong to large families that are headed by married couples. Approximately 80 percent of 

clients are Spanish-speaking only. Most work in the service industry and thus belong to the 

very low- or low-income categories. The majority of Hispanics are Puerto Ricans, with the 

balance consisting of Cubans, Mexicans, and South Americans. 

Metro Orlando Urban League (MOUL) 

The mission of MOUL is to assist disadvantaged persons in Central Florida by promoting 

their economic self-reliance, empowerment and civil rights. The organization focuses on 

persons with severe needs and serves people of all races and ethnicities. The Orlando chapter 

is a HUD-approved housing counseling agency with 22 staff members, including four 

English-speaking housing counselors and one Spanish-speaking counselor. A key part of the 

organization’s mission is to promote economic self-sufficiency and build financial capacity 

through homeownership and fiscal responsibility. These goals form the foundation for the 

homeowner education courses and credit counseling classes. 

About 26 percent of MOUL’s clients are Hispanic, and African Americans constitute the 

largest minority group (about 50 percent) served by the organization. The majority of clients 

(58 percent) are female. Approximately three-fifths of clients are married couples, and 

almost half of these households have children. Among the unmarried clients, 63 percent are 

female-headed households and nearly all of these single female-headed households have 

children (88 percent). The majority of MOUL’s clients are 20-54 years old (51 percent), and 

about 6 percent are 65 years or older. About 80 percent of the clients earn less than $20,000 

annually, and 40 percent earn less than $10,000 yearly. About one in every ten clients earns 

$30,000 or more annually. One-third of clients are employed, and almost one-fifth are 

retired. 

National Association of Hispanic Real Estate Professionals (NAHREP) 

The mission of NAHREP is to increase the Hispanic homeownership rate by empowering real 

estate professionals that serve Hispanic consumers. The association accomplishes this task 

by creating a forum where information can be exchanged and where educational tools that 

help members understand and effectively handle the cultural distinctions of their clients are 

distributed and discussed. The association also has a political action committee that supports 

the legislative interests of Hispanic real estate professionals. The Orlando chapter is 

particularly focused on educating real estate professionals about the variety of mortgage 

products and fair real estate practices, as well as on promoting awareness of important 

difference between the various Hispanic cultures. The Orlando chapter was founded in 2004 

and includes real estate agents, home inspectors, representatives from title and insurance 

Chapter 2. Orlando, FL Case Study 

16 
companies, and mortgage lenders. We interviewed the president of the NAHREP Orlando 

chapter who is a real estate professional. 

NAHREP members serve any client who needs assistance with the homebuying process, and 

many of their clients are Hispanic. According to the NAHREP representative, most of the 

clients are Puerto Ricans, followed by Mexicans, and then other South Americans. Also, the 

majority of their Hispanics clients work in Orlando’s service industry and are low-skilled, 

low-paid workers. Most clients are married couples with children, although there is a large 

proportion of single-female headed families with children. Most are 30-40 years old, and 

most speak English but feel more comfortable speaking Spanish. 

The list of HUD-approved counseling agencies identifies five agencies providing homeownership 

counseling in Orlando.1

 Of these, three were interviewed for this study (HANDS, the Urban League, 

and ACORN). Based on data on the number of counseling clients served by HUD-approved agencies 

in 2004, the interviewed agencies accounted for roughly two-thirds of both Hispanic housing 

counseling clients and all pre-purchase homeownership workshop attendees in the market area. 

Exhibit 2-10 displays the geographic location of these service providers within the immediate 

Orlando metropolitan area and also shows the neighborhoods with the highest concentration of 

Hispanic renters.2

 As the exhibit suggests, most of the service providers interviewed for this case 

study are located in areas with many Hispanic renters and thus are well situated to engage prospective 

Hispanic homebuyers. HANDS and NAHREP’s offices are located in neighborhoods that have the 

highest quartile of concentration of Hispanic renters. ACORN Housing and MOUL are located in 

areas with an above median concentration of Hispanic renters. 

The exhibit also shows the distribution of Hispanic renters in proportion to all households throughout 

the immediate Orlando vicinity. There are large concentrations of Hispanic renters within the city’s 

southeast and southwest areas. 

1 The list of HUD-approved counseling agencies was obtained from the HUD Web site 

(www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm). 

2 Neighborhoods are represented by census tracts. In the map, tracts are divided into quartiles based on 

Hispanic renters’ share of all households. The quartiles are defined as follows: tracts in the lowest quartile 

have between 0 and 1.4 percent Hispanic renters, the second quartile tracts have between 1.4 and 3.8 

percent Hispanic renters; the third quartile tracts have between 3.8 and 7.9 percent Hispanic renters, and the 

top quartile tracts have more than 7.9 percent Hispanic renters. 

Chapter 2. Orlando, FL Case Study 

17 
Exhibit 2-10: Percent of Hispanic Renters of All Households in the Orlando Metropolitan Area, 2000 

Chapter 2. Orlando, FL Case Study 

18 
2.2 Homeownership Barriers 

This section briefly reviews the key barriers to homeownership that were identified by interviewees in 

Orlando. Overall, respondents identified many of the barriers that are highlighted in the 

homeownership literature, including lack of information, lack of affordable housing, and questionable 

practices in the housing and mortgage market industry (see Cortes et al. 2006). Staff from these 

service providers identified other factors that are less pronounced in the literature, including the 

interaction between the neighborhood preferences of prospective Hispanic homebuyers and the 

availability of affordable homes. 

Lack of Information 

According to service providers in Orlando, Hispanics often: 

• Do not understand the overall home purchase process or the responsibility of being 

a homeowner. It is not uncommon for Hispanic renters to be uninformed about the 

homebuying process and unfamiliar with the roles played by different stakeholders 

throughout the process. The lack of knowledge discourages many Hispanics from 

pursuing homeownership opportunities and undermines their confidence in completing 

the homebuying process. Also, some prospective Hispanic homebuyers do not 

understand what it means to become a homeowner. For example, some Hispanics do not 

understand that as a homeowner they do not have a landlord to contact for repairs. 

• Have incorrect perceptions about the mortgage qualification process. Service 

providers described two forms of misconceptions about the mortgage qualification 

process. On the one hand, some Hispanics overestimate the mortgage qualification 

requirements by assuming that large downpayments and perfect credit are required to buy 

a home. These Hispanics are typically unaware of mortgage products that are flexible 

and are designed to help low- and moderate-income households qualify for a loan. 

Hispanics with these perceptions of the mortgage qualification process typically selfselect out of pursuing homeownership. On the other hand, other Hispanics underestimate 

the mortgage qualification requirements by assuming that anyone with a history of 

bankruptcies, poor credit, and insufficient savings can qualify for a loan. This 

underestimation leads some Hispanics to believe that credit and savings are not important 

factors to becoming a homeowner. According to service providers, these misconceptions 

are fostered and reinforced by advertisements from questionable lenders. These 

Hispanics are susceptible to predatory lending practices. 

• Do not understand the importance of establishing and maintaining good credit. 

Several providers indicated that some of their clients Hispanics do not believe in using 

credit and may not have a savings or checking account. Staff from several service 

providers describe this barrier as a cultural phenomenon, and one staff member described 

it as follows: “The Hispanic way of thinking is that if your don’t have the cash to 

purchase something, then you don’t get it.” Overall, service providers believe this 

attitude stems from a general mistrust of the banking system that was developed in their 

country of origin, and may have resulted from a bad experience or from the general 

financial instability that exists in some countries. However, service providers said that 

this attitude may be changing among younger Hispanics who are more assimilated into 

the American culture. 

Chapter 2. Orlando, FL Case Study 

19 
In general, respondents report that a lack of knowledge about the homebuying and mortgage 

qualification process is the most significant barrier to homeownership among Hispanics in Orlando. 

Knowledge gaps are attributed to several important factors. First, Hispanics’ disconnect from 

mainstream financial institutions deprives them of opportunities to learn about how the U.S. financial 

system functions and thus undermines their financial literacy (e.g., how to create a budget, write a 

check, or develop a credit history). Service providers note that some Hispanics are unaccustomed to 

having a savings or checking account and typically handle all their purchases with cash. Some 

Hispanics are unaware that they must file taxes yearly and that mortgage lenders require this 

information to qualify for a loan. 

Respondents also reported that the knowledge gap among Hispanics is associated with their 

experiences in their country of origin. For example, a housing counselor comments that in Puerto 

Rico households can build a home relatively easily without obtaining building permits or 

documenting their financial history with an industry representative. By contrast, the homebuying 

process in the United States is heavily regulated and requires documentation regarding their wealth, 

income, and previous employment history. This process may appear intimidating and too 

complicated for some Hispanics, which may discourage them from pursuing homeownership at all or 

from finishing the homebuying process once begun. According to several service providers, cultural 

incongruities between Hispanic immigrants and the U.S. homebuying process are particularly acute 

among older Hispanics. 

Another barrier identified by respondents is poor English-speaking skills that prevent some Hispanics 

from interacting with industry professionals and may make them afraid to take the first steps towards 

homeownership. Having Spanish-speaking professionals on staff helps bridge the language and 

information gap, but according to several providers, some Hispanics will never contact a housing 

counseling agency for fear that no one speaks Spanish. 

Lastly, respondents noted that knowledge gaps are exacerbated by the interaction between Hispanics’ 

lack of information, particularly the importance of credit and establishing a good credit history, and 

questionable industry practices. The lack of information is exploited by industry actors who place 

advertisements that claim to provide homeownership opportunities with “no money down” to people 

with previous bankruptcies and bad credit. These advertisements mislead Hispanics (and other 

prospective homebuyers) by implying that establishing good credit is not very important because even 

the worst financial scenarios will not prevent them from becoming homeowners. Hispanics who use 

these services are typically offered adjustable, high-interest rate loans that are unsustainable in the 

long-term. These prospective Hispanic homebuyers are told not to worry because they can either 

refinance when needed or file for bankruptcy. However, service providers suspect that most of these 

loans result in foreclosure, which further damages the homebuyers’ credit histories. Thus, staff 

describe a vicious chain of events that begins with a lack of information about the homebuying and 

mortgage qualification process among many Hispanics, leading to their exploitation by industry 

actors, which in turn, results in further damage to Hispanics’ credit history. 

The confluence of these factors creates significant fears of rejection among Hispanics, which many 

service providers believe can be addressed with proper education and guidance. Myths about the 

homebuying process often reinforce preconceptions that homeownership is an unattainable goal. 

Chapter 2. Orlando, FL Case Study 

20 
Housing Market Barriers 

The diminishing supply of affordable housing in the Orlando metropolitan area is the primary housing 

market barrier to Hispanic homeownership. According to the executive director of HANDS, the 

housing affordability problem in Orlando results from both rapidly appreciating land values and the 

low wages that are associated with the tourism industry. According to data from the National 

Association of Realtors®, the median sales price of an existing single family home increased sharply 

from $145,100 in 2003 to $243,600 in 2005 – an increase of 68 percent in just two years. The 

executive director estimates that housing values appreciate by about 4 percent annually, but wages in 

the tourism industry lag behind and appreciate by only 2 percent yearly. The affordable housing 

stock in the downtown Orlando area is further constricted by the conversion of existing affordable 

apartments into higher-end condominiums for retiring seniors and other households from outside of 

Florida who purchase a summer home in Central Florida. Indeed, the lack of affordable housing is 

repeatedly cited as the most important barrier in follow-up surveys that HANDS conducts with clients 

120 days after completing their homeownership education program. 

The executive director at HANDS also suggests that many Hispanics are unwilling to move into 

neighborhoods where they are not the predominant racial/ethnic group. Most Hispanics prefer to 

move into neighborhoods where their friends and families live and where people share their 

traditions. Yet, many Hispanics can only qualify for homes that cost around $150,000, and such 

homes tend to be located in predominantly African-American neighborhoods. These preferences 

have also made the organization’s housing development work more difficult because many of their 

land acquisitions are located in these same inexpensive neighborhoods. The executive director 

suggests that Hispanics would prefer to rent an apartment in a neighborhood that is predominantly 

Hispanic rather than own a home in a neighborhood that is predominantly African-American or white. 

Thus, the neighborhood preferences of Hispanics limits the neighborhoods where Hispanics are 

willing to look for homeownership opportunities. 

This view is further supported by the president of the NAHREP Orlando chapter who also 

acknowledges that some Hispanics limit their housing opportunities by refusing to live in 

neighborhoods that are either predominantly African-American or predominantly occupied by a 

different Hispanic group. For example, some Cubans would rather live with other Cubans, and if 

given a choice to buy a home in a neighborhood that is predominantly African-American or Mexican, 

they will chose to remain renters in a majority Cuban neighborhood. Yet, there are very few 

affordable homes available in neighborhoods that also satisfy Hispanics neighborhood preferences. 

Mortgage Market Barriers 

The most important mortgage market barrier is the lack of credit or poor credit. As part of their 

services, housing counseling agencies pull a client’s credit reports. They often find that clients have 

open collections on their credit report that must be paid, disputed, or otherwise addressed. Younger 

Hispanics are especially overloaded with debt, and several providers note that it is common to have a 

young Hispanic with $13,000 or more in debt. The most common forms of debt include: car loans, 

credit cards, gym memberships, and payday loans. Older Hispanics are increasingly confronting 

large medical collections. Payday loans are especially pernicious, because these establishments often 

target Hispanic neighborhoods and charge exorbitant interest rates. Service providers said that some 

debt is “good debt” because Hispanics who are able to demonstrate a capacity to carry and pay their 

Chapter 2. Orlando, FL Case Study 

21 
debt are able to develop a good credit history. However, excessive debt can be detrimental to their 

chances of becoming homeowners; some Hispanics are “simply way over their head in debt.” 

Service providers also suggest that Hispanics are suspicious about the mortgage qualification process, 

and providers attribute this apprehension to the increasing number of unscrupulous mortgage brokers 

in Central Florida. According to several service providers, the number of mortgage brokers has 

exploded throughout Central Florida over the past several years, and the number of scams and 

dishonest practices has also increased. They feel that Hispanics have been targeted by these mortgage 

brokers because they are viewed as particularly vulnerable. As a result, many clients that access these 

service providers have preconceived fears about being taken advantage of and often ask staff: “what 

do you get out of this?” According to the ACORN Housing counselor, many clients come to them 

after “they’ve been burned” by a mortgage broker and many are leery about the integrity of the 

homeownership process and the various industry stakeholders. 

Despite these challenges, staff believe that some traditional barriers within the mortgage market 

industry are being adequately addressed, especially in terms of the availability of mortgage products 

that are tailored to low-income households. For example, the NAHREP real estate agent has 

witnessed an increase in the use of “no doc” products that rely mostly on an applicant’s credit score, 

cash reserves, and demonstrated ability to pay bills on time to be eligible for these products. These 

products de-emphasize underwriting guidelines that have traditionally served as barriers to qualifying 

for a loan (e.g., documenting income and employment) among Hispanics that change jobs frequently. 

The president of the NAHREP Orlando chapter also believes that an increase in the use of multiple 

co-signers on a loan has contributed to higher homeownership rates among Hispanics and decreased 

the chances of defaulting on a loan. Many Hispanics have been able to sustain their tenure as 

homeowners because multiple family members live in the same house and contribute to the financial 

burden associated with owning a home. According to the NAHREP real estate agent, the Orlando 

metropolitan area may be somewhat unusual, because Orlando attracts family members and friends 

from across the country and from abroad to create extended families. This creates greater 

opportunities for Hispanics to live together, purchase a home, and maintain homeownership. 

Indeed, migration patterns play an important role in understanding homeownership rates and barriers 

in Orlando. For example, staff from ACORN Housing believe that migration patterns explain why 

Orlando has relatively higher homeownership rates when compared to other Hispanics in the U.S. 

even though housing costs are fairly expensive. Hispanics from the North (e.g., Boston and Chicago) 

and from Miami are moving to Central Florida and these Hispanics generally are better off financially 

and are able to purchase homes in Central Florida. Indeed, Census 2000 data suggests that 69 percent 

of Hispanics in the Orlando metropolitan area were in a different house in 1995, and among these 

Hispanics, 26 percent came from a different state (more than half of them from the Northeast). 

According to the housing counselor, these Hispanics also tend to be more educated about the 

homebuying process because they were previously homeowners. 

2.3 Homeownership Services in Orlando, FL 

This section reviews the variety of services offered by organizations that were interviewed in 

Orlando. The section reviews the nature of these services and their ability to promote 

homeownership among Hispanics in the Orlando metropolitan area. Most of these service providers 

offer a comprehensive package of homeownership services—especially the housing counseling 

Chapter 2. Orlando, FL Case Study 

22 
agencies—and have developed small networks among other service providers in Orlando to 

supplement their services, including lenders and real estate agents. These networks tend to be highly 

fragmented among the various service providers, although more formal and coordinated relationships 

have developed recently. Service providers develop their networks of partnering agencies based on 

an agency’s reputation for being professional and trustworthy. Also, all of the housing counseling 

agencies use a complementary approach to service delivery by offering both large group meetings and 

intensive one-on-one sessions. Few organizations have formal, systematic marketing initiatives, 

although most have fostered ties with neighborhood churches to market their services. However, 

most of these providers are operating at full capacity and have limited resources to serve additional 

clients. 

Nature of Homeownership Services 

Exhibit 2-11 describes a variety of services offered by organizations in the Orlando metropolitan area. 

The services are grouped into three categories, based on their relationship to the homebuying process: 

deciding to pursue homeownership, searching for and finding a suitable home, and obtaining 

mortgage financing. Homeownership counseling and financial education are the two primary services 

offered in Orlando that affect a potential Hispanic homebuyer’s decision to pursue homeownership. 

One organization also assists homebuyers directly in searching for a suitable home and another 

organization develops affordable housing. All of the HUD-certified housing counseling agencies help 

prospective homebuyers obtain mortgage financing by providing assistance with the mortgage 

qualification process. One agency offers post-purchase counseling. All of these organizations 

provide referrals to other service providers as needed. 

Deciding to Pursue Homeownership 

Several organizations interviewed in the Orlando metropolitan area are providing services designed to 

bridge the homebuying information gap. ACORN Housing, HANDS, and MOUL all focus on 

expanding homeownership opportunities among Hispanics by providing formal homeownership 

counseling and financial education courses to the Hispanic community. The NAHREP real estate 

agent also helps to educate clients about the homebuying process, albeit informally and on a case-bycase basis. 

Homeownership Counseling and Financial Education 

The core service among the three housing counseling agencies is to provide homeownership 

counseling and provide financial education. ACORN Housing’s education class is offered in both 

Spanish and English. All clients must attend a one-hour education seminar that provides an 

introduction to the ACORN Housing program, describes the organization’s eligibility guidelines, and 

explains the step-by-step process of purchasing a home. Clients also learn what types of information 

will be required to complete the process, what will be expected of them, and what clients can expect 

of ACORN Housing. Following the education seminar, clients meet with an intake counselor and 

learn about the requirements of the program. The intake class is offered twice a week, and clients are 

required to attend once. During the intake process, clients are asked to bring documents pertaining to 

their income and financial status: 

• Completed program application and budget sheet; 

• Copy of picture ID and Social Security Card; 

• One month of current pay stubs for all employment; 

Chapter 2. Orlando, FL Case Study 

23 
1 

• Tax returns for the past two years (1040 and W2); 

• Award letter or verification of any other source of income (e.g., SSI, child support, 

government assistance); 

• Last three months of bank statements for any saving and checking accounts (including 

401K and IRA documentation); and 

• Proof of rent for the past 12 months (e.g., cancelled checks or letter from landlord). 

Exhibit 2-11 

Types of Homeownership Services Offered by Participating Organizations in Orlando, FL 

Homebuying ACORN Metro Orlando 

Stage Type of Service Housing H.A.N.D.S Urban League NAHREP 

Homeownership 1. Deciding to Counseling 

3 3 3

Pursue 

Homeownership Financial Education 3 3 3 

2. Searching For Housing Search 3

and Finding a Affordable Housing Suitable Home Development 

3

Mortgage Qualification 3. Obtaining Process 3 3 3

Mortgage 

Financing Closing Assistance 3 Post-Purchase 

Counseling 

3

Other Referrals 3 3 3 3 

Other1 3 3 

The Metro Orlando Urban League also offers a variety of other services, including: emergency financial assistance with rent 

and utility payments; a workforce program; a teenage pregnancy program; a black-on-black crime prevention program; an outof-school youth program and an employment subsidy program. HANDS also offers tenant-landlord rental counseling. 

Most clients are able to produce all of these documents, but some require the assistance of the 

housing counselor. For example, clients who do not have a bank account are referred to Bank of 

America, a partner organization, and an account is opened for the client. If the client is living with 

his or her parents, the counselor will request a letter from the parent in lieu of a landlord. This 

information is used to develop a financial action plan for each client and to help clients with the 

mortgage qualification process, which is discussed below. 

ACORN Housing also offers a predatory lending class. The predatory lending class begins with a 

general definition of predatory lending, identifies fees to look for that may be indicative of predatory 

lending, and describes common tactics used by predatory lenders in Central Florida. The ACORN 

Housing representative believes that predatory lenders tend to target minority neighborhoods and are 

particularly successful in Hispanic neighborhoods because of language barriers. Hispanics with poor 

Chapter 2. Orlando, FL Case Study 

24 
English skills have trouble signing complicated mortgage financing documents and are especially 

susceptible to predatory lending practices during the execution of mortgage documents. During the 

predatory lending class, the housing counselor will distribute sample documents, and participants are 

asked to identify relevant sections and fees that may indicate whether the loan is considered 

predatory. 

ACORN Housing recently became certified to conduct first-time homebuyer classes, which will be 

modeled on Fannie Mae’s first-time homebuyer program. The classes will cover many of the same 

topics that are discussed in their current education seminars, but will provide more details on the 

different roles and responsibilities of the mortgage lender, real estate agent, home inspector, title 

company, and other stakeholders in the homebuying process. 

A similar process occurs at HANDS. A staff member conducts an intake with each client by phone, 

and the intake worker focuses on obtaining basic information about the client’s household 

composition, financial situation, and credit history. The intake is designed to pre-screen clients who 

may be eligible for an array of downpayment assistance programs offered by the City of Orlando, 

Osceola County, Orange County, Volusia County, and the Florida Housing Finance Corporation. 

Clients who are ineligible to receive downpayment assistance are either served by the organization’s 

rental search assistance program or referred to the area’s network of homeless shelters. Clients who 

are identified as potential homebuyers are scheduled for a 2.5 hour pre-purchase orientation program. 

The orientation program focuses on the eligibility requirements for receiving downpayment 

assistance. These requirements include: 

• Minimum monthly income ($800); 

• Decent credit/payment history (above 506 credit score); 

• Minimum of $1,000 in savings; 

• Reasonable debt ratio (33/40 or a maximum of 33 percent of monthly income spent on 

housing and 40 percent of monthly income spent on all debts); and 

• Sales price cap ($211,500). 

Clients who may qualify for a downpayment assistance program are scheduled for one-on-one credit 

counseling. The one-on-one counseling focuses on a variety of topics, depending on the needs of the 

client, and include developing an action plan (i.e., budget and savings plan), understanding how to 

establish and maintain good credit, and providing foreclosure prevention/loss mitigation counseling. 

The housing counselor pulls the client’s credit report, reviews the report with the client, and develops 

steps to resolve credit issues as needed. The housing counselor suggests that many of the clients are 

unaccustomed to living on a budget and tracking expenses, and thus many are unaware of how they 

spend their money and how to save. The one-on-one sessions are typically two hours in duration and 

the frequency of one-on-one counseling depends on the needs of clients. For example, clients who 

have a previous default on their credit report will be seen two or three times; clients who are receiving 

Section 8 rental assistance often have five or six counseling sessions; and others may need more 

intensive counseling to implement their action plan. Each housing counselor conducts about 20 to 30 

one-on-one counseling session per month. Clients who satisfactorily resolve their credit issues and 

are in a position to qualify for downpayment assistance are then enrolled in the homebuyer education 

Chapter 2. Orlando, FL Case Study 

25 
class. Also, clients who are pre-screened at intake and are ready to buy a home without needing 

individual counseling are scheduled for a homebuyer class. 

The homebuyer education class is required by all the downpayment assistance programs for any client 

using these programs. The homebuyer education class is a 6.5 hour session that is offered twice 

monthly, once in Spanish and once in English. The class is conducted in a classroom setting. The 

classes are typically scheduled and filled over one month in advance. The class is designed to 

introduce attendees to the downpayment assistance programs and to review each step in the 

homebuying process. In particular, housing counselors review the mortgage loan application process, 

the types of documentation that will be required by the bank (e.g., proof of income and credit history), 

the housing search process, and the need to obtain homeowner’s insurance. HANDS invites a real 

estate agent and a title company representative to the homebuyer class to describe their roles during 

the homebuying process and to review a home contract. 

HANDS also participates in Freddie Mac’s “Don’t Borrow Trouble” consumer awareness campaign, 

which combines public education and counseling services to help homeowners avoid predatory 

lending practices. HANDS receives $1,000 from Freddie Mac for every predatory lending session 

that is conducted in Spanish, but HANDS staff say that it is very difficult to convince owners to 

attend these seminars because there are few direct, tangible incentives. 

The Metro Orlando Urban League provides an array of services, although most clients contact MOUL 

for emergency rental assistance. However, all clients are required to enroll in the agency’s credit and 

budgeting classes, because the organization considers that all clients, regardless of their immediate 

needs, can benefit from these classes. The 6-hour budget and credit counseling class is offered once 

monthly in a classroom setting and is based on Freddie Mac’s CreditSmart program. The program 

focuses on 11 key dimensions, all of which are relevant to the homebuying process: understanding 

credit and why it is important; managing money, setting budgeting goals, learning about banking 

services, establishing and maintaining good credit, understanding credit scoring, thinking like a 

lender, avoiding credit traps (e.g., predatory lending and internet scams), restoring poor credit, 

planning for the future, and becoming a homeowner. The bi-lingual CreditSmart curriculum provides 

practical worksheets that, according to the housing manager, are particularly effective for Hispanics. 

For example, the curriculum provides examples of how interest rates affect the true cost of a car loan 

or home mortgage; worksheets for calculating net monthly income and tracking expenditures; a 

sample checkbook register; credit report samples; and worksheets for calculating the debt-to-income 

ratio, mortgage affordability, and home maintenance and replacement costs. 

In conjunction with Freddie Mac’s “Dispel the Myth” Initiative, MOUL has tailored the curriculum of 

its credit counseling to counter a number of common misconceptions about the homebuying process. 

The Orlando chapter of MOUL primarily focuses on recruiting Hispanic clients for this program, as 

the housing manger believes that Hispanics are particularly susceptible to unsupported myths about 

homeownership because of their language barriers. In particular, staff from MOUL address seven 

common myths about the homeownership process: 

1. You need perfect credit. 

2. You must work at the same job for at least three years. 

3. Homeownership is just too risky—it’s not worth it. 

Chapter 2. Orlando, FL Case Study 

26 
4. Lenders share your personal information. 

5. You cannot buy a home if you’re not a U.S. citizen. 

6. You need a downpayment as large as 20 percent. 

7. You need to have a checking or savings account. 

Each of these myths is addressed by MOUL staff during the first hour of the budget and credit 

counseling seminars. Staff debunk these common misconceptions about the homebuying process by 

providing more accurate information on what is required to buy a home. For example, staff will talk 

about the availability of mortgage products that do not require a downpayment or only require three 

percent of the total home value. 

Searching For and Finding a Suitable Home 

Housing Search 

Providing housing search assistance is one of the core services provided by the NAHREP real estate 

agent, but several steps occur before the agent providers this service. The agent begins by 

interviewing the client to understand the household’s lifestyle (e.g., how many children do they have 

and what are their housing and neighborhood preferences), employment history, and financial 

situation. The NAHREP real estate agent emphasizes that there are important sub-cultural differences 

among Hispanics that shape their housing and neighborhood preferences. For example, Hispanics 

from Spain typically like Mediterranean-styled homes, whereas Mexican families tend to prefer more 

rural settings. Hispanics who migrate from northern states prefer the “Florida-looking” homes that 

are typically located in new gated-communities. By contrast, recent immigrants are more comfortable 

in older neighborhoods that are “less fancy” and may have less restrictive neighborhood ordinances. 

Some recent Hispanic immigrants are unaccustomed to living in highly regulated neighborhoods and 

thus look for neighborhoods that have flexible parking regulations and few property restrictions. 

The information collected during the interview is then provided to a mortgage broker who pulls the 

client’s credit history and attempts to identify appropriate mortgage products. Once an appropriate 

product is identified and a maximum mortgage payment is calculated, the real estate agent assists the 

client with the housing search. The housing search is informed by the initial interview and the 

client’s housing and neighborhood preferences. According to the real estate agent, many Hispanics 

are looking for a home that conforms to an old Spanish adage: “bueno, bonito, y barato” or “good, 

nice, and cheap.” Many Hispanics are also concerned about a home’s proximity to work, but are less 

concerned with proximity to churches, schools, shopping centers or other neighborhood amenities. 

ACORN Housing, H.A.N.D.S., and MOUL also provide some assistance with the housing search 

process, albeit less formally or directly. For example, ACORN Housing provides clients with a list of 

preferred real estate agents and encourages clients to use a professional real estate agent from their 

trusted list. None of these organizations assists clients with their housing search. 

Affordable Housing Development 

Developing affordable housing and renovating existing rental apartment complexes are part of 

HANDS mission. The organization’s projects are financed through County bonds, state and federal 

grants, and conventional loans. The organization looks for buildings in poor condition, apartment 

complexes in foreclosure, or opportunities to purchase reasonably priced land on which they can build 

single-family homes for about $105,000 and sell them for $120,000 to $150,000. Last year, the 

Chapter 2. Orlando, FL Case Study 

27 
organization built two single-family homes and rehabilitated 145 multifamily units, which is average 

for any given year. Recent developments include Silver Pines, a single-family community in West 

Orlando that features 80 three- and four-bedroom new homes. The organization has also renovated 

apartment complexes for rental housing, including Lancaster Apartments (145 units), Brentwood Park 

(254 units), and Green Gables (95 units). However, HANDS has found it increasingly difficult to 

find new construction opportunities because the price of land in the Orlando metropolitan area has 

appreciated greatly over the past few years. 

Obtaining Mortgage Financing 

Mortgage Qualification 

Several organizations interviewed in the Orlando metropolitan area help Hispanic clients with the 

mortgage qualification process. ACORN Housing counselors engage each client with one-on-one 

counseling following the intake class. The counselor will pull each client’s credit report for a 

nominal fee ($20.00) prior to the one-on-one counseling session, and the housing counselor reviews 

the credit report with each client. Based on this review, the counselor and client develop an action 

plan that includes financial goals, describes the client’s financial needs, and determines whether the 

client may be eligible for a mortgage. The counselor uses a housing affordability worksheet that 

calculates a mortgage payment amount assuming that 38 percent of the client’s monthly gross income 

is devoted to housing costs, including mortgage payments and estimated taxes and homeowner’s 

insurance costs. Clients who have significant debt will receive more intensive counseling, which is 

designed to resolve or repair their credit issues and work on maintaining a budget. The frequency of 

one-on-one counseling depends on the needs of the client, but the average client receives two or three 

one-on-one counseling sessions. 

After completing the one-on-one counseling, clients are awarded a pre-qualification letter from 

ACORN Housing that certifies the completion of the program and grants the client access to special 

mortgage products. For example, ACORN Housing partners with Bank of America to provide 

ACORN clients with a first-time homebuyer mortgage product. The product is a conventional 30­

year fixed mortgage with interest rates at 3⁄4 percent below market rate and does not require private 

mortgage insurance. The product also offers flexible credit and income guidelines, 100 percent 

financing, and does not require minimum credit scores. After receipt of the pre-qualification letter, 

clients begin their search for housing. 

A similar process occurs at HANDS. After completing the homebuyer education class, clients are 

given a certificate verifying the completion of the course, which clients can then use to negotiate with 

any mortgage lender. HANDS staff report that some counseling providers in Orlando retain the 

certificate on behalf of the client as a way to encourage clients to use a particular lender that partners 

with the organization. That is, clients are not given the certificate to verify that they have completed 

a certified homeownership-counseling program and thus are unable to “shop around” for mortgage 

products on their own. It is unclear whether this practice is intended to shield clients from predatory 

lenders, or whether this practice is motivated by less principled reasons. The HANDS certificate also 

grants access to a variety of downpayment assistance programs. For example, the agency regularly 

refers clients to Osceola and Orange Counties’ downpayment assistant programs, which offer 

differing amounts of downpayment assistance to very low-income households depending on their 

income and family size. However, both the executive director and a housing counselor at HANDS 

suggest that these programs are starting to fall short of the needed assistance as real estate prices 

continue to appreciate sharply. 

Chapter 2. Orlando, FL Case Study 

28 
HANDS staff encourage all their clients to stay in contact with their housing counselor as they 

negotiate with different lenders, especially if a lender refuses to serve a client who has been approved 

for downpayment assistance. Staff are available to advise clients as needed. In addition, HANDS 

staff provide mortgage default counseling to clients who are at risk of defaulting on their loans, 

predatory lending classes, and counseling to seniors who are interested in reverse mortgages. 

Clients at MOUL are given the option to sign up for additional one-on-one counseling following the 

conclusion of the budget and credit counseling class. The one-on-one counseling provides 

individualized service by addressing the specific financial or credit issues that confront clients. The 

housing counselor will develop a detailed budget with each client, obtain a copy of a client’s credit 

report, and review the credit report with the client. All clients receive an action plan that provides 

specific goals and recommended steps for resolving their financial or credit issues. Also, staff will 

help draft letters to creditors as needed to address issues on their credit report. For example, these 

letters are often developed to negotiate outstanding debt. Some clients may receive only one or two 

sessions of one-on-one counseling because they are nearly ready to purchase a home, but other clients 

have greater needs and may meet regularly for up to one year. 

Closing Assistance 

Among the organizations interviewed, only the NAHREP real estate agent provides formal closing 

assistance. The agent will help the client with the negotiating process (e.g., negotiating the home 

price) and coordinating with the title and insurance companies to facilitate the final closing steps. 

Throughout this process, the representative educates the client by explaining what documents will be 

required, providing guidance on how to complete various forms, and answering questions as needed. 

Staff from ACORN Housing, HANDS, and MOUL are also available as needed to answer questions 

throughout the closing process, but these organizations take a less active role at this stage in the 

homebuying process. 

Service Provision and Outreach 

This section describes the scale of services delivered by each organization, the level of service 

coordination among service providers in the metropolitan area, and the types of outreach that these 

organizations conduct to market their services. The section also discusses the perceived demand for 

their services. 

Service Provision 

At ACORN Housing, most clients are referred to the organization either by mortgage lenders or 

through word-of-mouth from previous clients. In their first full year of operation ACORN Housing 

successfully placed 24 clients into homes out of 320 total clients (or approximately an 8 percent 

success rate) and most were Hispanic. ACRON Housing currently has approximately 300 active 

client cases, and the goal is to double the number of clients served in the coming year. The majority 

of pending cases have unresolved credit issues that require more intensive counseling and time to 

adequately address these issues. 

According to the housing counselor, each service offered by ACORN Housing has advantages and 

disadvantages that vary depending on the needs of the client. For example, the one-hour education 

seminar provides a general overview of how to buy a home in the shortest amount of time. The firsttime homebuyer class is particularly effective at helping clients understand their overall financial 

Chapter 2. Orlando, FL Case Study 

29 
management goals and developing appropriate budgeting strategies to plan for homeownership. The 

predatory lending class is less useful as a preventive intervention strategy because most clients who 

attend this class have already been the victims of predatory lending. These clients must refinance out 

of their predatory loan, and ACORN Housing staff will assist clients throughout the refinancing 

process. Overall, the ACORN Housing counselor prefers the one-on-one counseling because it offers 

individualized counseling to meet the specific needs of each client and because it is more flexible to 

schedule than the classroom sessions. One-on-one counseling is labor intensive and viewed by staff 

as less efficient if there is a waiting list for services. 

Similarly, most clients that receive housing counseling services through HANDS are referred either 

by real estate agents, mortgage companies, downpayment assistance programs or through word-ofmouth. Overall, HANDS served 4,126 clients in FY2004-2005, and 1,758 clients attended one of 

their homebuyer education classes. About 15 percent of these attendees successfully became 

homeowners, although many clients need more than 12 months to close on a property. The success 

rate declined from previous years’ rates, which typically range between 23 and33 percent, because of 

increasing affordability issues associated with rapidly escalating house prices in Central Florida. 

Staff from HANDS suggest that they need to work harder to build more affordable housing, but the 

organization is having difficulty identifying reasonably-priced properties to acquire. The 

organization is also having a difficult time finding a bi-lingual professional who can provide default 

and reverse mortgage counseling. 

Most clients learn about MOUL either through word-of-mouth or through MOUL’s active role in 

neighborhood churches throughout Orlando. From July 2003 through June 2004, MOUL served 

6,531 clients, and the organization is currently operating at full capacity. The homeownership 

success rate among Hispanics is unknown. However, the housing manager suspects that the rate is 

higher among Hispanics when compared to other groups because Hispanics are particularly 

committed to becoming homeowners once they enter the program. The housing manager was unable 

to explain why Hispanic clients are more committed to completing the homebuying process than 

other groups. Also, the housing manger believes that the one-on-one counseling is particularly 

effective because the individualized attention allows clients to ask questions that they would 

otherwise not ask in a public (or classroom) setting. Many clients have sensitive questions about their 

current financial status, previous credit issues, or about their personal situation that can be articulated 

and addressed only in a private, one-on-one counseling session. 

The NAHREP real estate agent similarly relies on word-of-mouth for most of her clients. The 

Hispanic agent currently has 6 active client files and only 2 are in a position financially to purchase a 

home. The agent suspects that only 1 of these clients will close on a home in the near future and the 

client is Hispanic. Overall, the agent believes that homeownership counseling services must be 

viewed more broadly to include the educational needs of both clients and industry professionals. 

According to the real estate agent, the housing and mortgage market industry is increasingly aware of 

the educational needs of Hispanic clients, but the educational needs of real estate professionals are 

poorly understood. Real estate professionals, especially agents working in the Orlando metropolitan 

area, need cultural sensitivity training to appreciate the cultural differences between Hispanics and 

other populations, as well as the various subcultural nuances among different Hispanic nationalities. 

Partnerships and Service Coordination 

Partnerships with other service providers in the Orlando area play an important role for all the 

providers in the case study. ACORN Housing relies on several formal partnerships with HUD, 

Chapter 2. Orlando, FL Case Study 

30 
Fannie Mae, and Bank of America, as well as numerous informal partnerships with Metro Orlando 

Urban League, Latino Leadership, individual leaders in the religious community, industry leaders 

(e.g., title company and insurance representatives), and an affordable housing developer. ACORN 

Housing’s relationship with Bank of America has been ongoing for many years, and the housing 

counselor views their product as the most flexible in Orlando. 

Similarly, HANDS partners formally and informally with many different organizations. HANDS 

participates in the local 211 program, serving as the designated housing agency. Local 211 programs 

typically serve as emergency hotlines that are available 24-hours a day and help coordinate the 

referral of services across the metropolitan area. As the main housing agency in the 211 program, 

HANDS receives over 120 calls monthly from clients seeking housing assistance. Clients are 

screened and eligible persons are provided with support, usually assistance with finding an affordable 

apartment. In 2004, HANDS completed over 500 searches for affordable apartments for low-income 

households. Clients with very low incomes (below $800 monthly) are ineligible for HANDS’ 

services and are referred to the area’s network of homeless shelters. As a result of their involvement 

in the 211 program, HANDS has developed partnerships with the Orlando’s Homeless Coalition, 

Catholic Charities, and any type of transitional shelter that has clients graduating from their programs 

and seeking affordable housing. However, staff suggest that few clients that access HANDS via the 

211 system are Hispanic. Hispanics are much more likely to access HANDS for their housing 

counseling services rather than for their affordable housing search assistance. This may suggest that 

Hispanics have more community resources (e.g., family and friends) to rely on for emergency 

housing assistance and are thus less likely to seek assistance via the 211 system. 

According to HANDS staff, the metropolitan-wide network of service providers is highly fragmented, 

but the HANDS’ network is highly coordinated. HANDS participates in a housing roundtable that 

meets monthly. The roundtable is composed of six to eight organizations interested in exchanging 

information about the housing needs of low-income households in the Orlando metropolitan area. 

HANDS limits their referrals to these providers because they are confident these providers will follow 

through with their clients. Trust in the quality of services and in the integrity of a service provider 

determines who is part of HANDS’ referral network. As a result, HANDS representatives believe 

their referral network is much different than another housing counseling agency’s referral network. 

This implies that the metropolitan-wide network of service providers is fragmented because providers 

do not trust one another to serve their clients professionally. 

At MOUL, the housing manager focuses on cultivating relationship with churches in the Orlando 

area. For example, several months ago representatives from MOUL were invited to conduct a 

presentation at Faith World, a large interdenominational congregation in Central Florida, and about 

1,100 people signed up for the agency’s budget and credit counseling seminar. MOUL purchased a 

few radio advertisements to market the collaboration with Faith World. Over the next three months, 

staff from MOUL conducted several seminars, and nearly 900 people received certificates for 

completing the education classes. Certificate-holders became eligible for a variety of downpayment 

assistance programs in the Orlando area, and an estimated 500 people became first-time homeowners. 

MOUL also partners with the Orlando Housing Authority and several mortgage companies that have 

been approved by the city and the county. There are approximately 200 approved loan officers in the 

Orlando area. MOUL also partners with several real estate agents who are interviewed and selected 

by MOUL staff, as well as with home inspectors, title companies, and insurance companies that are 

referred by the lender. Each of these stakeholders are invited to participate in MOUL’s budget and 

Chapter 2. Orlando, FL Case Study 

31 
credit counseling classes and to talk about their role in the homebuying process. Many of these 

stakeholders have been working with MOUL for many years. 

The housing manager believes that the network of service providers in the Orlando metropolitan area 

has been fragmented in the past but is increasingly coordinated. MOUL participates in the Orlando 

homeownership counseling collaborative and the housing roundtable, which are two important venues 

that bring representatives from interested organizations together to discuss recent issues in the 

housing and mortgage markets. These venues are also an opportunity for service providers to vet the 

services provided by other providers throughout Orlando and thus formalize their network of trusted 

service providers. 

Trust is also very important to the NAHREP real estate agent who prefers to work with a small group 

of service providers that have established reputations for being professional and ethical. Most of 

these providers are members of the Association. Among the agent’s most important relationships are 

several mortgage brokers who can “shop” clients to various mortgage lenders. According to the 

agent, shopping clients to lenders is more likely to result in an appropriate mortgage product with the 

best terms. The real estate agent believes, however, that trust among service providers is subjective 

and often secondary to the considerable competition that exists between Hispanic service providers in 

Orlando. The competition is mostly associated with “turf” issues, which limits the willingness of 

service providers to coordinate their services with other providers regardless of how trustworthy they 

may be. For example, NAHREP does not have any formal partnership or relationships with any 

housing counseling agency in the Orlando area despite attempts to contact these organizations. 

However, the agent also acknowledged that real estate professionals have not been very proactive in 

the past because they are focused on identifying clients that are ready to purchase immediately, rather 

than waiting six months for a client to successfully complete a certified housing counseling program. 

Also, clients that use these services typically cannot afford average- or moderately-priced homes, and 

the few homes that these clients can afford are either located in distressed neighborhoods or located 

along the fringes of the metropolitan area. Neither of these locations are appealing to prospective 

Hispanic homebuyers. Thus, the NAHREP real estate agent regrettably admits that some real estate 

professionals view these clients as a “waste of their time” and steer away from engaging them or the 

service providers that assist them. 

Marketing Homeownership Services 

Few providers engage in systematic marketing of their services, and resources for marketing are 

limited among all the organizations in the case study. Nonetheless, each organization markets their 

services through ad hoc, grassroots organizing. For example, ACORN Housing began their outreach 

efforts in earnest last year and started by contacting bank managers and asking them for a list of 

community leaders. Pastors and other religious leaders were often identified by bank managers. 

ACORN Housing counselors subsequently conducted over 20 education classes in Orlando area 

churches over the past year. ACORN Housing counselors also participate in local housing fairs and 

distribute materials about their program. The organization has had some marketing successes 

recently, for example, a real estate agent that partners with the organization placed an ad in a local 

Spanish newspaper and an open house event at the ACRON Housing offices was featured in another 

local Spanish newspaper. These activities resulted in substantial increase in Hispanic clients. 

However, the housing counselor said that non-profit organizations such as ACORN Housing must be 

creative about their marketing approach because there is very little money available for these types of 

activities. In addition, the decentralized Hispanic leadership in Orlando poses another obstacle to 

Chapter 2. Orlando, FL Case Study 

32 
marketing their services effectively. Unlike the African-American community in Orlando, the 

Hispanic community lacks a centralized leadership that can serve as a central entry point for service 

providers who want to engage the Hispanic community. Instead, the Hispanic leadership is 

decentralized and characterized by many locally-based leaders throughout the metropolitan area, 

which makes it more difficult for service providers to identify and market their services effectively 

and efficiently. 

For both HANDS and MOUL, their marketing activities are primarily imbedded in the partnerships 

they develop. These organizations rely on their trusted network of service providers to promote their 

services. HANDS also spent approximately $3,100 in marketing (e.g., newspaper advertisements and 

participating in fairs). All the service providers interviewed in Orlando believe that word-of mouth is 

the best way to market their services. Word-of-mouth is effective because a level of trust is created a 

priori between the service provider and the client. By contrast, advertisements are less effective 

because some people who respond to these advertisements are simply “tire kicking” and are trying to 

see if one service provider is different from another provider. Mainstream advertisements are also 

costly. 

Demand for Homeownership Services 

The potential pool of Hispanic renters that could benefit from the services described above is large. 

Exhibit 2-12 presents the distribution of Hispanic renters and homeowners in the Orlando 

metropolitan area as a percent of the area median income (AMI). Most service providers in the case 

study serve Hispanics earning 50-80 percent of AMI, although service providers will serve any 

Hispanic that seeks their services, and the NAHREP real estate agent does not target clients with 

particular income levels. As the exhibit suggests, Hispanics in this income category represent 25 

percent of all Hispanic renters (or 9,297 households), and thus constitute a fairly large pool of 

prospective homebuyers. Moreover, over one-fifth (21 percent) of all Hispanic renters in Orlando 

earn 80-120 percent of AMI. This group of renters do not qualify for many downpayment assistance 

programs and may not qualify for services from some of the service providers interviewed in Orlando 

(e.g., ACORN Housing has an income cap of $55,100 to be eligible for the agency’s programs). 

Thus, there is a large group of Hispanic renters that are in a better position to purchase a home but are 

not receiving services or financial support needed to become homeowners. 

Exhibit 2-12 

Distribution of Hispanic Renters and Homeowners by Percent of Area Median Income in 

Orlando, 2000 

<50% of AMI 

50-79.9% of AMI 

80-119.9% of AMI 

>=120% of AMI 

Total 

Hispanic Renters 

Number Percent 

14,373 38% 

9,297 25% 

7,857 21% 

6,030 16% 

37,557 100% 

Hispanic Homeowners 

Number Percent 

7,973 18% 

8,319 19% 

11,714 26% 

16,890 38% 

44,896 100% 

Total 

Number Percent 

22,346 27% 

17,616 21% 

19,571 24% 

22,920 28% 

82,453 100% 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample 

Chapter 2. Orlando, FL Case Study 

33 
Indeed, according to all the service providers interviewed in Orlando, the demand for services among 

Hispanics is growing. Although ACORN Housing expects to increase its client base in the coming 

year, the other two housing counseling agencies are operating at full capacity. Staff from both 

HANDS and MOUL state that they do not have enough resources to meet the growing demand. For 

example, the executive director of HANDS comments that the organization typically uses most of its 

HUD funding by June, even though it is intended to support the organization through September. The 

housing manager at MOUL continues to receive inquires from people who heard about the Faith 

World seminars, which occurred several months ago. Also, the Hispanic agent describes the demand 

for services by recalling an event sponsored by NAHREP about eight months earlier in partnership 

with Univision, a major Spanish television network nationally. The event was a television call-in 

program called “Linea Ayunda” or “Help Line.” The call-in show was set up in telethon format; in 

which people could call a 1-800 number and ask questions about the homebuying process. Telephone 

operators received over 1,000 phone calls during the 1-hour program. Staff at all of these service 

providers expect the number of Hispanic clients to increase considerably in the future as the Hispanic 

population in Central Florida continues to grow dramatically. 

It is unclear whether the demand for homeownership services has created a service gap in Orlando 

because of the fragmented nature of the service delivery system in Orlando. Nonetheless, all of the 

service providers agree that their service networks are severely strained and the long-term capacity to 

serve the growing Hispanic population is questionable. Recent analyses of Census population 

estimates for 2004 suggest that the Orlando metropolitan area had the 12th-largest gain in Hispanics 

since 2000 and Hispanic growth accounts for 47 percent of the metropolitan area’s overall growth 

(Frey, 2006). This tremendous growth will likely impinge on the service system’s ability to 

adequately serve potential Hispanic homebuyers. 

2.4 Conclusions 

The interviews with several key organizations in the Orlando metropolitan area serving Hispanics 

highlight three main themes. First, homeownership rates and gaps are shaped by the demographic 

and socioeconomic characteristics of Hispanics living in Orlando. Although most Hispanics in 

Orlando fare better than their counterparts nationally, the homeownership rate among Puerto Ricans 

appears to be driving the significantly higher rates and smaller gaps in Orlando when compared to 

national trends. Puerto Ricans represent over half the total Hispanic population in Orlando and, 

unlike other Hispanic groups, all Puerto Ricans are legal citizens. Their legal status grants them 

access to mortgage products that are not available to undocumented Hispanics. Also, many Hispanics 

work in the tourism industry that may not pay enough for them to purchase a home on their own, but 

may pay enough to keep Hispanics eligible for low-income downpayment assistance programs. 

Indeed, compared to the national income distribution, the Hispanic income distribution in Orlando 

shows a larger share of low- and moderate-income Hispanic households and a lower share of very 

low- and high-income households. 

Second, service providers operate within their preferred network of providers because of the lack of 

trust among providers metropolitan-wide. The large Hispanic population in Orlando has potentially 

created more opportunities for housing and mortgage market actors to take advantage of this 

population. Nearly all interviewed staff discussed the questionable practices of some mortgage 

brokers and real estate agents, which has caused many of them to recoil into their preferred network 

Chapter 2. Orlando, FL Case Study 

34 
of providers. As a result, the broader network of service providers is fragmented and uncoordinated. 

However, recent efforts to bring interested agencies together to discuss the needs of low-income 

households (e.g., the homeownership counseling collaborative and the housing roundtable) are 

building trusting relationships and laying the foundation for improved service coordination. 

Third, despite the best efforts of service providers in Orlando, Hispanic homeownership rates may 

continue to lag behind whites because of the interaction between housing affordability and Hispanics’ 

neighborhood preferences. Several interviewed staff mentioned that Hispanics prefer to move into 

neighborhoods where their friends and families live, and where neighbors share their traditions. Yet, 

the affordable housing stock is largely concentrated in neighborhoods that are predominantly 

populated by African-Americans or a different Hispanic group. As a result, Hispanic homeownership 

rates may continue to be depressed because Hispanics may opt to rent in a neighborhood that is 

predominantly their Hispanic group, rather than own a home in a neighborhood that is predominantly 

African-American or other Hispanic. 

Chapter 2. Orlando, FL Case Study 

35 
Chapter 2. Orlando, FL Case Study 

36 
Chapter Three 

San Antonio, TX Case Study 

This chapter reviews some of the main efforts to improving homeownership opportunities among 

Hispanic households in the San Antonio metropolitan area. The chapter proceeds in four sections. 

The following section describes the demographic characteristics of Hispanics in the San Antonio 

metropolitan area and presents their homeownership rates and gaps. The section also provides an 

overview of the service providers interviewed for the case study. Section 2 reviews the key barriers 

to homeownership that were identified by interview participants, and Section 3 describes the services 

offered by the interviewed organizations. The concluding section summarizes the main themes 

brought out by the San Antonio case study. 

3.1 Hispanics, Homeownership Rates, and Service Providers in 

San Antonio 

Hispanic Profile 

Hispanics constitute a large proportion of the total population in San Antonio (45 percent). Exhibit 3­

1 shows the country of origin for Hispanics living in San Antonio. The majority are Mexican (72 

percent), followed by “other” Hispanics (25 percent).3

 Puerto Ricans, Cubans, Dominicans, Spanish, 

Central Americans and South Americans collectively represent less than four percent of the Hispanic 

population. 

Exhibit 3-1 Exhibit 3-2 presents the racial 

Country of Origin for Hispanics in San Antonio, 2000 characteristics of Hispanics and nonHispanic in San Antonio and in the U.S. 

Others The racial composition of Hispanics in 24.6% San Antonio is similar to the composition 

of Hispanics nationally, although a larger 

percentage of Hispanics identify 

Puerto Rico, themselves as white Hispanics in San Domican 

Republic, Cuba, Antonio. In addition, fewer Hispanics Spain, and Central identify with some other race (31 percent or South America Mexican 3.4% compared to 41 percent). 72.0% 

In the 2000 Census, write-in responses that were not classified into one of the response categories 

associated with twenty different countries were coded as “Other Central American,” “Other South 

American,” or “Other Spanish or Latino.” It is unclear what types of write-in responses would be classified 

as “Other Spanish or Latino.” Most Caribbean countries are not included in the list of twenty response 

categories, but it is unlikely that these countries collectively comprise 15 percent of Hispanic households in 

the U.S. 

Chapter 3. San Antonio, TX Case Study 

37 

3 
Exhibit 3-2 

Racial Characteristics of Hispanic and Non-Hispanic Households in San Antonio, TX and the 

U.S., 2000 

Race 

White 

Black or African American 

American Indian/Alaska Native 

Asian 

Native Hawaiian/Pacific Islander 

Some other race 

Two or more races 

Total 

San Antonio, TX 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

63.2% 82.8% 

0.4% 11.9% 

0.9% 0.6% 

0.1% 2.5% 

0.0% 0.1% 

31.4% 0.2% 

4.0% 1.9% 

239,364 309,522 

U.S. 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

50.4% 82.1% 

2.0% 12.3% 

1.0% 0.7% 

0.3% 3.2% 

0.1% 0.1% 

40.5% 0.1% 

5.8% 1.5% 

9,187,972 96,292,129 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample 

Exhibit 3-3 displays the socio-economic characteristics of Hispanic and non-Hispanic households in 

San Antonio and in the U.S. When compared to Hispanics nationally, a slightly higher percentage of 

Hispanics in San Antonio earn below $40,000 (62 percent compared to 58 percent nationally) and, 

accordingly, a slightly lower percentage of Hispanic households earn above $40,000 (38 percent 

compared to 42 percent nationally). By contrast, the majority of non-Hispanic households in San 

Antonio (57 percent) and non-Hispanics nationally (54 percent) earn $40,000 or greater annually. 

Exhibit 3-3 also suggests that Hispanic households in San Antonio are more educated than their 

counterparts nationally. A higher percentage of household-heads in San Antonio have completed a 

high school education when compared to Hispanics nationally (63 percent compared to 55 percent). 

However, disparities in higher education between Hispanics and non-Hispanics in San Antonio are 

evident. Eleven percent of Hispanics have bachelor degrees or higher compared to 35 percent of nonHispanic head of households. 

Similar to the national trends, Hispanic households in San Antonio are much younger than their nonHispanic counterparts. Nearly 30 percent of Hispanic households in San Antonio are under age 35 

and only 6 percent are over 75. However, Hispanics in San Antonio tend to be older than Hispanics 

nationally. Twenty-seven percent of Hispanics in San Antonio are over 55 compared to 20 percent of 

Hispanics nationally. Exhibit 3-3 also suggests that a higher percentage of Hispanic households in 

San Antonio are married couples with children (31 percent) compared to their non-Hispanics 

counterparts nationally (23 percent). 

Chapter 3. San Antonio, TX Case Study 

38 
Exhibit 3-3 

Socio-Economic Characteristics of Hispanic and Non-Hispanic Households in San Antonio, 

TX and the U.S., 2000 

San Antonio, TX U.S. 

% Hispanic 

Households 

% nonHispanic 

Households 

% Hispanic 

Households 

% nonHispanic 

Households 

Income 

<$10,000 

$10,000 and <$20,000 

$20,000 and <$30,000 

$30,000 and <$40,000 

$40,000 and <$50,000 

$50,000 and <$60,000 

$60,000 and <$70,000 

$70,000 or more 

13.2% 

17.9%

16.5%

14.3%

11.3%

8.3%

5.3%

13.3%

7.4% 

10.5% 

12.3% 

12.7% 

10.8% 

9.7% 

7.5% 

29.1% 

12.7% 

15.9% 

15.8% 

14.0% 

10.9% 

8.4% 

6.2% 

16.2% 

9.3% 

12.3% 

12.7% 

12.2% 

10.6% 

9.0% 

7.3% 

26.6% 

Education 

Less than High School 

High school graduate, or GED 

Some college, no degree 

Associate degree 

Bachelors degree 

Professional/Graduate degree 

36.8% 

25.3% 

21.6% 

5.0%

7.6%

3.8% 

9.6% 

20.9% 

27.6% 

7.0% 

21.2% 

13.8% 

45.6% 

21.8% 

17.1% 

4.4% 

7.1% 

4.1% 

16.3% 

27.8% 

22.5% 

6.2% 

16.9% 

10.3% 

Age 

<30 

30-34

35-44

45-54

55-64

65-74

75+ 

17.8% 

11.7% 

24.5% 

19.4% 

11.4% 

8.8% 

6.3% 

11.6% 

9.1% 

22.3% 

20.1% 

13.9% 

11.5% 

11.4% 

20.8% 

14.4% 

26.9% 

18.0% 

9.7% 

6.5% 

3.8% 

12.0% 

8.9% 

22.2% 

20.4% 

13.9% 

11.5% 

11.1% 

Household Type 

Married couples with children 

Married couples w/o children 

Other Families with children 

Other Families without children 

Other1 

Total Number of Households 

31.1% 

23.0% 

14.2% 

10.4% 

21.3% 

239,364 

22.8% 

31.6% 

7.3% 

5.8% 

32.5% 

309,522 

37.8% 

19.9% 

14.7% 

9.2% 

18.3% 

9,187,972 

23.1% 

30.4% 

8.1% 

6.4% 

32.0% 

96,292,129 

Other household types include singles; separated, divorced, widowed people (without own children); and other 

unrelated people living together (without own children). 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Chapter 3. San Antonio, TX Case Study 

39 

1 
1 

Exhibit 3-4 

Immigration and Citizenship Characteristics of Hispanic and Non-Hispanic Households in 

San Antonio, TX and the U.S., 2000 

San Antonio, TX U.S. 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

Nativity 

Native born 

Foreign born 

77.7% 

22.3% 

92.8% 

7.2% 

47.0% 

53.0% 

91.9% 

8.1% 

Citizenship Status 

U.S. citizen 

Not a U.S. citizen 

88.9% 

11.1% 

98.1% 

1.9% 

67.8% 

32.2% 

96.9% 

3.1% 

English Speaking 

Yes, speaks only English 

Yes, speaks very well 

Yes, speaks well 

Yes, but not well 

Does not speak English 

18.1% 

52.8% 

17.6%

8.2% 

3.3% 

90.3% 

7.2% 

1.6% 

0.8% 

0.0% 

17.8% 

37.1% 

19.9% 

17.8% 

7.6% 

91.4% 

5.3% 

2.0% 

1.1% 

0.2% 

Years in the U.S. for foreign 

born1 

0-5 years 

6-10 years 

11-15 years 

16-20 years 

21+ years 

10.6% 

9.2% 

12.8% 

15.7% 

51.8% 

11.4% 

9.0% 

8.5% 

9.4% 

61.7% 

12.8% 

14.8% 

18.7% 

16.2% 

37.4% 

14.5% 

12.8% 

11.8% 

12.3% 

48.6% 

Only includes households with immigrant heads of household, defined as any person who was foreign born, including 

persons born in Puerto Rico or other U.S. outlying areas and persons born abroad to U.S. parents. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Exhibit 3-4 (above) presents the immigration and citizenship characteristics of Hispanic and nonHispanic households in San Antonio and in the United States. When compared to Hispanic 

households nationally, Hispanics in San Antonio are significantly more likely to be native-born (78 

percent) and U.S. citizens (89 percent) compared to Hispanics nationally (47 percent and 68 percent, 

respectively). Also, the overwhelming majority of Hispanic households in San Antonio (89 percent) 

speak English well or better, which is significantly higher than the national Hispanic proportion (75 

percent). Indeed, 71 percent of Hispanic households in San Antonio speak ‘only English’ or speak 

English ‘very well’ compared to 45 percent nationally. Exhibit 3-4 also demonstrates that a higher 

percentage of Hispanics in San Antonio have lived in the U.S. for 21 or more years when compared to 

their counterparts nationally (52 percent compared to 37 percent). 

Chapter 3. San Antonio, TX Case Study 

40 
1 

Homeownership Rates 

The following section explores homeownership rates and gaps for Hispanics in San Antonio. Exhibit 

3-5 presents homeownership rates and gaps in San Antonio by race. Unlike national figures, 

Hispanics in San Antonio have the highest homeownership rates when compared to other minority 

groups. The Hispanic homeownership rate in San Antonio is 59 percent, compared to 48 percent 

among non-Hispanic Blacks, 56 percent among non-Hispanic Asians, and 48 percent among other 

non-Hispanic races. Furthermore, while the homeownership rates of other minority groups are 

similar to national figures, the rate for Hispanics in San Antonio is 13 percentage points higher than 

the national Hispanic rate (59 percent compared to 46 percent). 

Exhibit 3-5 

Homeownership Rates and Gaps1

in San Antonio, TX, 2000 

Race

Hispanic 

Non-Hispanic 

Black 

Asian or Pacific Islander 

Other 

White 

Total 

San Antonio, TX U.S. 

 Households Rate Gap Households Rate Gap 

239,364 58.5% -11.1 9,187,972 45.6% -26.8% 

36,859 48.3% -21.3% 11,796,057 46.6% -25.9% 

7,789 55.6% -14.0% 3,181,674 53.1% -19.4% 

8,482 48.6% -21.0% 2,236,977 51.2% -21.3% 

256,392 69.6% 79,077,421 72.5% 

548,886 62.8% 105,480,101 66.2% 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

However, despite these trends, Hispanic homeownership rates in San Antonio lag behind nonHispanic whites (hereafter referred to as “whites”) homeownership rates. The homeownership gap in 

San Antonio is 11 percentage points. Nevertheless, the gap is significantly smaller than the national 

gap, which is 27 percentage points. 

The next section describes how Hispanic homeownership rates and gaps vary by key demographic, 

and socio-economic factors that were identified in the literature as having important effects on 

homeownership rates. The section focuses on factors that describe unique variations in 

homeownership rates and gaps among Hispanics living in San Antonio compared to Hispanics 

nationally. These factors include: level of educational attainment, citizenship, English proficiency, 

and years in the U.S. Other factors—such as age, income, household type, English proficiency, 

nativity, and country of origin—are not reviewed because patterns in San Antonio closely resemble 

national trends.4

 It is important to note that although the patterns associated with these other factors 

See Cortes et al. (2005) for an analysis of national Hispanic homeownership trends. 

Chapter 3. San Antonio, TX Case Study 

41 

4 
1 

are similar, homeownership rates among Hispanics are higher and the gaps are smaller relative to 

Hispanics nationally for each of these demographic characteristics. 

Level of Education 

Exhibit 3-6 displays Hispanic homeownership rates and gaps by level of educational attainment for 

San Antonio, TX. Similar to the national trend, there is a positive association between level of 

educational attainment and homeownership rates. However, the impact of educational attainment on 

homeownership rates among Hispanics in San Antonio is less pronounced when compared to the 

impact of educational attainment on rates nationally. In San Antonio, the impact of educational 

attainment is marginal until an Associates degree is attained. Also, the Hispanic homeownership rate 

increases by 15 percentage points total when comparing the rate among the poorly educate to the rate 

among the most educated. By contrast, the difference in rates nationally is nearly 22 percentage 

points. 

Exhibit 3-6 

Homeownership Rates and Gaps by Level of Education 1

in San Antonio, 2000 

Homeownership 

Rate 

Homeownership 

Gap 

57% 58% 59% 

63% 63% 

70% 

-8% -12% 

-7% -10% -8% -7% 

Less than High School Some College, Associate Bachelors Professional/ 

High School Graduate, or no Degree Degree Degree Graduate 

GED Degree 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

The homeownership gaps in San Antonio are generally stable across all levels of educational 

attainment, ranging between 7 percentage points and 12 percentage points. Compared to national 

patterns, homeownership gaps in San Antonio are significantly smaller across all levels of educational 

attainment. For example, the gap among Hispanics with less than a High School education in San 

Antonio is 8 percentage points and the national gap for the same category is 28 percentage points. 

Gaps nationally are between 17 percentage points (Hispanics with graduate/professional degrees) and 

28 percentage points (Hispanics with less than a high school education). 

Chapter 3. San Antonio, TX Case Study 

42 
1 

Citizenship 

Exhibit 3-7 presents Hispanic homeownership rates and gaps by citizenship status in San Antonio. 

Homeownership rates among Hispanic U.S. citizens are 11 percentage points higher than Hispanics 

who are not U.S. citizens. However, the gap in homeownership rates is smaller for homeowners that 

are not U.S. citizens, only 1.5 percentage points compared to 10 percentage point among U.S. 

citizens. Homeownership rates are much higher and the gaps much smaller for Hispanics in San 

Antonio when compared to Hispanics nationally. Nationally, the Hispanic homeownership rate is 52 

percent for U.S. citizens (with a gap of 21 percentage points) and 32 percent for Hispanic households 

that are not U.S. citizens (with a gap of 17 percentage points). The homeownership rate among 

Hispanics in San Antonio who are not U.S. citizens is 16 percentage points higher and the gap is 15 

percentage points smaller than the national rate. 

Years in the U.S. 

Exhibit 3-8 presents Hispanic homeownership rates and gaps by years in the U.S. for San Antonio. 

The homeownership gaps presented in the exhibit are calculated in relation to the homeownership rate 

for all non-Hispanic immigrants, rather than only non-Hispanic white immigrants. As the exhibit 

suggests, homeownership rates among Hispanics in San Antonio increase steadily as the number of 

years living in the U.S. increases with one exception, a decrease between 11-15 years and 16-20 years 

in the U.S. The overall increase in homeownership rates between Hispanics who have been in the 

U.S. from 0-5 years and Hispanics who have been in the U.S. for 21 or more years is greater than the 

national increase (26 percentage points compared to 20 percentage points). 

Exhibit 3-7 

Homeownership Rates and Gaps by Citizenship1 in San Antonio, 2000 

Hispanic Homeownership Rate Homeownership Gap 

Citizenship 

U.S. Citizen 59.8% -10.0% 

Not a U.S. Citizen 48.3% -1.5% 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Homeownership gaps fluctuate dramatically across these lengths of tenure in the U.S. categories. 

Interestingly, for three tenure ranges (0-5 years, 11-15 years, and 21 or more years in the U.S.). 

Hispanics in San Antonio have higher homeownership rates than their non-Hispanic counterparts. 

Nationally, the gap also fluctuates between intervals, although Hispanics consistently evince a gap 

across all tenure ranges. The two tenure ranges with the largest gaps nationally (11-15 and 21 or 

more years) correspond with the two most successful categories for Hispanics in San Antonio. 

Chapter 3. San Antonio, TX Case Study 

43 
1 

Exhibit 3-8 

Homeownership Rates and Gaps by Years in the U.S. 1

in San Antonio, 2000 

Homeownership 

Rate 

Homeownership 

Gap 

57% 

51% 

70% 

2% 

-17% 

7% 

-4% 

3% 

33% 

24% 

0-5 years 6-10 years 11-15 years 16-20 years 21+ years 

Homeownership gaps are calculated in relation to the homeownership rate of non-Hispanic immigrants with the same 

number of years in the U.S. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Organizations Interviewed in the San Antonio Area 

The remainder of this case study is based on interviews with representatives from four agencies in the 

San Antonio metropolitan area. Interviews were conducted with staff from the following 

organizations: 

Avenida Guadalupe Association 

Avenida Guadalupe Association (AGA) was founded in 1979 as a non-profit neighborhood 

association and has evolved into a community development corporation. AGA developed 

and owns three multi-family rental developments for very low-income seniors (62 years of 

age and older), develops infill housing and offers downpayment assistance for families that 

purchase these homes. The organization also offers pre-purchase and default housing 

counseling for residents of Bexar County, and continues to operate as the neighborhood 

association by holding quarterly community meetings and advocating for the community’s 

interests with city council and city government. AGA is also starting a homeownership 

rehabilitation program to assist low-income homeowners with necessary repairs. The agency 

currently has a budget of about $500,000 annually and seven staff members. The agency’s 

primary catchment area is within the organization’s immediate vicinity, which is about 

34,000 people, but housing counseling services are available to households county-wide. 

AGA’s clients for housing services are typically young, married couples with children. Most 

clients have a high school background and are at about 80 percent of the Area Median 

Income. Households are generally fluent in English and Spanish and are typically a second 

Chapter 3. San Antonio, TX Case Study 

44 
generation Mexican family. AGA’s service area also has a high rate of seniors who were first 

generation immigrants. 

Neighborhood Housing Services of San Antonio 

Neighborhood Housing Services of San Antonio (NHSSA) is a non-profit organization that 

promotes homeownership through affordable housing development, loan servicing, housing 

counseling, and a small rehabilitation program for elderly and disabled homeowners. Clients 

may receive an array of homeownership services, including homeownership counseling, 

downpayment assistance, and post-purchase education for existing or newly constructed 

homes. NHSSA serves the City of San Antonio and Bexar County, but most clients who 

complete their program and successfully purchase a home are within the bounds of Interstate 

410, or in the eastern, western, and southern areas of “inner city” San Antonio. The 

organization has a portfolio of over $13 million in loans, twelve staff, and an $850,000 

annual budget. 

NHSSA’s client population has shifted from being primarily African American to over 90 

percent Hispanic over the past 20 years. NHSSA clients are typically: Hispanic families, just 

over half of which are single mothers and the remainder are mostly couples with children; 

U.S. citizens, and only 3 to 5 percent are permanent resident aliens; high school educated; 

low-income, or about 60 percent of AMI ($26,000 in annual income); fluent or somewhat 

fluent in English and Spanish; and hold hourly wage jobs. In addition, NHSSA has found 

that about one in five clients are illiterate. 

National Association of Hispanic Real Estate Professionals (NAHREP) – San Antonio 

Chapter 

The San Antonio chapter of the National Association of Hispanic Real Estate Professionals 

(NAHREP) was founded in March 2003 and mirrors the mission of the national organization: 

“to increase the Hispanic homeownership rate by empowering the real estate professionals 

that service Hispanic consumers.” NAHREP San Antonio pursues this goal by holding 

regular association meetings, participating in homebuyers’ fairs and seminars, and providing 

an opportunity for real estate professionals to network. The organization seeks to provide 

members with the tools they need to effectively reach out to the Latino community of San 

Antonio. At the end of 2005, NAHREP San Antonio had about 125 members and the 

Association’s goal is to reach 200 members by the end of 2006. A NAHREP real estate agent 

and two loan officers participated in the interview. NAHREP is a volunteer organization and 

each of the three professionals work for different companies. The interview collected 

information about NAHREP’s services as an organization, as well as the services provided by 

each of these interview participants. 

The real estate agent and loan officers representing NAHREP reported that about 60 to 70 

percent of their clients are Hispanic households that are low- to moderate-income. The 

typical annual household income is around $40,000. These households are generally looking 

for homes priced in the $70,000 to $125,000 range and located in neighborhoods throughout 

the city and county. A majority of Hispanic households are Mexican and most are second 

generation immigrants who are U.S. citizens. About half are single mothers, while the 

remainder is comprised of couples with children and other single people. 

Chapter 3. San Antonio, TX Case Study 

45 
Merced Housing Texas 

Merced Housing Texas is a non-profit organization that was founded in 1995 by eight 

congregations of Catholic Sisters “to create and strengthen healthy communities by providing 

quality, affordable, service-enriched housing for individuals and families who are 

economically poor.” Merced Housing has four program areas, including: eight multi-family 

rental properties (five of which are in San Antonio); social services for residents of the multifamily properties; a single-family homeownership program where deteriorating homes are 

acquired, renovated, and sold to low-income families; and an owner-occupied repair program 

for elderly and disabled homeowners. For the single-family homeownership program Merced 

Housing’s service area is typically within the Interstate 410 loop where the older housing 

stock is most in need of rehabilitation. 

Merced Housing Texas typically serves low-income, Hispanic households with the singlefamily homeownership program. Households typically have incomes around $25,000 or 55 

percent of AMI; are Mexican or Mexican-Americans; are U.S. citizens; are younger families 

with children; are high school educated; and are bi-lingual. Clients are typically employed in 

service-oriented or construction jobs which pay an hourly wage. 

The list of HUD-approved counseling agencies identifies eight agencies providing homeownership 

counseling in San Antonio.

5

 Of these, two were interviewed for this study (NHSSA and AGA). 

Based on data on client volumes submitted to HUD, together these agencies accounted for about 10 

percent of the Hispanic housing clients served by all of these HUD-approved agencies and about 7 

percent of all clients attending pre-purchase workshops. However, neither Merced Housing or 

NAHREP are included among these HUD-approved agencies. 

Exhibit 3-9 displays the distribution of Hispanic renters in San Antonio and the locations of each 

interviewed organization.6

 Hispanic renters are concentrated in the central city, particularly to the 

south and west of downtown. Each nonprofit service provider is located in an area that has a high 

percentage of Hispanic renters, suggesting the organizations are geographically situated to assist 

potential Hispanic homebuyers. The only organization that is outside of the inner city boundary of 

Interstate 410 is NAHREP whose members reported that they assist clients in every area of the city. 

5 The list of HUD-approved counseling agencies was obtained from the HUD Web site 

(www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm). 

6 Neighborhoods are represented by census tracts. In the map, tracts are divided into quartiles based on 

Hispanic renters’ share of all households. The quartiles are defined as follows: tracts in the lowest quartile 

have between 0 and 6.1 percent Hispanic renters, the second quartile tracts have between 6.1 and 13.7 

percent Hispanic renters; the third quartile tracts have between 13.7 and 28.1 percent Hispanic renters, and 

the top quartile tracts have more than 28.1 percent Hispanic renters. 

Chapter 3. San Antonio, TX Case Study 

46 
Exhibit 3-9 

Chapter 3. San Antonio, TX Case Study

47 
3.2 Homeownership Barriers 

This section briefly reviews the key barriers to homeownership that were identified by interview 

participants in San Antonio. Overall, respondents identified many of the barriers that are highlighted 

in the homeownership literature, including a lack of knowledge about the home purchase process; 

lack of decent, safe, affordable housing; poor credit; and insufficient savings (for a review, see Cortes 

et al. 2005). Although San Antonio has an affordable housing market when compared to other 

regions of the United States, the deteriorated condition of existing affordable housing presents a 

particular barrier to low-income households. These households are often constricted by two 

impractical homeownership options: low-cost, inadequate housing in the inner city and new 

construction which is typically out of their price range and located in the northern suburbs. 

Lack of Information 

One of the most significant barriers to Hispanic homeownership according to respondents in San 

Antonio is an overall lack of information about, and distrust of, the home purchase process and 

financial institutions. Typically, the Hispanic households served by these agencies: 

• Do not understand the overall home purchase process. Respondents agree that lowincome Hispanic clients are generally not familiar with the home purchase process. One 

loan officer spends an hour with clients explaining the process and distributes a flow 

chart to help them track their progress towards becoming a homeowner. Respondents 

also note that clients are often hesitant to question the process and the services they are 

receiving, even when they are unsure of the situation. Many clients are afraid to “rock 

the boat” by asking questions or are nervous that an unexpected occurrence will 

ultimately prevent the purchase. 

• Have poor financial skills or a lack of knowledge about financial institutions in the 

United States. Poor financial literacy among Hispanics is rooted in a general lack of 

understanding of financial institutions in the United States. Staff from one organization 

note that financial literacy and habits differ between first and second generation Hispanic 

households. First generation households might distrust and avoid financial systems in the 

United States even after being in the country for several years, while second generation 

households tend to become overly indebted, establishing poor credit histories. 

Households with poor credit histories often do not understand the implications of signing 

contracts and establishing credit. Ultimately, the lack of financial knowledge places 

Hispanics in a vulnerable position, which makes them susceptible to predatory lending 

practices and may discourage some Hispanics from pursuing homeownership 

opportunities. 

• Believe that homeownership is out of their reach due to a lack of credit, poor credit 

histories, or insufficient savings for a downpayment. Families frequently believe 

homeownership is not a viable option because many incorrectly assume that their 

financial situation prevents them from becoming homeowners. For example, Hispanics 

believe that poor credit histories and insufficient savings for a downpayment invariably 

precludes them from becoming homeowners, and are unaware of flexible mortgage 

products that address these issues. 

Chapter 3. San Antonio, TX Case Study 

48 
The literature suggests that poor English-speaking skills is one of the main reasons why Hispanics do 

not understand the homebuying process or fail to engage the U.S. financial system. However, service 

providers in San Antonio were less certain about the role that English-speaking skills has on 

knowledge gaps. For example, one respondent reports that most people in the area are bi-lingual, and 

thus language does not contribute to Hispanics’ knowledge gap. This may be a positive implication 

of the high concentration of Hispanics in the San Antonio area. Still, the real estate agent and lenders 

indicate that all legally binding documents are in English and there is a need for bi-lingual 

homeownership materials, even though Texas requires translation of legal homeownership documents 

for review by Spanish-speaking buyers. Another respondent notes that clients may not be completely 

literate in either English or Spanish and, therefore, not entirely comfortable in either language. 

Exhibit 3-4 suggests that most Hispanics in San Antonio can speak English well, although about 1 out 

of 10 have poor English-speaking skills. 

Housing Market Barriers 

Compared to other regions in the country San Antonio offers a relatively affordable housing market 

with the median sales price of an existing single-family home at $133,400 in 2005, well below the 

national median house price of $207,300 (National Association of Real Estate Agents, 2006). House 

price appreciation has also been more moderate in San Antonio, with prices only growing by 13 

percent since 2003 compared to 22 percent nationally. However, service providers emphasize two 

major housing market barriers to Hispanic homeownership: the deteriorated condition of the existing 

housing stock and an unbalanced ratio of household income to housing prices, which results in 

affordability issues for low-income households. 

First, respondents report that much of the housing stock in San Antonio’s Hispanic neighborhoods is 

in poor condition. Neighborhoods located in the east, west, and south sides or the “inner” city are 

distressed, with the existing affordable housing stock being inadequate and unsafe. Service providers 

admit that a family could purchase a home on the west side for about $25,000, but the home would 

need expensive repairs. Also, the lack of satisfactory housing and other in neighborhood eyesores 

impede revitalization efforts by discouraging households from staying or moving into these 

neighborhoods. According to an interview respondent, the growth rate for new residential 

construction has been about 2 percent since 1960 on the west side of San Antonio, compared to about 

20 percent on the more affluent north side. Service providers believe, however, that market demand 

exists in these distressed neighborhoods. Two organizations that build small-scale infill housing 

report that they easily sell new or renovated homes once they are constructed in these areas. 

The deteriorated condition of the existing housing stock also presents barriers for organizations that 

renovate homes for affordable housing purposes. The actual costs of acquiring and renovating homes 

in these types of neighborhoods often surpass existing home values, and as a result, home prices 

increase. Organizations must either subsidize construction costs or provide subsidies to homebuyers 

to make the purchase affordable. 

Second, affordability barriers are closely associated with incomes among prospective Hispanic 

homebuyers. According to one service provider, San Antonio contains several of the lowest income 

census tracts in the United States. Respondents report that most clients have hourly, low-wage 

employment, making it difficult to purchase a suitable home that does not require extensive 

rehabilitation or maintenance. The escalating costs of land, infrastructure, and construction materials 

further limit opportunities to develop new affordable homes for low-income populations. 

Chapter 3. San Antonio, TX Case Study 

49 
Mortgage Market Barriers 

Respondents routinely cite a lack of credit or poor credit, as well as minimal savings for a 

downpayment, as barriers to Hispanic homeownership in San Antonio. According to those 

interviewed, first and second generation Hispanic households use credit differently and typically 

demonstrate differences in creditworthiness. First generation or foreign-born immigrants often lack a 

credit history and may not have established a bank account. First generation Hispanics have savings, 

but their savings account is their “mattress money.” On the other hand, second generation Hispanic 

households who were born in the United States generally have excessive credit and are overly 

indebted. These Hispanics lack the savings for a downpayment. In both of these situations, 

Hispanics have considerable challenges to qualifying for a mortgage. 

Also, similar to other regions of the county, undocumented immigrants are underserved in the San 

Antonio housing market. Due to identification and financial requirements of subsidy programs and 

conventional mortgage products, all of the organizations that were interviewed are unable to serve 

undocumented individuals without social security numbers. Only a handful of relatively new 

mortgage products are available for use with undocumented immigrants. Often times the only way 

for an undocumented immigrant to purchase a home is through seller financed arrangements, such as 

a contract for deed, and these informal lease-to-purchase agreements leave immigrant households 

financially vulnerable. Undocumented immigrants are also vulnerable to unfavorable terms in the 

subprime lending market. 

Lastly, two respondents indicate that some government programs and products deter real estate 

professionals from accessing them. One loan officer notes that Federal Housing Administration 

(FHA) mortgage loans are relatively inflexible when compared to other mortgage products. For 

example, FHA loans do not allow undocumented income, which is common among Hispanic 

households. Thus, as underwriting requirements have become more flexible among other mortgage 

products, the loan officer has moved away from using FHA mortgages. In addition, another 

respondent notes that the City of San Antonio’s downpayment assistance program is too complicated 

and places a ceiling on the housing price ($89,000), which discourages lenders and real estate agents 

from using the program. For example, multiple inspections are required and the forgivable loan 

formula is complicated. The respondents believe that real estate professionals would be more likely 

to use the program for low and moderate-income households if it were less cumbersome and the 

capped affordable housing price limit was adjusted to better reflect the housing market. 

3.3 Homeownership Services in San Antonio 

The organizations interviewed in San Antonio provide a variety of homeownership services. Overall, 

agencies have adopted a supportive model of service provision, where one or more staff persons track 

and assist a client as the household moves through the home purchase process. The staff person could 

be a housing counselor, but may be another staff member, a real estate agent, or loan officer. Each 

respondent mentioned that an education component was part of the provision of services even if it 

was not a formal course or housing counseling sessions. For example, loan officers generally take the 

first session with a client to explain the underwriting process and to collect the documentation and 

information needed for mortgage pre-approval. A real estate agent may take a similar approach, 

depending on where a household is along the homebuying process. Every respondent routinely 

referred clients to other industry professionals for services they do not provide. Neighborhood 

Chapter 3. San Antonio, TX Case Study 

50 
1 

Housing Services of San Antonio was the only organization with a centralized intake model and an 

array of home purchase services, including pre-purchase counseling, loan servicing, affordable 

housing development, post-purchase counseling, and a small rehabilitation program. 

Nature of Homeownership Services 

Exhibit 3-10 outlines the types of homeownership services offered by participating organizations in 

San Antonio. 

Exhibit 3-10 

Types of Homeownership Services1

 Offered by Participating Organizations in San Antonio 

Homebuying 

Stage 

Type of Service 

Avenida 

Guadalupe 

Association 

Neighborhood 

Housing 

Services 

Homeownership 1. Deciding to Counseling 

3 3

Pursue 

Homeownership Financial Education 3 3 

2. Searching For Housing Search 3

and Finding a 

Suitable Home 

Affordable Housing 

Development 

3 3 

Mortgage 

Qualification 3 

Mortgage Products / 

Loan Servicing 

3 3. Obtaining 

Mortgage 

Financing Closing or 

Downpayment 

Assistance 

3 3 

Post-Purchase 

Counseling 

3 

Other Referrals 3 3

Other1 3 3 

Merced 

Housing 

Texas 

3 

3 

3 

National 

Association of 

Hispanic Real 

Estate 

Professionals 

3 

3 

3 

3 

Participating organizations also offer a variety of other services, including: multi-family rental properties for low-income 

families and seniors, social services, neighborhood association advocacy and activities, homeownership rehabilitation and 

repair programs targeted to elderly or disabled residents, and homeownership default counseling. 

Deciding to Pursue Homeownership 

Independent of race, income level, ethnicity, citizenship status, or other differences between 

households, respondents believe that most people living in the United States, including Hispanics, 

have a desire to become a homeowner. This is not to say that everyone is ready to pursue 

homeownership because a household’s familiarity with the notion of becoming a homeowner, 

financial readiness, and perception that homeownership is attainable can influence their decision to 

Chapter 3. San Antonio, TX Case Study 

51 
pursue homeownership opportunities. As one respondent explains, families that have never been 

exposed to homeownership usually walk through the door without any knowledge of the fundamental 

steps in the process. 

Homeownership Counseling and Financial Education 

Two of the agencies interviewed in San Antonio, Avenida Guadalupe Association and Neighborhood 

Housing Services of San Antonio, provide housing counseling for clients. Merced Housing Texas 

and representatives from NAHREP do not counsel clients themselves, but routinely refer clients to 

housing counseling and financial education programs. 

AGA offers group and one-on-one counseling for clients. The group classes are HUD-certified and 

typically include presentations by a lender, real estate agent, insurance agent, home inspector, and a 

representative from a utility company in two, four-hour sessions. The class is offered monthly with 

about 12 participants and has a maximum capacity of 20 participants per class. Classes provide 

information about the home purchase process, including information on credit and finances, mortgage 

qualification, housing search, fair housing issues, energy conservation, and home maintenance. The 

classes are open to residents of Bexar County to households of any income level and are offered in 

English or Spanish by bi-lingual presenters. A large majority of AGA’s participants are Hispanic 

(about 98%). Most attendees live outside the agency’s immediate service area (about 90%). 

One-on-one pre-purchase counseling is available once a household has attended the group counseling 

class and agency staff generally encouraged households with credit issues to attend one-on-one 

counseling. About half of the families that attend group courses request one-on-one counseling. 

AGA’s housing counselor sees about five families individually per week. The housing counselor 

initially meets with the family for about an hour during the first session to pull their credit report and 

discuss any credit issues. The counselor may write letters of dispute to assist the household in 

cleaning up these credit issues and continues to work with a household until they are mortgage ready. 

On average, the process takes about five or six months per client. The AGA counselor has about 20 

one-on-one active clients at any given time, and about 25 percent of clients successfully purchase a 

home. The counseling program has expanded since the current housing counselor took the position 

about five years ago. AGA now offers default and refinance counseling, as well as pre-purchase 

counseling. During FY 2004, the agency served a total of 112 families for group and one-on-one 

counseling. 

At Neighborhood Housing Services of San Antonio, one-on-one housing counseling is coordinated 

with the intake process. A new client is required to submit an application and a credit report fee of 

$18 to access services. A household’s annual income cannot exceed 80 percent of the area media 

income to be eligible for services. The housing counselor reviews the application to determine if the 

household is mortgage-ready and to calculate the maximum loan amount for which the household can 

qualify. If the household is not mortgage-ready, the housing counselor sends the household a letter 

identifying the credit or other issues that need to be resolved and also offers to help resolve these 

issues. If the family is mortgage-ready, the housing counselor sends a letter scheduling an 

appointment. During the appointment, the housing counselor reviews: 

• The basics of homeownership and the underwriting process, including the four Cs – 

credit history, capacity to repay a loan, cash for a downpayment, and collateral for the 

loan; 

Chapter 3. San Antonio, TX Case Study 

52 
• The household’s credit report, showing the family how to read it; 

• The homebuying programs NHSSA offers and what the different payment structures 

would mean for the household (only if the household is mortgage ready); and 

• Develops a plan to help the family achieve homeownership. 

Once a mortgage-ready household decides which program best fits their needs, their application is 

sent for review by NHSSA’s in-house underwriter. When the loans are originated, the housing 

counselor introduces the household to the real estate agent at NHSSA (if the family does not already 

have an agent) and the family can begin the housing search process. Mortgage-ready households are 

referred to the group homebuyer-training course. 

NHSSA offers a group housing counseling class that is required for families receiving second or third 

mortgage assistance through the agency. The group class is a nine-hour, HUD-approved course that 

reviews different aspects of the home purchase process and includes the following components: 

• Are you ready to buy a home?; 

• Budgeting and credit; 

• Shopping for a home; 

• Getting a mortgage loan; 

• Keeping your home and managing your finances; and 

• Home maintenance. 

NHSSA offers the class at least once per month with 12 to 15 households attending each class. 

Hispanic households comprise a majority of NHSSA’s clients (92%). The group classes are offered 

in English and Spanish with bi-lingual instructors. Spanish-only classes are offered if a portion of 

clients feel more comfortable attending a class in Spanish, although participants are usually bi-lingual 

and the housing counselor has only experienced a few occasions where a client did not speak any 

English. For each session the housing counselor schedules two sets of presenters. Presenters include 

a variety of real estate professionals, such as real estate agents and lenders. 

With the exception of the organization’s loan servicing, every NHSSA service is provided on-site 

within their Homeownership Center, which is a one-stop-shop for intake, loan application, initial 

processing, housing counseling, and closing assistance. The only off-site activity that a household 

eventually has to complete is filling out a loan application for the primary mortgage at one of 

NHSSA’s four banking partners, which is discussed below. 

In addition to pre-purchase counseling, NHSSA also offers post-purchase classes that review the 

importance of asset allocation, tax benefits of homeownership, basic home repair, tips on being a 

good neighbor, and advice about avoiding predatory lending. Post-purchase classes are taught by a 

team of individuals. A hands-on workshop is located on-site to show clients how to complete routine 

maintenance. The workshop includes stations where participants can practice changing locks, basic 

plumbing repair, hot water heater maintenance, and other home repair and maintenance activities. 

Participants receive a homeownership manual that was developed by NHS. To encourage 

Chapter 3. San Antonio, TX Case Study 

53 
participation, NHSSA collects a $200 fee for post-purchase counseling at each closing, which is 

returned to the client in the form of cash and Sears gift cards if the household attends the class.7 Sears 

also provided resources to construct the workshop, develop the manual, and hold the classes. 

Searching For and Finding a Suitable Home 

Finding safe, decent, affordable housing in San Antonio can be a challenge, especially for lowincome families. Existing homes often requires expensive rehabilitation, while new construction may 

be out of a household’s price range or in a newer neighborhood that would require the family to 

relocate. All four of the agencies interviewed in San Antonio provide services to address housing 

market barriers, including help searching for a home and affordable housing development and 

rehabilitation. 

Housing Search 

NHSSA and the real estate agent from NAHREP San Antonio provide housing search services to 

households in Bexar County. NHSSA recently hired an in-house agent to assist clients with the 

housing search process and to recruit a pool of agents willing to work with NHSSA clients. The 

organization decided to create the position after acknowledging that some clients were not receiving 

adequate real estate agent services. For example, a few clients settled on homes despite concerns 

from NHSSA staff about the housing search process and a few other clients did not receive a 

thorough home inspection. Staff explains that a natural tension exists between the role of real estate 

agents and the intent of the program. Agents want to close on homes and receive a commission, but 

clients require a patient real estate agent who is willing to take the time necessary to explain the 

process and continue looking for an appropriate home. 

The co-founder of NAHREP San Antonio recently opened a new real estate office in San Antonio 

that is a branch office to the largest Latino-owned real estate company in Texas and the second largest 

in the country. The San Antonio office provides bi-lingual realty services to households in the San 

Antonio area. According to the NAHREP real estate agent, one of the main reasons why the office 

was founded is to increase homeownership opportunities among Hispanics in San Antonio. 

Affordable Housing Rehabilitation and Development 

Both AGA and NHSSA develop safe, decent affordable housing in the San Antonio metropolitan area 

and in Bexar County. 

AGA operates a small infill-housing program that constructs affordable housing within the bounds of 

the agency’s service area. The organization has developed seven single-family homes in the past 

three years. The lack of available, affordable lots is an ongoing challenge, but AGA staff have 

discovered that a viable market for new construction exists within their surrounding neighborhood. In 

the next few years, AGA will be collaborating with the City and local non-profits to develop a total of 

49 homes in a large tract of land close to the agency’s service area. AGA will act as a developer for 

six to eight of the homes. 

Similarly, NHSSA develops new affordable housing in the San Antonio area and plans to develop 40 

to 50 new homes each year through 2007. As a developer, the organization purchases and assembles 

tracts of land, collaborates with surrounding communities to plan the developments, completes site 

Sears is a national sponsor for Neighborhood Works Post-purchase Counseling program. 

Chapter 3. San Antonio, TX Case Study 

54 

7 
work and infrastructure, and manages the construction of the homes. NHSSA often partners with 

other non-profits to build the developments, especially when constructing affordable housing in areas 

of the city where the private sector will not build. Clients use the organization’s subsidy programs 

(described below) to make the purchase of a newly constructed home more affordable to low-income 

households. 

Merced Housing Texas acquires and renovates affordable housing in the “inner city” area of San 

Antonio. The organization sells the homes for approximately $60,000 by subsidizing the renovation 

with private donations and paying for all, or a portion of, the buyer’s closing costs. Merced Housing 

has finished fifteen homes total, and two homes are currently under construction. The organization is 

continuously looking for properties to purchase and rehabilitate. Merced often works with 

neighborhood and community associations to identify properties for rehabilitation. 

Merced finances the rehabilitations with a line of credit, which requires buyers to qualify for a 

conventional, fixed-rate mortgage. Merced refers interested households to local lenders. One lender 

offers an affordable housing mortgage product and the other is an FHA lender. If the household is not 

initially approved for a loan, Merced staff will work with the household and lender to identify what 

steps need to be taken to secure approval. If a household is ultimately turned down, Merced refers 

them to an agency that offers credit and housing counseling and begins looking for another mortgageready household. The agency typically reviews fifteen to twenty applicants for each renovated home 

due to difficulties securing a conventional mortgage. 

Once a household qualifies for a mortgage, Merced staff works with the client to negotiate the final 

sale price of the home. The organization prices the home to cover acquisition and rehabilitation costs, 

and typically assists the family with closing costs. One of the largest challenges is acquiring and 

renovating a home while keeping the selling price around $60,000. Merced Housing was recently 

awarded a $60,000 American Dream Downpayment Initiative (ADDI) grant through the City to be 

used for downpayment assistance. For each household, up to $10,000 of downpayment and closing 

costs will be provided. Buyers will be required to attend pre-purchase housing counseling and agree 

to five years of counseling follow-up after the purchase. 

Obtaining Mortgage Financing 

Qualifying for a mortgage is a critical obstacle to low-and moderate-income Hispanic households 

who seek homeownership. 

Mortgage Qualification 

Each of the organizations interviewed in San Antonio provide some type of mortgage qualification 

assistance to clients. Neighborhood Housing Services of San Antonio and Avenida Guadalupe 

Association provide in-depth, housing counseling assistance to help clients secure mortgage approval. 

Both organizations provide group and individual housing counseling, and review credit reports with 

clients. Counselors at both agencies help the household address credit issues that may prevent loan 

approval. 

NHSSA uses a tandem lending model and has formed partnerships with five financial institutions. In 

the tandem model, downpayment and closing cost assistance is provided by the agency in the form of 

second and third mortgages, which are serviced by the agency, while the first mortgage is provided by 

one of the five financial partners. The housing counselor routinely explains details of the programs 

and products to mortgage-ready clients and assists households with their product decisions. In 

Chapter 3. San Antonio, TX Case Study 

55 
addition, because NHSSA offers loan products, the organization assists clients with no credit history 

to identify alternative forms of credit, such as rent or utility bills. 

Merced Housing and representatives from NAHREP assist clients in a less formal manner than 

NHSSA and AGA. Merced Housing refers clients to partner lenders and works with the applicant 

and lender as needed to address the mortgage approval. If a client is not approved, Merced refers the 

household to a housing counseling agency. In addition, the NAHREP loan officers provide guidance 

on selecting the most appropriate mortgage product by discussing the benefits and shortcomings of 

each product. 

Mortgage Products 

None of the agencies interviewed are able to serve illegal immigrants who do not possess a valid 

Social Security Number (SSN). For example, NHSSA receives funding through government subsidy 

programs that require citizenship or permanent resident status, and Merced Housing’s line of credit 

mandates that homebuyers access a fixed-rate mortgage product that requires an SSN. Only 

representatives of NAHREP and AGA were aware of mortgage products that use an Individual Tax 

Identification Number (ITIN) instead of a Social Security Number. Nonetheless, a variety of 

mortgage products and downpayment assistance programs are available through the agencies 

interviewed in San Antonio or their formal or informal partners. 

NHSSA assists clients by providing downpayment and closing cost assistance along with providing 

access to a first mortgage through one of the agency’s five financial partners. Four banks and one 

credit union provide annual financial support to NHSSA and offer primary mortgages at fairly low 

fixed interest rate to NHSSA clients (for example, the rate was 5.95 percent at the time of our 

interview). NHSSA then offers second and third mortgages to clients depending on whether the 

client is purchasing new or existing construction. Partner banks meet Community Reinvestment Act 

(CRA) requirements and also receive a steady stream of referrals from NHSSA. NHSSA typically 

alternates between the five lenders, unless one of the banks initially referred the client to the program. 

In this case, the referring lender will issue the first mortgage. 

NHSSA offers two mortgage products. One product is available for clients who purchase a new 

home in a NHSSA development, and a second product is offered to clients who purchase an existing 

home. Both programs require that the applicant put down the greater of $1,000 or 2 percent of the 

contracted sales price. 

• The First-Time Homebuyer Program is designed for the purchase of a new home in a 

NHSSA development. The homes range from $70,000 to $85,000. Through this 

program NHSSA offers a second $15,000 mortgage that is forgiven over time and a third 

mortgage of $10,000 at a 5 percent fixed interest rate. 

• The Second Mortgage Program is targeted to households who purchase a new home 

built by another developer or an existing home in Bexar County. A household can access 

a second mortgage totaling 25 percent of the contracted sales price at a 5-percent fixed 

interest rate. The loan pays for part of the downpayment and closing costs. Any existing 

home must meet the City of San Antonio building codes and an inspection must be 

performed by a licensed property inspector. 

Chapter 3. San Antonio, TX Case Study 

56 
NHSSA’s mortgage programs are funded through a City of San Antonio HOME grant. A 

household’s annual income cannot exceed 80 percent of the area median income, and NHSSA follows 

firm underwriting guidelines. For example, a family’s monthly mortgage payment cannot be more 

than 33 percent of their income. NHSSA has discovered that it is important to require a minimal 

downpayment because the applicant will feel a great stake in their home investment. Additional 

subsidies may also be available to homebuyers, depending on whether NHSSA has other grant 

funding available. Extra funding is typically used to help households qualify for better quality house 

or reduce their monthly mortgage payments. 

Merced Housing refers prospective homebuyers to banks for conventional or FHA mortgages. 

Jefferson State Bank offers the Home Owners Advantage Program to households at or below 80 

percent of AMI (Texas Appleseed, 2005). The program offers several options, including: a 30-year 

fixed loan at a 7-percent interest rate; a 15-year fixed loan at a 9-percent interest rate; and a 30/15­

balloon loan at a 9-percent interest rate. Each product requires a 5 percent downpayment, but the 

bank pays for $1,500 of the closing costs. The underwriting guidelines are flexible and the bank 

accepts alternative credit sources with a stable two-year work history. Staff at Merced Housing 

reported that the bank tends to warehouse these loans for a period of time and can therefore be more 

flexible with underwriting because there is no immediate sale of the loan into the secondary mortgage 

market. 

The NAHEP loan officer works for Bank of America and reported that she frequently uses the 

ACORN partnership product for low- and moderate-income households. The loan officer likes the 

product because clients are required to attend the housing counseling classes through ACORN. Bank 

of America offers a 30-year fixed interest rate to families at or below 100 percent of the AMI. The 

interest rate is typically lower than a conventional mortgage rate. The product requires a 3 percent 

downpayment, $500 of which must come directly from the borrower and accepts up to $1,200 in 

undocumented income. The bank accepts alternative lines of credit—including rent, utility, rent-toown, or other regular payments—and requires at least two years of stable employment history. 

Applicants must be renting a house or apartment and also be able to establish a history of paying rent 

on time. 

Lastly, the City of San Antonio offers a downpayment assistance program for first-time homebuyers 

called the Homeownership Incentive Program (HIP). HIP offers a maximum $8,000 loan to firsttime, income eligible homebuyers in the City of San Antonio at 3-percent interest over five years. A 

portion of the loan may be forgiven depending on the borrower’s circumstances. Households with 80 

percent AMI or below qualify for the loan and households must purchase a home that is $89,000 or 

less, which is the maximum affordable housing price set by San Antonio City Council. 

Closing Assistance 

Staff from each organization interviewed in San Antonio are available to assist clients with questions 

or problems through and after the closing process. Merced Housing staff attend client closings, as 

does the housing counselor at AGA. At NHSSA, closings typically take place in their 

Homeownership Center and a variety of staff attend the closings, especially because the second and 

third mortgages are also finalized at that time. The real estate agent and loan officers that represent 

NAHREP typically attend their clients’ closings. In addition, service providers educate clients about 

the closing process during the housing counseling class, and some distribute translated copies of 

sample closing documents to clients. 

Chapter 3. San Antonio, TX Case Study 

57 
Service Provision and Outreach 

This section describes the scale of service provision delivered by each organization, the level of 

service coordination among service providers in the metropolitan area, and the types of outreach that 

these organizations conduct to market their services. The section also discusses the perceived 

demand for their services. 

Service Provision 

The housing counseling program at AGA served 121 households in 2004. Ninety-five percent of 

these clients are Hispanic and about 25 percent of counselees eventually purchase a home. According 

to AGA staff, none of the counseled households have defaulted on mortgages since the program 

began five years ago. AGA staff would like to expand the default counseling program, but believe 

that the current services are effective, with one-on-one counseling having the most impact on families 

eventually achieving homeownership. 

At NHSSA, staff believe that their range of services are generally effective, especially their housing 

counseling classes. Their educational classes eliminate much of the fear and suspicion that first-time 

homebuyers frequently experience and provide guidance at each step of the homebuying process. 

The housing counseling program at NHSSA served 181 households with pre-purchase and postpurchase counseling in FY 2004. NHSSA provided second and third mortgages to about 75 

households that closed on homes, and about 95 percent of these households were Hispanic. 

Merced Housing Texas staff believe the agency has been effective in creating safe, decent affordable 

housing and in revitalizing neighborhoods. The organization has completed 15 homes since 1995 and 

currently has two under construction. All but two of the homes were sold to Hispanic families. Staff 

would like to renovate a greater number homes, but finding homes that are financially feasible to 

acquire, rehab, and sell as affordable housing is difficult, especially when competing with private 

investors. The agency also recognizes that there is a cohort of undocumented households that do not 

have access to their programs because their conventional fixed-rate mortgages require proper 

documentation. Staff believe that new, conventional mortgage products targeted to high-risk buyers 

are needed. 

The real estate agent and loan officers representing NAHREP consider their services effective if they 

educate clients about the home purchase process and help a family close on a home. One loan officer 

helped 143 families close on homes during 2005. Sixty percent of these families were Hispanic. The 

other loan officer estimates that he works with about five to ten households per month. 

Partnerships and Service Coordination 

The majority of partnerships among agencies and real estate professionals in San Antonio are 

informal. Besides NHSSA’s formal partnerships with local financial institutions and two other 

nationally-based partnerships between companies and non-profit organizations, the remaining 

working relationships have developed informally. However, service providers comment that the 

nature of their work demands that professionals and non-profit organizations develop and maintain 

partnerships within the industry. For example, housing counseling programs continuously cultivate 

relationships with lenders, real estate agents, and other professionals to participate in their HUDcertified homeownership counseling services and real estate professionals, in turn, are constantly 

prospecting for new clients. Non-profit organizations need to be confident that clients will be treated 

with respect by lender and real estate agent partners, and tend to continue working with professionals 

Chapter 3. San Antonio, TX Case Study 

58 
who are sensitive to the needs of their clients. Also, one of NAHREP’s objectives is to encourage 

networking among real estate professionals that serve Hispanic households. Providing forums for this 

kind of informal relationship building should foster working partnerships and encourage Hispanic 

homeownership. 

Marketing Homeownership Services 

Each of the organizations interviewed in San Antonio engage in some type of marketing or outreach 

effort, including: 

• Media advertisements, including public service radio advertisements; 

• Print advertisements in newspapers and written media; 

• Presentations at community events or educational seminars, like a housing counseling 

sessions or homebuyers’ fairs; 

• Distributing flyers; 

• Targeted mass mailings; and 

• Outreach with other non-profit organizations or other partners. 

Outreach to the Hispanic population is a key part of informing households about available programs 

and services in San Antonio, as well as influencing their decision to pursue homeownership. 

Agencies conduct outreach to Hispanic households using a variety of methods, but tend to agree that 

word of mouth is the most effective marketing tool. One loan officer assisted an entire extended 

family to qualify for mortgages and close on homes based on such referrals. The loan officers also 

reported that Spanish-language television commercials advertising mortgage products or 

homeownership programs have an impact. While major financial institutions have marketing budgets 

for television campaigns, small non-profit organizations recognize the limitations of more affordable 

types of advertising and outreach. Neighborhood Housing Services recently began a series of public 

service radio announcements on one of the Spanish-speaking radio stations in town. All respondents 

reported that they routinely give presentations at community meetings or attend homebuyer fairs. 

Referrals between real estate professionals and organizations are also important for both parties. 

Two organizations expressed concerns about conducting outreach and marketing their services. 

Outreach is key, but it is often difficult to effectively target marketing efforts with limited resources 

and budgets. Another organization expressed concerns over predatory lenders and other predatory 

financial services that target low-income households. These for-profit companies often have the 

marketing dollars to reach consumers before non-profit service providers are able to educate 

consumers and warn them about predatory lending practices. 

According to the service providers, print, radio, or television advertisements must emphasize that 

programs and services are bi-lingual. The real estate agents and loan officers from NAHREP 

emphasized that bi-lingual printed materials about products and programs are essential. NHSSA staff 

discovered that listing programs as “Spanish-speaking” has the potential to alienate bi-lingual 

households that are not comfortable speaking only Spanish or only English. The agency now 

advertises the housing counseling course and other programs as bi-lingual to help households feel 

comfortable contacting the agency and attending the class. 

Chapter 3. San Antonio, TX Case Study 

59 
Demand for Homeownership Services 

The potential pool of Hispanic renters that could benefit from the services described above is large. 

Exhibit 3-11 provides an estimate of demand for services in San Antonio by displaying the number of 

Hispanic renters in San Antonio by income level. Most of the organizations interviewed target 

households at or below 80 percent of AMI, although several are able to serve households up to 120 

percent of AMI. Exhibit 3-11 suggests the demand for homeownership services targeted to Hispanic 

households in San Antonio is high with 62,244 Hispanics renters at or below 80 percent of AMI and 

80,120 Hispanic renters at 120 percent of AMI. Several agencies target services to households 

between 50 and 80 percent of AMI, which number 22,187 in San Antonio. These households have 

sufficient income to qualify for a mortgage, but require assistance to achieve homeownership. 

Exhibit 3-11 

Distribution of Hispanic Renters and Homeowners by Percent of Area Median Income in San 

Antonio, 2000 

<50% of AMI 

50-79.9% of AMI 

80-119.9% of AMI 

>=120% of AMI 

Total 

Hispanic Renters 

Number Percent 

44,057 44% 

22,187 22% 

17,876 18% 

15,178 15%

99,298 100% 

Hispanic Homeowners 

Number Percent 

29,488 21% 

25,045 18% 

28,927 21% 

56,606 40% 

140,066 100% 

Total 

Number Percent 

73,545 31% 

44,232 19% 

46,803 20% 

71,784 30% 

236,364 100% 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample 

Services at AGA, NHS, and Merced Housing Texas are currently operating at full capacity. AGA 

and NHS believe that any expansion of services would require additional staff. AGA speculated that 

there is a low demand for services in the immediate neighborhood and service area due to an existing 

high rate of homeownership and that the demand for services from county residents is much higher. 

In thinking about demand for services, respondents emphasized the difficulty in identifying qualified, 

mortgage-ready clients. At NHSSA, the intake process helps distinguish those households that are 

mortgage ready and those that could be with long-term work on credit issues. Only about 10 percent 

of households are mortgage-ready at intake and at least 15 to 20 percent of applicants require longterm credit repair. A portion of potential NHSSA clients self-select out of the program because they 

are not comfortable sharing a credit report and, for the remainder of applicants, credit issues or a low 

household income continue to act as barriers to homeownership. Merced Housing Texas estimates 

that almost every Hispanic renter in San Antonio would be interested in buying a home, but that only 

about 10 to 20 percent of these households would qualify for a mortgage. Similarly, the professionals 

from NAHREP estimate that about 60 to 70 percent of Hispanic renters would be interested in 

homeownership, but only about 10 to 15 percent would be able to qualify for a mortgage 

immediately. 

Chapter 3. San Antonio, TX Case Study 

60 
Demand for services are also influenced by marketing efforts. One respondent believes that adequate 

homeownership services exist to serve those in need, but that the public is not aware of them, 

indicating a marketing gap. In addition, organizations find that marketing is a balancing act that may 

have both positive and negative outcomes. On the one hand, agencies want to serve as many 

households as possible and improve access to homeownership opportunities. On the other hand, 

service providers must be careful not to overwhelm staff with a large influx of clients. For example, 

NHSSA has done mass mailing and radio advertisements for particular developments in the past, 

which subsequently overwhelmed staff with phone calls and applications. NHSSA also finds that 

community presentations generate a large volume of interested households. 

Nevertheless, the demand for services is expected to grow dramatically as the Hispanic population 

grows in San Antonio. According to recent analyses of Census population estimates, the San Antonio 

metropolitan area is ranked 9th in terms of largest Hispanic population, and Hispanics constitute 61 

percent of the population under age 15 (Frey, 2006). 

3.4 Conclusions 

Interviews with organizations that provide homeownership services to low- and moderate-income 

Hispanic households in San Antonio highlighted three areas of consideration. First, service providers 

emphasize the lack of safe, decent affordable housing in traditionally Hispanic neighborhoods in San 

Antonio as a major barrier to homeownership. Although several organizations construct new infill 

housing or acquire and renovate existing homes, the process is filled with challenges and takes time. 

In AGA’s service area there is a lack of available and suitable lots. Merced Housing Texas struggles 

to find properties to acquire and renovate while still keeping the sales price affordable and reasonable 

for the neighborhood housing market. In addition, organizations that build affordable housing are 

constantly coping with increases in price of land and construction materials. Although these agencies 

are making progress, the demand for safe, decent affordable housing in San Antonio outpaces existing 

production. For example, the interviewed agencies produce approximately 50 housing units per year, 

and the demand for Hispanic homeownership is 22,187 households among those in the 50 to 80 

percent AMI levels alone. This demand is expected to increase as the Hispanic population rises in 

San Antonio along with continuing economic growth. 

Second, financial barriers to Hispanic homeownership vary by first and second generation low- and 

moderate-income households. First generation Hispanic households typically have no credit histories, 

no established bank accounts, but large cash savings. They tend to be more suspicious of financial 

institutions in the U.S. or have had negative experiences in the past. Second generation Hispanic 

households often have poor credit histories and are unable to save for a downpayment. These 

households tend to follow the financial patterns of other low- or moderate-income groups in the U.S. 

by acquiring debt at a young age without fully understanding the implications of credit. 

Homeownership services need to be flexible enough to address the diverging needs of these two 

groups. 

In addition, immigrant, undocumented households are effectively excluded from accessing 

homeownership opportunities because most readily available mortgage products require a Social 

Security Number. Although a few demonstration programs are experimenting with ITIN numbers in 

lieu of SSN, these products are few in number and difficult to access, and non-profit organizations are 

generally unaware of new and innovative products that address this niche. 

Chapter 3. San Antonio, TX Case Study 

61 
Lastly, respondents provided insight into the high rate of Hispanic homeownership in San Antonio 

when compared to the rest of the country. The Hispanic homeownership rate in San Antonio (58.5 

percent) is nearly 13 percentage points higher than the national rate (45.6 percent). Respondents 

believe that the high Hispanic homeownership rate is primarily due to the intersection between the 

large population of Hispanics in San Antonio and the recent economic boom that the region 

experiencing. The concentration of Hispanic households in San Antonio appears to reduce the impact 

of certain barriers. For example, the language barrier is less severe because a significant proportion 

of people in the area are bi-lingual. Hispanic households are also more likely to speak English than 

Hispanics in other regions of the country. 

Representatives of NAHREP and Merced Housing Texas reported that an influx of industry and job 

opportunities have boosted the San Antonio economy in the last five to ten years. Hispanic families 

have benefited from steady, albeit largely low-wage, employment and a low unemployment rate. One 

respondent also believes that there is a solid middle and working class Hispanic community in San 

Antonio and thinks this segment of the population could have an impact on the higher Hispanic 

homeownership rate. In addition to the large population of Hispanics and the economic expansion in 

the region, the city also offers relatively affordable housing stock, making homeownership a real 

possibility for low- and moderate-income households. 

Chapter 3. San Antonio, TX Case Study 

62 
Country of Origin for Hispanics in Washington DC, 2000 

Chapter Four 

Washington DC Case Study 

This chapter reviews some of the key efforts to improving homeownership opportunities among 

Hispanic households in the Washington DC metropolitan area. The chapter proceeds in four sections. 

The following section describes the demographic characteristics of Hispanics in the Washington DC 

metropolitan area and presents their homeownership rates and gaps. The section also provides an 

overview of the service providers interviewed for the Washington DC case study. Section 2 reviews 

the key barriers to homeownership that were identified by interview participants, followed by a 

section that describes the sundry services offered by these organizations. The concluding section 

identifies the main themes in the Washington DC case study. 

4.1 Hispanics, Homeownership Rates, and Service Providers in 

Washington DC 

Hispanic Profile 

Hispanics constitute 9 percent of the total population in Washington DC. Exhibit 4-1 presents the 

country of origin for Hispanics living in the Washington DC metropolitan area. Most Hispanics in 

the DC area come from South (17 percent) or Central America (31 percent), particularly El Salvador. 

A large proportion of Hispanics self-identify as Mexican (14 percent), Puerto Rican (9 percent), and 

other (23 percent). Cubans, Dominicans, or Spanish represented three percent or less of the Hispanic 

population in the region. 

Exhibit 4-1 Exhibit 4-2 presents the racial 

characteristics of Hispanics and 

non-Hispanics in the DC area and 

Dominican Spain in the U.S. For the most part, 

Republic 1.0% Cuba Hispanics in the Washington, DC 

2.3% 3.2% metropolitan area have a similar 

racial composition as Hispanics Puerto Rico Central 

9.4% America nationally, although DC-area 

30.4% Hispanics are slightly more 

diverse racially than their national 

counterparts. For example, there 

are slightly fewer white Hispanics Mexico

14.1% in Washington DC (48 percent) 

than in the U.S. (50 percent). 

South America Others Also, there are slightly more Black 

17.0% 22.7% Hispanics (4 percent compared to 

2 percent) and Hispanics of two or 

more races (9 percent compared to 

6 percent) in the DC area than nationally. Similarly, non-Hispanic households in Washington DC are 

considerably more diverse racially than in the U.S. 

Chapter 4. Washington DC Case Study 

63 
Exhibit 4-2 

Racial Characteristics of Hispanic and Non-Hispanic Households in Washington DC and the 

U.S., 2000

Race 

White 

Black or African American 

American Indian/Alaska Native 

Asian 

Native Hawaiian/Pacific Islander 

Some other race 

Two or more races 

Total 

 Washington, DC 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

47.6% 63.8% 

3.7% 27.7% 

0.7% 0.3% 

0.4% 6.0% 

0.1% 0.0% 

39.0% 0.2% 

8.5% 2.0% 

108,633 1,668,453 

U.S. 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

50.4% 82.1% 

2.0% 12.3% 

1.0% 0.7% 

0.3% 3.2% 

0.1% 0.1% 

40.5% 0.1% 

5.8% 1.5% 

9,187,972 96,292,129 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample 

Exhibit 4-3 displays the socio-economic characteristics of Hispanic and non-Hispanic households in 

Washington DC and in the U.S. Hispanic households in Washington DC have higher annual incomes 

when compared to their counterparts across with country. Nearly one-third of Hispanic households 

(30 percent) earn $70,000 or more compared to less than one-fifth of Hispanics (16 percent) 

nationally. Also, only 37 percent of Hispanics in Washington DC earn less than $40,000 annually 

compared to 58 percent of Hispanics nationally. Despite having higher incomes than Hispanics 

nationally, Hispanics in the Washington area still have lower incomes than their non-Hispanic 

counterparts. Most notably, 70 percent of Hispanic households in DC make less than $70,000 per 

year compared to only 54 percent of non-Hispanic households. 

Exhibit 4-3 also suggests that Hispanic households in Washington, DC are generally more educated 

than their counterparts nationally. The percentage of Hispanic household-heads in Washington DC 

with a bachelor’s degree (13 percent) is nearly double the national rate (7 percent), and the proportion 

of Hispanics with graduate degrees (11 percent) is nearly triple the rate among Hispanics nationally (4 

percent). Fewer Hispanics in Washington DC (39 percent) have less than a high school education 

compared to nearly half of Hispanics (46 percent) nationally. However, disparities in educational 

attainment between Hispanics and non-Hispanics in Washington DC are evident. Twenty-three 

percent of Hispanics have bachelor degrees or higher compared to 48 percent of non-Hispanic head of 

households. 

Chapter 4. Washington DC Case Study 

64 
Exhibit 4-3 

Socio-Economic Characteristics of Hispanic and non-Hispanic Households in Washington 

DC and the U.S., 2000

 Washington, DC U.S. 

% Hispanic 

Households 

% non-Hisp. 

Households 

% Hispanic 

Households 

% non-Hisp. 

Households 

Income 

<$10,000 

$10,000 and <$20,000 

$20,000 and <$30,000 

$30,000 and <$40,000 

$40,000 and <$50,000 

$50,000 and <$60,000 

$60,000 and <$70,000 

$70,000 or more 

5.6% 

7.4%

11.4%

13.0%

11.9%

10.9%

9.4%

30.4%

5.4% 

6.0% 

7.8% 

9.2% 

9.0% 

8.7% 

8.3% 

45.7% 

12.7% 

15.9% 

15.8% 

14.0% 

10.9% 

8.4% 

6.2% 

16.2% 

9.3% 

12.3% 

12.7% 

12.2% 

10.6% 

9.0% 

7.3% 

26.6% 

Education 

Less than High School 

High school graduate, or GED 

Some college, no degree 

Associate degree 

Bachelors degree 

Professional/Graduate degree 

38.6% 

16.8% 

16.6% 

3.9%

13.0%

11.1% 

9.7% 

18.2% 

19.4% 

4.8% 

24.9% 

23.1% 

45.6% 

21.8% 

17.1% 

4.4% 

7.1% 

4.1% 

16.3% 

27.8% 

22.5% 

6.2% 

16.9% 

10.3% 

Age 

<30 

30-34

35-44

45-54

55-64

65-74

75+ 

21.7% 

16.8% 

30.3% 

18.2% 

7.9% 

3.4% 

1.6% 

11.9% 

10.6% 

25.1% 

22.7% 

14.1% 

8.5% 

7.2% 

20.8% 

14.4% 

26.9% 

18.0% 

9.7% 

6.5% 

3.8% 

12.0% 

8.9% 

22.2% 

20.4% 

13.9% 

11.5% 

11.1% 

Household Type 

Married couples with children 

Married couples w/o children 

Other Families with children 

Other Families without children 

Other1 

Total Number of Households 

40.1% 

20.2% 

11.4% 

9.0% 

19.3% 

108,633 

24.1% 

27.2% 

8.0% 

7.1% 

33.6% 

1,668,453 

37.8% 

19.9% 

14.7% 

9.2% 

18.3% 

9,187,972 

23.1% 

30.4% 

8.1% 

6.4% 

32.0% 

96,292,129 

Other household types include singles; separated, divorced, widowed people (without own children); and other 

unrelated people living together (without own children). 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Also, Hispanic households in Washington DC, as well as across the country, are much younger than 

their non-Hispanic counterparts. Over one-third of Hispanics (39 percent) in Washington DC are 

Chapter 4. Washington DC Case Study 

65 

1 
1 

under 35 years old and very few (5 percent) are over 64 years old. By comparison, 23 percent of nonHispanics in Washington DC are under 35 years old and 16 percent are over age 64. Also, Hispanics 

in Washington DC are more likely to live as married couples with children (40 percent) than their 

non-Hispanic counterparts (24 percent). The trends in Washington DC closely mirror those observed 

nationally. 

Exhibit 4-4 

Immigration Characteristics of Hispanic and Non-Hispanic Households in Washington DC 

and the U.S., 2000

 Washington, DC U.S. 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

Percent of 

Hispanic 

Households 

Percent of 

non-Hispanic 

Households 

Nativity 

Native born 

Foreign born 

17.8% 

82.2% 

85.0% 

15.0% 

47.0% 

53.0% 

91.9% 

8.1% 

Citizenship Status 

U.S. citizen 

Not a U.S. citizen 

50.7% 

49.3% 

93.7% 

6.3% 

67.8% 

32.2% 

96.9% 

3.1% 

English Speaking 

Yes, speaks only English 

Yes, speaks very well 

Yes, speaks well 

Yes, but not well 

Does not speak English 

13.4% 

35.7% 

24.3%

21.1% 

5.4% 

86.4% 

9.2% 

3.0% 

1.3% 

0.2% 

17.8% 

37.1% 

19.9% 

17.8% 

7.6% 

91.4% 

5.3% 

2.0% 

1.1% 

0.2% 

Years in the U.S. for foreign 

born1 

0-5 years 

6-10 years 

11-15 years 

16-20 years 

21+ years 

13.0% 

17.7% 

25.4% 

17.0% 

26.9% 

17.0% 

14.7% 

13.7% 

13.5% 

41.1% 

12.8% 

14.8% 

18.7% 

16.2% 

37.4% 

14.5% 

12.8% 

11.8% 

12.3% 

48.6% 

Only includes households with immigrant heads of household, defined as any person who was foreign born, including 

persons born in Puerto Rico or other U.S. outlying areas and persons born abroad to U.S. parents. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Exhibit 4-4 presents the immigration characteristics of Hispanic and non-Hispanic households in the 

Washington DC metropolitan area and in the United States. Hispanic households in Washington DC 

are significantly more likely to be foreign-born (82 percent) and non-U.S. citizens (49 percent) 

compared to Hispanics nationally (53 percent and 32 percent, respectively). To some extent, the large 

proportion of foreign-born, non-citizens in Washington DC may be associated with the large number 

of diplomats and other international representatives living in the metropolitan area. 

Chapter 4. Washington DC Case Study 

66 
1 

Exhibit 4-4 also suggests that rates of English proficiency among Hispanic households in Washington 

DC are relatively similar to national rates, but foreign-born Hispanics in the metropolitan area have 

lived in the U.S. for shorter lengths of time. The number of years foreign-born Hispanic heads of 

household have been in the U.S. peaks between 6–15 years for households in the metro area, whereas 

nationally the largest portion of foreign-born Hispanic households (37 percent) have been in the U.S. 

for 21 years or more. In short, Hispanic households in Washington DC are more likely to be 

immigrants who are not U.S. citizens and who have resided in the U.S. from 6 to 15 years. 

Homeownership Rates 

Exhibit 4-5 presents homeownership rates and gaps in Washington DC by race. Hispanics in the 

Washington DC metropolitan region, as well as nationally, have the lowest homeownership rates 

among minority populations. The Hispanic homeownership rate in Washington DC is 44 percent, 

compared to 49 percent among non-Hispanic Blacks, 58 percent among non-Hispanic Asians, and 49 

percent among non-Hispanics of other races. The rate in Washington DC is lower than the national 

rate for Hispanics (46 percent), which is likely due to the high cost of housing in the Washington DC 

metropolitan area. When compared to whites, Hispanic homeownership rates lag far behind. There is 

a 29 percentage-point homeownership gap between Hispanics and non-Hispanic whites (hereafter 

referred to as “whites”) in Washington DC. The gap in the Washington DC metropolitan area is 

larger than the national gap (27 percentage-points). 

Exhibit 4-5 

Homeownership Rates and Gaps1

in Washington DC, 2000

Race

Hispanic 

Non-Hispanic 

Black 

Asian or Pacific Islander 

Other 

White 

Total 

 Washington, DC U.S. 

 Households Rate Gap Households Rate Gap 

108,633 43.5% -29.1% 9,187,972 45.6% -26.8% 

462,023 49.3% -23.2% 11,796,057 46.6% -25.9% 

101,171 57.8% -14.7% 3,181,674 53.1% -19.4% 

41,241 48.7% -23.8% 2,236,977 51.2% -21.3% 

1,064,018 72.5% 79,077,421 72.5% 

1,777,086 63.3% 105,480,101 66.2% 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

The remaining section describes how Hispanic homeownership rates and gaps vary by key 

demographic, socioeconomic, and geographic factors that have been identified in the literature as 

having an important effect on homeownership. The section focuses on factors that describe important 

variations in homeownership rates and gaps among Hispanics living in the Washington DC 

metropolitan area compared to national trends. These factors include: income, level of education, and 

year of arrival among Hispanic immigrants. Other factors—such as age, net worth, household type, 

Chapter 4. Washington DC Case Study 

67 
mobility, nativity, citizenship, years in the U.S., country of origin, English proficiency, and place of 

residence—are not discussed because the trends in Washington DC that are associated with these 

factors closely resemble national trends. 

Income 

Exhibit 4-6 displays Hispanic homeownership rates and gaps by income level for the Washington, DC 

metropolitan area. Hispanic homeownership rates increase steadily as income levels increase, from 

16 percent among households with $10,000 or less in annual household income to 65 percent among 

households reporting $70,000 or more. The largest increase (17 percentage points) occurs between 

the $60,000 and 70,000 income categories. However, Hispanic homeownership gaps do not show 

any pattern of increase or decrease as income increases; rather they fluctuate between 19 percent and 

28 percent across all income levels. Nationally, the homeownership gap gradually diminishes as 

income increases. The fluctuations in gaps in Washington DC may be attributable to the transient 

professional, diplomatic, and other international representatives that tend to rent for short periods of 

time and then return to their home country. 

Exhibit 4-6 

Hispanic Homeownership Rates and Gaps by Annual Income 1

in Washington DC, 2000 

Homeownership 

Rate 

Homeownership 

Gap 

16% 20% 

27% 

34% 

39% 42% 

48% 

-22% 

-28% -24% -22% -21% -19% 

65% 

-23% -25% 

<$10,000 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 or 

and and and and and and More 

<$20,000 <$30,000 <$40,000 <$50,000 <$60,000 <$70,000 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

Level of Education 

Exhibit 4-7 presents Hispanic homeownership rates and gaps by level of educational attainment in 

Washington DC. With the exception of a slight decline among Hispanics with Associate degrees, 

homeownership rates increase with higher levels of education. Rates increased from 32 percent for 

Chapter 4. Washington DC Case Study 

68 

1 
1 

Hispanics with less than a high school diploma to 57 percent for Hispanics with professional or 

graduate degrees. The rates in Washington DC are slightly lower than the national trends, especially 

among Hispanics with professional or graduate degrees. Nationally, 62 percent of Hispanics with 

advanced degrees are homeowners. 

Exhibit 4-7 

Hispanic Homeownership Rates and Gaps by Education Level 1

in Washington DC, 2000 

Homeownership 

Rate 

Homeownership 

Gap 

32% 

43% 

52% 

49% 

53% 

57% 

-29% 

-20% 

-25% 

-16% 

-21% 

-34% 

Less than High High School Some College, Associate Bachelors Professional/ 

School Graduate, or no Degree Degree Degree Graduate 

GED Degree 

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

The homeownership gap for individuals who have less than a High School education is significantly 

larger (6 percentage points) in the Washington DC metro area when compared to Hispanics 

nationally. Attainment of some college education and the completion of a Bachelors degree appear to 

have significant impacts on the homeownership gap in Washington DC. As level of educational 

attainment increases from ‘High School graduate or GED’ to ‘Some college, no degree’ and from an 

‘Associates Degree’ to ‘Bachelors Degree,’ the homeownership gap decreases by nine percentage 

points. 

English Proficiency 

Exhibit 4-8 presents the Hispanics homeownership rates by level of English proficiency in 

Washington DC. English proficiency plays a more important role in promoting Hispanic 

homeownership in Washington DC than nationally. The homeownership rate among Hispanics who 

speak English ‘well’ is 31 percentage points higher than among those who do not speak any 

English—46 percent compared to 15 percent. Although homeownership rates among Hispanics 

nationally also increase as English language skills improve, the impact of improved language skills is 

Chapter 4. Washington DC Case Study 

69 
1 

more pronounced in Washington DC than nationally. For example, national homeownership rates 

among Hispanics who speak English ‘well’ is only 11 percentage points higher than those who do not 

speak any English. 

Exhibit 4-8 

Hispanic Homeownership Rates and Gaps by English Proficiency1 in Washington DC, 2000 Homeownership Rate Homeownership Gap

-21% 

-11% -9% 

46% 

30% 

15% 

-24% -24% 

51% 52% 

Does not speak Yes, but not well Yes, speaks well Yes, speaks very Yes, speaks only

English well English

Homeownership gaps are calculated in relation to the non-Hispanic white homeownership rate. 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample. 

The homeownership gaps between Hispanics and whites in Washington DC decreases significantly, 

from 24 percent to 9 percent, as English proficiency increases from ‘not well’ to ‘well.’ The drop in 

the gap suggests that marginal improvements in English language skills can have an important impact 

on the ability of Hispanics to become homeowners in Washington DC. However, the positive impact 

of improved English language skills on homeownership rates wanes as skills continue to improve. In 

fact, the gap among Hispanics who only speak English (21 percentage points) is nearly the same as 

the gap among Hispanics who do not speak English (24 percentage points). Thus, it appears that 

other explanatory factors begin to play a more dominant role as English language skills improve 

beyond a basic level of English proficiency. 

When compared to national trends, English proficiency may have a more significant impact on 

homeownership rates in Washington DC metropolitan area because Hispanics only make up 9 percent 

of the population, which is 3 percentage points lower than the proportion of Hispanics nationally. As 

a result, there may be less demand in Washington DC for bilingual homeownership or credit 

counseling programs to assist Hispanic households with limited English skills. The smaller 

proportion of Hispanics may also serve to isolate them culturally from mainstream programs and 

financial institutions. 

Chapter 4. Washington DC Case Study 

70 
Organizations Interviewed in the Washington DC Area 

The remainder of this case study is based on full, in-depth interviews with representatives from three 

housing counseling agencies in the Washington DC metropolitan area, as well as shorter telephone 

interviews with a realtor, lender, and an additional housing counseling agency. Interviews were 

conducted with staff from the following organizations: 

Hispanic Committee of Virginia (HCV) 

The Hispanic Committee of Virginia (HCV) is an established non-profit agency that provides 

a wide variety of social services “to enable Hispanic immigrants to more fully participate in 

and contribute to American society.” HCV staff emphasized the holistic approach of the 

agency, which often assists households with multiple issues. Services include the 

homeownership program, education programs for adults and children, an employment and 

micro-enterprise program, an immigration assistance program, information and referrals, and 

general social services provided by a social worker. 

Based on HCV’s 2002-2003 annual report, most of HCV clients live in northern Virginia and 

nearly all of their clients (96 percent) are Hispanic and nearly all household heads (97 

percent) were born outside the mainland U.S. Approximately 94 percent of Hispanics served 

by HCV are employed full- or part-time, especially in the service industry, but almost half 

report earnings less than 50 percent of the median income in Fairfax County. The average 

client income was approximately $17,550. Few clients receive Temporary Assistance to 

Needy Families. Also, the majority of their clients speak English well and about one-third do 

not speak English or speak broken English. Clients are typically poorly educated and more 

than half (55 percent) have less than a high school education. 

Latino Economic Development Corporation (LEDC) 

Established in 1991, LEDC is a non-profit community development corporation in northwest 

Washington DC. The mission of LEDC is “to economically empower Washington, DC area 

Latinos and other emerging communities.” The organization provides business development 

services, homeownership counseling, and a façade improvement program for local 

businesses. The business development services include $500-$30,000 business loans for 

entrepreneurs. 

LEDC’s client population is similar to the Hispanic population served by HCV and other 

service providers. About 90 percent of their clients are Hispanic, especially Central 

Americans from El Salvador, Guatemala, and Honduras, as well as South Americans from 

Peru and Bolivia. The overwhelming majority are low- or moderate-income with poor credit 

histories and financial literacy skills. LEDC’s Hispanic clients tend to be married couples 

with 3 or 4 children. Most of their clients are immigrants who speak English poorly, and 

their native-born Hispanic clients are generally more educated than their foreign-born 

counterparts. 

Manna, Inc. 

Manna is “a non-profit developer that turns crumbling buildings, trash-filled lots and boarded 

shells into homes for low- and moderate-income families in DC.” Manna rehabilitates or 

builds new homes with in-house staff and a design-build approach. Manna staff report that 

Chapter 4. Washington DC Case Study 

71 
the organization is the largest affordable housing developer for homeownership in DC. The 

organization typically rehabilitates or builds three or four projects per year. All of the current 

projects are condos, but past projects included single-family homes. In addition to 

development, Manna also offers low-cost mortgage loans through Manna Mortgage 

Corporation, as well as homebuyer’s education through Homebuyer’s Clubs and an IDA 

program. 

The Program Coordinator described her Hispanic clients as primarily from El Salvador and 

most are middle-aged, single females or couples with two or three children. Most Hispanic 

clients at Manna have a high school education or less, have household incomes around 

$35,000 (usually two incomes combined), and work in service-related industry (e.g., hotels 

and janitorial work). About 10 percent of their clients speak at least some English and most 

have been in the country between 5-7 years. 

Weichert Realtors 

Weichert Realtors is a national real estate company that provides residential brokerage 

services. The realtor we spoke with provides comprehensive realty services to clients seeking 

homes in Northern Virginia. He assists households that are pre-approved for a mortgage to 

identify a property, formulate a bid, and negotiate a contract. He also provides any additional 

needed services, such as referrals or education about the homebuying process. 

Approximately 80 percent of his clients are Hispanic. He frequently refers clients to HCV for 

homeownership counseling and education. 

Citibank - CitiMortgage 

As an affiliate of Citibank, CitiMortgage recently made a $200 billion commitment to 

increase low- and moderate-income homeownership by 2010. The homeownership directive 

is being implemented through low-income homeownership products available in different 

parts of the country. CitiMortgage in Virginia has been working with Acorn to develop and 

implement a mortgage product that uses an ITIN in lieu of a Social Security Number. The 

product is described in more detail below. 

Association of Community Organizations for Reform Now (ACORN) 

ACORN is one of the largest grassroots organizations in the country dedicated to helping 

low- and moderate-income families. ACORN has advocated for low- and moderate-income 

families in numerous policy areas, including neighborhood safety, health and environmental 

justice, voter participation, employment and living wage, schools, housing, and community 

reinvestment. ACORN has recently partnered with CitiMortgage in Virginia to help develop, 

implement and operate a mortgage product that does not require a Social Security Number. 

The list of HUD-approved counseling agencies indicates there are 15 agencies providing housing 

counseling in Washington DC area.8

 Of these, four were interviewed for this study. Based on data on 

client volumes submitted to HUD for fiscal 2004, these four agencies combined accounted for 60 

percent of Hispanic counseling clients in the metro area, and 22 percent of all clients attending prepurchase workshops. 

The list of HUD-approved counseling agencies was obtained from the HUD Web site 

(www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm). 

Chapter 4. Washington DC Case Study 

72 

8 
Exhibit 4-9 displays the geographic location of these service providers within the immediate DC 

vicinity, and also shows the concentration of Hispanic renters in proportion to all households by 

census tract.9

 Weichert Realtors and Citibank are not shown on the map because these service 

providers have numerous branches located throughout the DC metropolitan area that are easily 

accessible. As the exhibit suggests, most of the service providers interviewed for this case study are 

located in areas with many Hispanic renters, and thus are well situated to engage potential Hispanic 

homebuyers. HCV and LEDC’s offices are located in neighborhoods that are within the highest 

quartile of concentration of Hispanic renters. Manna Inc and two of ACORN’s branch offices are 

located in areas with an above median concentration of Hispanic renters.10 

The exhibit also shows the distribution of Hispanic renters in proportion to all households throughout 

the immediate DC vicinity. There are large concentrations of Hispanic renters within the city’s 

Northeast and Northwest quadrants, especially in the Adams Morgan and Mount Pleasant 

neighborhoods that surround LEDC. There are also large concentrations of Hispanic renters in 

northern Virginia, especially near Alexandria and Arlington, and in southern Prince George’s County 

Maryland. 

9 The quartiles are defined as follows: 0 <= lowest quartile < 0.5 percent Hispanic renters; 0.5 <= below 

median quartile < 1.3 percent; Hispanic renters; 1.3 <= above median quartile < 4.0 percent Hispanic 

renters; 4.0 <= highest quartile < 71.3 percent Hispanic renters. 

10 There are two additional ACORN offices located in the Baltimore area, which are not displayed in the 

exhibit. 

Chapter 4. Washington DC Case Study 

73 
Exhibit 4-9: Percent of Hispanic Renters of All Households in the Washington DC Metropolitan Area, 2000 

Chapter 4. Washington DC Case Study

74 
4.2 Homeownership Barriers 

This section briefly reviews the key barriers to homeownership that were identified by interview 

participants in Washington DC. Overall, respondents identified many of the barriers that are 

highlighted in the homeownership literature, including lack of information, a limited supply of 

affordable housing, difficulties in accessing mortgage financing, and discrimination in housing and 

mortgage markets (for a review, see Cortes et al. 2005). Respondents indicate that Hispanics 

generally have a low level of understanding about the homebuying process, the importance of a sound 

financial history, and the mortgage qualification process. In addition, respondents mention that the 

paucity of affordable housing is a major barrier to Hispanic homeownership. Rising housing prices 

not only prevent some Hispanics from affording a home, but also discourage some Hispanics from 

seeking their services as homeownership appears to be an unattainable goal. Respondents also say 

that Hispanics have difficulties satisfying mortgage qualification requirements, and the mortgage 

market industry has not responded adequately to the needs of prospective Hispanic homebuyers. 

Lack of Information 

According to industry experts in Washington DC, the lack of knowledge about the home purchase 

and mortgage qualification processes among Hispanics is a key barrier to homeownership. 

Specifically, Hispanics often: 

• Do not understand the overall home purchase process. Service providers repeatedly 

pointed out that Hispanic households frequently do not know: how to start the 

homeownership process; how to begin the mortgage pre-approval process; how to search 

for housing; and how the homebuying process proceeds. Many Hispanics are unfamiliar 

with the full range of industry professionals, including lenders, realtors, closing agents, 

and title companies, and their role during the homebuying process. 

• Believe that homeownership is out of their reach. Service providers report that 

Hispanic households frequently believe homeownership is unattainable either because 

their incomes are too low or because they are not legal residents in the U.S. and lack a 

social security number. 

• Have incorrect perceptions about the downpayment and credit history requirements 

needed to qualify for a mortgage. Hispanics often assume that large downpayments 

and perfect credit are required to buy a home. Many Hispanics are generally unaware 

that non-traditional forms of credit, such as rent or utility payments, can help people 

without credit histories to qualify for a mortgage. The misperception that past credit 

issues may altogether prevent homeownership is also common according to service 

providers. Some respondents suggest that these perceptions were originally fostered by 

the experiences of Hispanics in their country of origin. 

• Have poor financial skills. All too often, poor financial skills lead to poor credit 

histories and inadequate savings. As a result, service providers are challenged to identify 

mortgage products that have flexible qualification requirements and are affordable to 

low-income buyers. 

Chapter 4. Washington DC Case Study 

75 
According to service providers, two factors intensify the misperceptions about homeownership 

among Hispanic households. First, language barriers could exacerbate these information gaps or, 

alternatively, cause a Hispanic household to trust an unscrupulous Spanish-speaking realtor or lender. 

In both situations, Hispanics with poor English-speaking skills are in a vulnerable position where they 

can be charged excessive fees, agree to higher interest rates or other burdensome terms, or purchase a 

home with higher monthly payments than are unsustainable in the long-term and likely to result in 

default. Several service providers report that Hispanics may inherently trust a Spanish-speaking 

Hispanic realtor or lender, particularly if they are from the same country of origin. Again, this 

dependency can create opportunities for unscrupulous industry players to take advantage of 

Hispanics. 

Second, some Hispanics do not understand that as a consumer they have the right to be selective in 

choosing industry experts to work with throughout the homebuying process. Several service 

providers emphasize that Hispanics are often not aware of their options and choices during the home 

purchase process and, as a result, can lead some households to feel overwhelmed and confused. 

According to respondents, selecting a real estate agent, lender, or a mortgage product is foreign to 

many Hispanic households, particularly households with language barriers. For example, one service 

provider reports that a Hispanic client assumed that lenders are required to offer the best mortgage 

interest rate available and, therefore, the household did not search other providers for better interest 

rates. Another service provider details a case where a household was required to pay Primary 

Mortgage Insurance (PMI) because his lender did not suggest the common practice of taking out a 

first mortgage for 80 percent of the home value and a second mortgage for the remaining amount to 

be borrowed to avoid paying PMI. 

Service providers identify two major challenges in overcoming the information gap among Hispanic 

households: a marketing gap and a lack of service capacity. The “marketing gap” refers to the fact 

that there is insufficient outreach to the Hispanic community to make them aware of the services 

available to help achieve homeownership. Although each agency conducted some type of marketing 

activity, only one engaged in active outreach into the community on a weekly basis by attending and 

making announcements at a variety of community meetings. Common marketing tactics included 

advertisements in Spanish language newspapers, limited television advertisements or public service 

announcements, and, for the realtor and lender, the formation of partnerships with community-based 

organizations. One such service provider comments that television advertisements on Spanish 

language channels are the most effective way to reach Hispanic households. After one public service 

announcement on a Spanish television channel, the agency received over 80 phone calls inquiring 

about their homeownership program. The realtor and the lender both identify relationships with 

established community-based organizations as an important way to reach prospective Hispanic 

homebuyers. 

The second challenge to overcoming the information gap is a lack of capacity within the community 

to serve every Hispanic household in need of homeownership services. A majority of the service 

providers comment that they are already operating at full capacity, although one agency has plans for 

expansion to a second office. All respondents believe there is a high demand for their services and if 

the marketing gap were bridged, their programs would be inundated with prospective Hispanic 

homebuyers. 

Chapter 4. Washington DC Case Study 

76 
Housing Market Barriers 

Every service provider cited housing affordability as a major barrier to Hispanic homeownership in 

the DC metropolitan area. While housing prices continue to rise, particularly for single-family 

homes, household income for Hispanic households remains low when compared to whites. 

According to data from the National Association of Realtors®, the median sales price of an existing 

single family home increased sharply from $277,900 in 2003 to $424,700 in 2005 – an increase of 53 

percent in just two years. Based on 2000 Census data, the annual median household income in the 

Washington DC metropolitan area is $48,931 among Hispanics and $65,357 among whites. Although 

service providers report that their Hispanic clients typically have more than one job, their 

employment is heavily concentrated in low-wage service industries, especially housekeeping or 

construction. Despite multiple income-earners, low-income Hispanic households are often unable to 

secure a mortgage due to inadequate household income. 

Housing affordability barriers also affect the housing preferences of Hispanic households. In DC, 

Latino neighborhoods are concentrated in the Northwest quadrant of the city, which also houses some 

of the most expensive housing stock. As a result, low-income Hispanic households must explore the 

Northeast, Southeast, or Southwest quadrants for more affordable homeownership opportunities. 

Service providers in DC report that Hispanic households are often wary of these areas due to a 

perception of crime and some choose to move to Maryland instead of staying in the District. In 

Virginia, Hispanic households have begun to move beyond Northern Virginia to Prince William or 

Louden Counties in search of affordable housing. Agencies in both areas are less sure about the 

impact that leaving an established Hispanic community has on housing choices for Hispanic 

households. 

According to service providers, Hispanics traditionally prefer to purchase single-family homes, but 

households are struggling to afford such homes on their own. One service provider notes that 

Hispanics prefer single-family homes because families tend be larger, therefore making it more 

difficult to find a condominium of adequate size. He estimates that about 90 percent of his clients 

who are homeowners purchased a single-family home, while 10 percent closed on a condominium. A 

new trend in Northern Virginia is for one or more Hispanic households or nuclear families, most often 

related, to purchase a single-family home together to overcome affordability issues. 

Service providers recognize that the affordability barrier is beyond the scope of their services. 

Although state and local subsidy programs exist to bridge the affordability gap for low- and 

moderate-income households, the effectiveness of such programs is questionable. For example, two 

service providers suggest that downpayment and closing cost assistance programs are inadequate for 

the current housing market. Program guidelines specifying the amount of subsidy and the maximum 

mortgage and housing price as a function of household income generally do not allow participants to 

purchase an average home in the DC area. In Northern Virginia, one service provider observes that 

the state’s housing subsidy and mortgage programs are also quickly becoming irrelevant in the 

escalating housing market. Overall, service providers believe that the current housing market is a 

“sellers’ market” where homes are not on the market very long and buyers routinely waive 

inspections to make their bid more attractive. Also, sellers are typically less willing to accept subsidy 

programs that require inspections and additional paperwork if they have other bids to consider. 

Chapter 4. Washington DC Case Study 

77 
Mortgage Market Barriers 

The confluence of several factors conspires to make it difficult for Hispanic households to qualify for 

a mortgage. As Burnett et al. (2004) describe, two requirements of many conventional mortgage 

products that are problematic for some prospective Hispanic homebuyers are a healthy credit score 

and a social security number for approval. In addition, compared to their white counterparts in the 

DC metropolitan area, Hispanics are disproportionately low-income. Mortgage market barriers are 

exacerbated by a lack of Spanish-speaking brokerage and lender staff. Although two respondents 

believe that a lack of English-language ability is not a major barrier in the housing industry, the 

lender reports that it is difficult to find and retain Spanish-speaking mortgage consultants to serve the 

Hispanic community. 

While service providers cite credit worthiness as a barrier, they also emphasize that a prospective 

buyer’s credit can be repaired, or that alternative information can be used to establish credit history. 

One service provider notes that as long as an individual has a legitimate social security number, 

everything else can be remedied over time. Housing counselors typically work one-on-one with 

families to resolve credit issues. To overcome a lack of credit history, lenders are also coming out 

with mortgage products that do not require a conventional credit history. Even the lack of a social 

security number is being addressed by new mortgage products that accept an Individual Tax 

Identification Number (ITIN) in its place. The ITIN can also be used to establish a credit history. In 

short, new mortgage products are fulfilling a market niche for undocumented Hispanic immigrants 

who are looking to purchase a home. 

4.3 Homeownership Services in Washington DC 

This section reviews the sundry services offered by participating organizations that are designed to 

expand homeownership opportunities for Hispanic households. The section reviews the nature of 

these services and their ability to promote homeownership among Hispanics in the Washington DC 

area. Most participating organizations offer a comprehensive package of homeownership services— 

particularly the housing counseling agencies—and organizations have developed networks of other 

service providers to supplement their services. The networks are usually based on informal 

relationships that have evolved over time and are based on client satisfaction and trust. Also, most 

organizations use a complementary approach to service delivery by offering both large group 

meetings and intensive one-on-one sessions with clients, although the representatives from the realty 

and mortgage companies focus exclusively on one-on-one meetings. All the organizations 

interviewed in the Washington DC area market their services through print, radio, and television 

outlets, although some expressed a “marketing gap” in reaching potential Hispanic homebuyers. 

However, most of these providers are operating at full capacity and do not have the resources to serve 

additional clients. 

Nature of Homeownership Services 

Exhibit 4-10 describes a variety of services offered by the organizations in the Washington DC area. 

The services are grouped into three main categories based on their relationship to the homebuying 

process. There are several services that affect a potential Hispanic homebuyer’s decision to pursue 

homeownership, including: homeownership counseling, financial education, immigration services, 

and outreach. A few organizations assist homebuyers in searching for a suitable home and by 

developing affordable housing. Also, several organizations help homebuyers obtain mortgage 

Chapter 4. Washington DC Case Study 

78 
financing by providing assistance with the mortgage qualification process, offering flexible mortgage 

products themselves, and guiding homebuyers through the closing process. Many of these 

organizations also provide referrals to other service providers, as well as an array of other supportive 

services. 

Exhibit 4-10 captures the services that are formally offered by each of these service providers. That 

is, the exhibit catalogs services that are coordinated within each provider and are part of the 

organization’s service profile. However, organizations often provide some of these services 

informally. For example, staff from these organizations may provide information on mortgage 

products, but if this is not formally part of the services they provide it is not checked here. 

Exhibit 4-10 

Types of Homeownership Services1

 Offered by Participating Organizations2 in Washington DC 

Homebuying 

Stage Type of Service 

Homeownership 

Counseling 

1. Deciding to 

Pursue 

Homeownership Financial Education 

2. Searching Housing Search For 

and Finding a 

Suitable Home 

Affordable Housing 

Development 

Mortgage 

Qualification 

Mortgage Products 

Wealth Building 

Immigration Services 

3. Obtaining 

Mortgage 

Financing 

Closing Assistance 

Post-Purchase 

Counseling 

Other Referrals

Other1 

Hispanic 

Committee 

of Virginia 

3 

3 

3 

3 

3 

3 

Latino 

Economic 

Development 

Corporation 

3 

3 

3 

3 

3 

Manna, 

Inc. 

Weichert 

Realtors Citibank 

3 

3 

3 3 

3 

3 3 

3 3 

3 

3 

3 

3 3 3 

3 1 Participating organizations also offer a variety of other services, including: small business start-up counseling; employment and 

legal services; day care facilities; adult and youth education; Section 8 Affordable Housing Preservation program, Single Family 

Rehabilitation program, Façade Improvement Program, and social services. 

2 ACORN is not included in this exhibit because the organization was interviewed exclusively for their work on a pilot program that 

uses ITIN numbers in lieu of SSN. 

Chapter 4. Washington DC Case Study 

79 
Deciding to Pursue Homeownership 

Past research suggests that many Hispanics are dissuaded from considering homeownership and are 

less confident about completing the homebuying process because they lack sufficient and reliable 

information about the homebuying process. Several organizations interviewed in the Washington DC 

area are providing services designed to bridge this information gap. HCV, LEDC, and Manna each 

focus on expanding homeownership opportunities among Hispanics by providing formal 

homeownership counseling, financial education courses, and immigration services to the Hispanic 

community. 

Homeownership Counseling and Financial Education 

HCV’s homeownership counseling program began in 2003 with the goal of improving “the standard 

of living in the community by helping Hispanic Northern Virginia residents find homes at reasonable 

cost while educating them about the value of home ownership and the home ownership process” 

(HCV Annual Report, 2003). HCV’s homeownership counseling consists of free one-on-one 

meetings with potential homebuyers, as well as a group homeownership education seminar that is 

offered on the last Saturday of every month. The homeownership counseling program is run by two 

housing counselors, with one of the counselors managing the program. During the one-on-one 

sessions, housing counselors work with clients to construct an accurate financial picture of the 

household and develop a financial plan for homeownership. HCV provides homeownership 

counseling and financial education services to approximately 60 clients monthly. 

In addition, HCV offers a six-hour homeownership group seminar that is based on a standard 

curriculum provided by the Virginia Housing and Development Authority (VHDA). The curriculum 

reviews five key steps in becoming a homeowner. Step one focuses on understanding a client’s 

personal finances and credit reports, developing a spending plan, and learning how a credit history 

and credit score impact a client’s ability to purchase a home. Step two focuses on the role of the 

lender and on understanding the mortgage qualification process. The VHDA curriculum includes 

sample mortgage applications and guidance on how to avoid predatory lending practices. In step 

three, clients learn how to work with a real estate agent, and how to identify a house that meets their 

financial constraints and personal preferences. The fourth step in the VHDA curriculum teaches 

participants about the home inspection process and understanding the difference between a home 

inspector and an appraiser. The final step focuses on closing the mortgage loan and understanding the 

legal documents that are part of the closing process. Sample documents are provided, including a 

Deed of Trust, Note, and Settlement Statement. HCV invites real estate agents, mortgage lenders, 

and other housing professionals to attend and present portions of the seminar. 

Similarly, one of LEDC’s goals11 is to increase homeownership among Hispanics though 

homeownership counseling, financial training, and loan packaging services. The focus of LEDC’s 

homeownership program is both to familiarize clients with the home purchase process generally and 

with the District of Columbia’s Home Purchase Assistance Program (HPAP). LEDC offers one-onone homeownership counseling and homeownership education seminars. During the individual 

counseling sessions, staff collect basic information on each client, explain how to qualify for HPAP 

LEDC is also committed to “increasing the number, strength, and wealth-creating capacity of Latino 

businesses through LEDC’s Emerging Business Loan Fund,” and “increasing economic vitality by 

investing directly in small businesses and real estate development, thereby creating business ownership, 

management, and employment and affordable homeownership opportunities for Latinos” (website: 

www.ledc.org). 

Chapter 4. Washington DC Case Study 

80 

11 
assistance, and identify a variety lenders, real estate agents, and insurance and settlement companies 

that clients may choose. 

LEDC’s homeownership seminar covers the fundamentals to becoming a homeowner: budgeting, 

credit, applying for a mortgage, the housing search process, and closing on a house. The 2-hour 

homeownership seminar is offered twice monthly. Two full-time and two part-time counselors 

conduct the counseling sessions and seminars, and a Housing Director supervises the homeownership 

program. A full-time housing counselor sees about 10-15 clients per week, or about 40-60 clients 

monthly. 

Manna Inc. provides many housing services in-house. In 1988, Manna created one of the first 

Homebuyer Clubs in the country, which are peer support groups and homeownership counseling 

programs. The goal of Manna’s Homebuyer Club is to encourage participants to save for a 

downpayment on a home, and also to provide participants with the skills and knowledge necessary to 

successfully complete the mortgage application and approval process. Manna staff interview each 

prospective homebuyer to determine his or her readiness for buying a home. Prospective homebuyers 

are placed in a chapter of their Homebuyers Club, which vary by level of readiness and language 

skills. Each chapter contains 20 to 30 people and meets once a month for a 90-minute session of peer 

support and educational training. 

The chapter sessions provide an opportunity for participants to discuss how they were able to meet 

their savings goals during the past month, or explain why they fell short of their intended goals. 

Participants are encouraged to support the development of better money management and budgeting 

skills, and also to challenge each other to meet the savings goals of each participant. At the end of 

each session, participants set new saving goals for the following month. The chapter sessions also 

provide an opportunity for Manna Homebuyers Club staff, and occasionally community volunteers, to 

present materials on how potential homebuyers can prepare themselves for the homebuying 

experience. The materials focus on a variety of topics, including: personal budgeting, checking 

accounts, credit, saving, finding a home, homeownership, types of ownership, home purchase 

assistance, mortgages, and applying for a mortgage. A light dinner is served before each chapter 

session and childcare is also provided as needed. 

Searching For and Finding a Suitable Home 

Housing Search 

To assist potential homebuyers with the housing search process, Manna has several marketing 

specialists that match prospective homeowners with available properties based on household income, 

family size, and neighborhood preferences. The marketing specialists help prospective homebuyers 

become familiar both with the homebuying process and the variety of affordable mortgage products 

available. Staff acknowledge that high housing prices have limited the housing options of many 

Hispanic and low-income households. 

Similarly, the realtor from Weichert Realtors also provides housing search assistance to all of his 

clients. The realtor believes that most clients want to stay near their current community, but a few are 

willing to move into a new neighborhood to find an affordable home. According to the realtor, 

Hispanic clients place a priority on living space, proximity to work (usually the downtown DC area), 

and their current neighborhood when searching for a home. Space is particularly important for 

multiple households that are purchasing a home together, which is increasingly common among 

Hispanics. In these situations, Hispanics often want a basement to help accommodate the different 

Chapter 4. Washington DC Case Study 

81 
households. The realtor also views high housing prices as a major factor that limits the housing 

search options of low-income Hispanics, especially in Arlington, Alexandria, and Fairfax County. 

Both the marketing specialists from Manna and the realtor from Weichert Realtors accompany the 

potential homeowners to properties that meet the financial and personal constraints of the household 

and are available for purchase. 

Affordable Housing Development 

Manna has experience in developing affordable housing in Washington DC. Beginning in 1994, 

Manna renovated 34 condominium units on ten properties near the block of Galveston Place, SW. 

The neighborhood was an open-air drug market prior to the redevelopment. A year later, Manna 

purchased and renovated two abandoned apartment buildings in the Brookland area (at 12th & Perry 

Streets, NE). Twenty-six new homeowners currently occupy Brooklander Condominiums. 

Beginning in 2000, Manna demolished the abandoned William Syphax School at 1360 Half Street, 

SW to make way for the construction of 29 new townhouses and 12 condominium units. All of these 

units are targeted for low-income households. Manna’s housing search specialists will refer clients to 

these units as they become available. 

Manna supplements their work on developing affordable housing with broader community 

development work. In 1999 Manna worked with the Bellevue Improvement Council and a 

neighborhood organization, Operation Crackdown, to closedown a drug trafficking site near the 

Galveston Place redevelopment. Manna has been involved in similar activities throughout Southeast 

and Southwest DC. 

Obtaining Mortgage Financing 

Mortgage Qualification 

Several organizations interviewed in the Washington DC area help Hispanic clients with the mortgage 

qualification process. As part of the routine intake process, HCV counselors pull a client’s credit 

report at no charge, review a client’s budget, and then create a financial action plan that helps the 

client repair or establish credit before applying for a mortgage. If the client is ready to apply for a 

mortgage loan, the counselor reviews several mortgage options and forwards the client’s financial 

information to the appropriate lender. The housing counselors typically review county and state 

mortgage products, particularly mortgage products offered through the Virginia Housing 

Development Authority (reviewed below). If the household does not qualify for a governmentsponsored mortgage product, the housing counselor assists clients in identifying at least three possible 

mortgage lenders and forwards client information to these lenders. All clients that receive mortgage 

qualification assistance from HCV counselors are required to attend the monthly homeownership 

seminar. 

After several mortgage products are identified, HCV staff and clients review them and help the family 

decide which product is most appropriate. According to the housing counselor, HCV’s 

homeownership program emphasizes and continuously reminds Hispanic clients that they have a 

choice about which industry professionals to choose. HCV staff are available to assist the client at 

any point during the mortgage qualification process. 

The approach by LEDC staff is similar to that used by HCV staff. Staff from LEDC complete an 

intake form with the client during the first appointment and also review the city’s HPAP 

homeownership program. LEDC counselors pull the client’s credit report (for a $20 fee) and assist 

Chapter 4. Washington DC Case Study 

82 
the client in applying for an HPAP mortgage product. The household is responsible for compiling all 

of the necessary documentation to apply for the program, and LEDC staff acknowledge that 

incomplete information is the primary reason for delays in submitting applications. In particular, 

LEDC staff say that employment information is especially difficult to document because Hispanic 

clients frequently change jobs and the HPAP application requires evidence of a two-year work 

history. Furthermore, the HPAP program requires a valid social security number. If the individual is 

unable to provide these documents, LEDC housing counselors may refer the individual to other 

organizations for assistance, although staff acknowledge that few options are available for clients 

without valid social security numbers. 

Mortgage Products 

HCV refers many of their clients to the Virginia Housing Development Authority (VHDA) for 

mortgage product assistance. VHDA offers an array of home loan options designed to meet the needs 

of first-time homebuyers, summarized in Exhibit 4-11. VHDA offers conventional products with 

below-market fixed rates, no downpayment requirements, and closing cost financing options. VHDA 

also offers two FHA products—a standard FHA insured loan and a FHA Plus product. The FHA Plus 

is a VHDA-financed, FHA-insured home loan that is designed to assist qualified borrowers who need 

downpayment and closing costs assistance, although borrowers must have at least 1 percent of the 

sales price available in cash. 

Exhibit 4-11 

VHDA First-Time Homebuyer Loan Programs 

Loan Payments Current Rate Downpayment 

Closing costs 

options 

Conventional 

Fixed 

30-yr fixed rate, 

below-market 4.875% No downpayment Option to finance 

closing costs 

FHA Insured Below-market, 

VHDA fixed rate 4.875% Low downpayment None 

FHA Plus Low, stable, fixed 

monthly payment 5.125% No downpayment Option to finance 

closing costs 

1st Choice 

Interest Only 

30-yr fixed rate, 

Interest-only for 

first 7 years 

5.625% No downpayment None 

Step Rate Loan 

Variable rate 

during years 1 

and 2; fixed rate 

during years 3-30 

Year 1: 3.5% 

Year 2: 4.5% 

Years 3-30: 5.50% 

No downpayment None 

Also, VHDA’s “1st Choice Interest Only” program offers a 30-year fixed rate interest-only loan for 

the first 7 years (principal payments begin in the 8th year). Because the loan product does not require 

mortgage insurance and the first 7 years are interest-only, the product can potentially save borrowers 

as much as 25 percent on their monthly mortgage payment during the first 7 years, when compared to 

Chapter 4. Washington DC Case Study 

83 
a market rate conventional loan.12 However, monthly payments increase in year 8 and remain fixed 

thereafter. 

Prospective homebuyers that visit LEDC are often referred to the city’s HPAP program. Based on 

median income guidelines, households qualify for low- or no-interest loans to assist with 

downpayment and closing costs. Payments on HPAP loans are deferred for five years. According to 

income guidelines, moderate-income applicants qualify for $10,000, lower-income applicants qualify 

for $20,000, and very-low-income households qualify for $30,000. Income requirements are based 

on a sliding scale, depending on the number of persons in the household, and can range between 

$65,750—$99,800 for moderate-income households, $47,800—$85,400 for low-income households, 

and $29,850—$56,350 for very low-income households. Also, an applicant must: 

• Be a resident in DC for a minimum of one year; 

• Be a first time homebuyer; 

• Be able to maintain regular payments on all costs of homeownership; 

• Have a good credit history and stable sources of income; 

• Meet the HPAP income guidelines; 

• Have funds to contribute to the downpayment on the house; and 

• Be able to secure financing for a first mortgage loan. 

The HPAP application takes one to two months for the City to process. After the family receives the 

HPAP subsidy, LEDC staff refer clients to lenders to apply for a mortgage. After the household is 

approved for the HPAP and a mortgage, the housing search process begins. 

Of particular importance to Hispanics in the Washington DC area is a pilot program started recently 

by Citibank and supported by the Association of Community Organizations for Reform Now 

(ACORN). The mortgage product program was initiated in September 2004, and allows applicants to 

use an Individual Taxpayer Identification Number (ITIN) in lieu of a Social Security Number. All 

applicants are required to attend a homebuyer counseling program, demonstrate residency in the U.S. 

for at least two years, and document two consecutive years of work history. Applicants with no credit 

history can submit alternative forms of credit, including electricity bills, automobile and insurance 

payments, and other payments that establish a household’s ability to pay bills regularly. The pilot 

program is administered in conjunction with Citibank’s Closing Cost Advantage program, which 

provides $3,000 in grant funding for closing cost assistance. From September 2004 through August 

2005, an ACORN representative estimates that 20 households have closed on a property using the 

pilot program and none of them have foreclosed. Most of these clients were referred to Citibank by a 

realtor. 

VHDA’s website: 

http://www.vhda.com/vhda_com/Template_A.asp?VHDA_COM_PAGE_NAME=1stChoiceInterestOnly 

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12 
Wealth Building 

Manna complements their Homebuyers Club with an Individual Development Account (IDA) 

program. Manna’s IDA program is competitive, and participants must commit to a long-term savings 

and education plan in order to be enrolled. Space is limited to three classes of 15 people a year. 

Once enrolled, participants must complete Manna's Financial Literacy Training Program (FLTP), 

which is a 10-week course that focuses on money management skills, including: budgeting, bill 

payment, record keeping, checking accounts and financial institutions, credit cards and credit 

management, consumer awareness and expense prioritization, as well as saving and planning for the 

future. The course is based on the Neighborhood Reinvestment Corporation’s “Realizing the 

American Dream” curriculum. The IDA classes are only given in English. Following the completion 

of the FLTP seminar, participants must open an IDA account with a minimum of $90 and are invited 

to join one of Manna's Homebuyers Club chapters. Participants are required to save $33.33 per 

month for two years, totaling $800 at the end of the program. Manna matches the participant’s 

savings with a 5-to-1 contribution, which provides each participant with $4,800 for the downpayment 

and closing costs on a Manna home. 

Manna's IDA program receives matching funds from the Capital Area Asset Building Corporation 

(CAAB), a non-profit organization in Washington DC. In order to qualify for matching funds, an 

individual must commit to saving towards a specific asset goal, enroll in the organization’s financial 

literacy and asset training courses, and meet household income guidelines. 

Immigration Services 

HCV assists immigrants and their families to obtain proper documentation and become permanent 

residents or citizens. An immigration attorney offers individual counseling assistance and helps 

clients understand and expedite their immigration cases. Specifically, the immigration attorney 

provides specialized assistance with: 

• Citizenship; 

• Permanent residency; 

• Work permits; 

• The Nicaraguan Adjustment and Central American Relief Act (NACARA)13; 

• Visa applications (especially the new K and V Visas, and the existing H-1B Visas); 

• Temporary Protective Status applications; 

• Renewal of Green Cards; and 

• Visa lottery applications; 

HCV facilities have cameras and other equipment needed to compile the necessary documents. In 

2002, HCV provided over 5,200 immigration-related services to over 1,500 families. By May 2003, 

HCV’s immigration program served more than 520 clients in one month. 

NACARA provides various forms of immigration benefits and relief from deportation to certain 

Nicaraguans, Cubans, Salvadorans, and Guatemalans (as well as nationals of former Soviet bloc countries 

and their dependents). 

Chapter 4. Washington DC Case Study 

85 

13 
Closing Assistance 

Most of the providers interviewed in Washington DC provide some form of closing assistance, 

typically in the form of informal services. For example, providers will explain the closing process to 

clients and answer questions as needed. The Virginia realtor provides formal closing assistance by 

helping each client write and submit bids, submit the final contract to the lender and title company, 

and attend the settlement. The realtor always advises the client to use an attorney and refers clients to 

a bi-lingual attorney as needed. If the household uses an English-speaking attorney, the realtor 

recommends that the household bring a relative or friend to the closing to translate. The realtor has 

an established network of lenders, settlement agencies, and other real estate professionals that he 

prefers to work with based on past experience. Overall, he always emphasizes the client’s ability to 

choose who they work with during the process. 

Service Provision and Outreach 

This section describes the scale of service provision delivered by each organization, the level of 

service coordination among service providers in the metropolitan area, and the types of outreach that 

these organizations conduct to market their services. The section also discusses the perceived 

demand for their services. 

Service Provision 

In the first quarter of FY2004-05, staff from HCV served approximately 283 individuals with one-onone counseling and 189 individuals in the homeownership seminars. Seventy-five clients have closed 

on homes. Each HCV housing counselor has approximately 32 open cases, which is twice their case 

load compared to last year, and the current budget does not allow for hiring additional counselors. 

Overall, HCV staff view their group homeownership education seminars and one-on-one counseling 

as complementary. The group seminars provide clients with a general understanding of personal 

finances, credit reports, the mortgage qualification process, the roles played by various industry 

stakeholders, the home inspection process, and the legal documents that are part of the closing 

process. The seminars are an essential first step in learning about the homebuying process. The oneon-one counseling offers individualized attention that clients do not receive in the seminars. Clients 

often have questions about their personal finances that are not asked during the seminars because of 

privacy concerns. Thus, both of these types of service delivery approaches are viewed by HCV staff 

as critical to bridging the information gap. 

In the past three years, LEDC has packaged nearly 400 client loan packages for the HPAP program in 

Washington DC; and 61 families – almost all Latinos – were able to purchase homes. The low 

success rate among applicants is due mostly to rejection by the HPAP program and failure to obtain 

mortgage financing. LEDC staff speculate that households that do not close on homes are unable to 

complete the homebuying process due to such factors as an inability to produce the necessary 

documentation, insufficient savings for a downpayment, and low incomes. Nevertheless, LEDC staff 

believe that their housing counseling services are very effective in helping Hispanic households 

achieve homeownership, although external factors such as rising housing prices are increasingly 

difficult to overcome. LEDC staff believe that homeownership seminars are more effective service 

models than one-on-one counseling because the group atmosphere helps people feel more 

comfortable and participants learn from others’ questions. LEDC staff also note that maintaining 

flexible office hours is important when serving Hispanic populations due to the nature of their 

Chapter 4. Washington DC Case Study 

86 
employment schedules, e.g., seasonal work, multiple jobs, weekend jobs, and day- and night-time 

shifts. 

At Manna, staff believe that a successful homeownership program is built on respect for each client, 

and also on the provision of supportive services, such as daycare, that allow single parents to attend 

classes. Manna staff have helped 225 households close on a home since 1994, and acknowledge that 

downpayment and closing cost assistance programs are increasingly less effective due to escalating 

housing prices and program requirements. According to Manna staff, sellers frequently do not want 

to deal with a buyer that is using the HPAP program, for example, due to the required paperwork and 

because the HPAP program is strict about conducting housing inspections. Staff from Manna, as well 

as HCV, believe that because the metropolitan housing market is highly competitive, buyers are 

forced to waive inspections and appraisals. As a result, many buyers are taken advantage of during 

the homebuying process. 

The Virginia realtor estimates that he serves about 55 clients in a year, 80 percent are Hispanic, and 

approximately 30 to 40 of these clients purchase homes. Thus, the realtor estimates that he helped 

about 24 to 32 Hispanics purchase homes last year. Clients who do not purchase a home generally 

postpone homeownership for personal reasons or are discouraged by the high cost of housing. 

Partnerships and Service Coordination 

Partnerships with other service providers throughout the Washington DC metropolitan area play an 

important role for all the providers in the case study, albeit the level of coordination across various 

providers is unclear. The overwhelming majority of HCV’s participants hear about their 

homeownership program by word of mouth and walk-in for services. Some clients (approximately 20 

percent) are referred from industry professionals, such as realtors, lenders, or other service providers. 

HCV staff also refer clients to appropriate housing professionals as needed from a network of service 

providers developed informally over the past 2 years. The service network is based mostly on client 

satisfaction and on trust. HCV relies on service providers that receive praise from clients and also 

demonstrate that their client’s interests were served. However, the manager of HCV’s 

homeownership counseling program acknowledges that many homeownership-related organizations 

serving Hispanics tend to keep referrals “in the family.” The manager believes that family-based 

networks are less likely to serve the best interests of the client and place clients in a vulnerable 

position. 

LEDC have developed more formal relationships with other service providers in the area. LEDC 

staff tend to refer clients to three primary organizations—Citibank, Bank of America, and Manna 

Inc.—as these organizations have Spanish-speaking professionals on staff. Language barriers are 

more common among other non-profit groups and community development corporations that develop 

affordable housing units in Washington DC because they typically lack to the resources to augment 

their staffing with a Spanish-speaking professional. LEDC staff seldom refer clients to housing 

professionals that are located in surrounding suburbs. Thus, LEDC’s network of service providers is 

small. 

Likewise, the realtor has an established network of lenders, settlement agencies, and other real estate 

professionals that he prefers to work with based on past experience. The realtor will always 

emphasizes the client’s ability to choose who they work with during the process, but a list of industry 

stakeholders will be provided to facilitate the process. 

Chapter 4. Washington DC Case Study 

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As described above, an interesting partnership that has developed recently between Citibank and 

ACORN involves a pilot program that allows applicants to use an ITIN in lieu of a Social Security 

Number. Citibank will administer the program in conjunction with their Closing Cost Advantage 

program and ACORN will serve as the HUD-certified homebuyer counseling agency that will work 

with the client to collect the needed documentation and learn about the homebuying process. Both 

the realtor and representatives from ACORN are enthusiastic about the program and eager to 

implement the program more broad if the pilot program is successful. 

Marketing Homeownership Services 

Marketing is a challenging activity for many of these service providers and few have the resources to 

engage in broad marketing strategies. Near all staff emphasize the need to have more effective 

marketing approaches to inform prospective homebuyers about their services. For example, HCV 

purchased advertisement time on Telemundo, a Spanish television channel, and received over 80 

inquiries the next day. According to the program manager, providers of homeownership services 

confront a “marketing gap” that limits their ability to serve more Hispanic clients. According to the 

program manger, unlike realtors and lenders, housing counseling agencies are not well branded in the 

industry. As a result, housing counseling agencies have difficulties reaching Hispanics that could 

benefit from their services. Staff at Manna echo the views of HCV staff by highlighting a marketing 

gap that limits the number of potential homebuyers that are aware of their services. 

Demand for Homeownership Services 

In Washington DC, the potential pool of Hispanic renters that could benefit from these services is 

large. Exhibit 4-12 presents the distribution of Hispanic renters and homeowners in Washington DC 

as a percent of the area median income (AMI). Most service providers in the case study target 

Hispanics earning between 50 and 80 percent of AMI, although service providers will serve any 

Hispanic that seeks their services. As the exhibit suggests, Hispanics in this income category 

represent 25 percent of all Hispanic renters (or 9,272 households), and thus constitute a large pool of 

clients. In addition, nearly one-quarter of Hispanic renters earn between 80 and 120 percent of AMI, 

which is typically too high to qualify for homebuying and mortgage assistance but insufficient to 

purchase a home on their own. Thus, there is a fairly large pool of Hispanic renters in Washington 

DC that are in a good position to become homeowners but are left to their own devices. 

Exhibit 4-12 

Distribution of Hispanic Renters and Homeowners by Percent of Area Median Income in 

Washington DC, 2000 

<50% of AMI 

50-79.9% of AMI 

80-119.9% of AMI 

>=120% of AMI 

Total 

Hispanic Renters 

Number Percent 

22,107 36% 

15,641 25% 

13,772 22% 

9,899 16% 

61,419 100% 

Hispanic Homeowners 

Number Percent 

6,383 14% 

9,272 20% 

12,166 26% 

19,393 41% 

47,214 100% 

Total 

Number Percent 

28,490 26% 

24,913 23% 

25,938 24% 

29,292 27% 

108,633 100% 

Source: Integrated Public Use Microdata Series (IPUMS) data from U.S. Census 2000 PUMS 5% sample 

Chapter 4. Washington DC Case Study 

88 
All service providers agree that the demand for their services is great and increasing every year. 

HCV’s program manager expects to far exceed their target goals for this fiscal year, and the program 

is currently running at full capacity. Indeed, HCV staff believe there is a very large demand for 

homeownership counseling and financial education services, noting that less than 10 percent of 

homebuyers in the Virginia area use a housing counselor. However, HCV is also operating at, or 

near, full capacity, and program staff doubt that they could serve many more clients. 

Similarly, staff from LEDC and Manna, as well as the realtor, agree that the demand for their services 

and for affordable housing in Washington DC is extraordinarily high. Each provider agrees that if all 

Hispanic renters in the DC area were aware of their services, about 50 percent would contact them for 

services. According to these service providers, there is plenty of evidence to support this view. For 

example, in 2004, Manna conducted a lottery for 13 units of affordable housing in northwest DC and 

250 households applied for the lottery. The realtor believes there is a high demand for his services 

because of the booming housing market and also because of the poor understanding of the 

homebuying process among Hispanics. In particular, the realtor believes that Hispanics (as well as 

other prospective homebuyers) do not understand if a mortgage is appropriate to their circumstances, 

and some households are approved for mortgages or terms that they cannot sustain in the long run. 

The realtor cites the use of mortgages with adjustable interest rates as an example because some 

Hispanics are unaware of the mortgage rate increases that potentially follow the initial few years with 

a low rate. The realtor concludes that education about the homebuying process is critical to 

expanding homeownership opportunities to Hispanics. 

However, most of these organizations are operating at full capacity. LEDC is currently operating 

near capacity—each housing counselor sees 10-15 clients per week and each case is open for 

approximately 2 months. At Manna, the coordinator believes that their homebuyer counseling and 

IDA programs could serve a few more participants, but demand for services has increasingly strained 

services and demand will soon exceed their service capacity. Recent analyses of 2004 Census 

population estimates suggests that the Washington DC metropolitan area has experienced sizable 

growth among the Hispanic population since 2000. The metropolitan area is ranked 9th among the 

largest population gains nationwide, and these new Hispanic households will likely strain the service 

system’s capacity to provide services to prospective homebuyers. 

4.4 Conclusions 

The interviews with several key organizations in the Washington DC metropolitan area serving 

Hispanics highlight three main themes. First, potential Hispanic homebuyers in Washington DC need 

a range of services to confront multiple barriers to homeownership. The services are needed to help 

Hispanics pursue homeownership, search for and find suitable housing, and obtain mortgage 

financing. While these services are available throughout the Washington DC metropolitan area, 

Hispanics must cobble them together from a sequence of organizations. Most service providers have 

developed a network of referral organizations that can help Hispanics identify and connect with 

needed services. 

Second, the potential demand for services appears to be much greater across the Washington DC 

metropolitan area than the existing service capacity. Most key service providers are operating at full 

capacity and all of them acknowledged that many more clients need their services. Many of these 

Chapter 4. Washington DC Case Study 

89 
service providers target Hispanics earning less than 80 percent of AMI, which constitutes over 60 

percent of all Hispanic renters in the area. As service providers improve their marketing capacity, 

many of them except to be overwhelmed with requests for their services. Service capacity may also 

be strained by households with incomes between 80 and 120 percent of AMI who have been left to 

their own devices but may need assistance as well. 

Third, housing affordability is a primary concern in the Washington DC metropolitan area. Although 

Hispanic households in Washington DC have higher annual incomes and are generally more educated 

compared to their counterparts nationally, median annual incomes lag far behind white households 

and housing appreciation in the area has been dramatic. The efficacy of housing counseling programs 

and other important service providers in the Washington DC area is constrained by these housing 

market realities. Service providers have been able to link Hispanics to some financial assistance 

programs, but the amount of assistance is small relative to the rising cost of housing. 

Although state and local subsidy programs exist to bridge the affordability gap for low- and 

moderate-income households, the effectiveness of such programs is questionable. Downpayment and 

closing cost assistance programs appear to be inadequate for the current housing market because the 

amount of subsidy and the maximum mortgage and housing price do not allow participants to 

purchase an average home in the DC area. Similarly, Virginia’s housing subsidy and mortgage 

programs are also quickly becoming irrelevant in the escalating housing market. In addition, industry 

representatives are concerned that in a “sellers’ market” buyers routinely waive inspections to make 

their bid more attractive and sellers are often less willing to accept subsidy programs that require 

inspections and additional paperwork if they have other bids to consider. 

Chapter 4. Washington DC Case Study 

90 
Chapter Five 

Conclusion 

This report explores Hispanic homeownership rates and gaps in three market areas: Orlando, San 

Antonio, and Washington DC. For each market, the report provides an in-depth analysis of Hispanic 

homeownership rates and gaps and the efforts to address these gaps by exploring: 

• The demographic profile of the Hispanic population; 

• Hispanic homeownership rates and gaps in comparison to national trends and to nonHispanic whites; 

• Major barriers to Hispanic homeownership, including lack of information about the 

homebuying or mortgage qualification process, as well as barriers in the housing and 

mortgage markets; 

• The services offered by providers to improve Hispanics’ access to homeownership 

opportunities; and 

• The scale of, and demand for, homeownership services, as well as approaches to 

marketing and coordinating services. 

The report is based on analysis of data from the decennial census and in-depth interviews that were 

conducted onsite with staff from a range of service providers, including housing counselors, 

affordable housing developers, mortgage lenders and loan officers, and real estate agents. Each of 

these industry representatives provides an important perspective about the barriers confronting 

Hispanics and about the ability of service providers to address these challenges. Overall, the 

interviews highlight six main themes. 

Hispanic homeownership rates and gaps are shaped by the demographic and socioeconomic 

characteristics of Hispanics. Communities were purposively selected to provide a diverse 

demographic and socioeconomic profile of Hispanics, because past research suggests that some 

attributes that vary from place to place explain why Hispanic homeownership rates lag behind nonHispanic white rates. The case studies confirm this hypothesis. For example, the three case studies 

highlight the different barriers faced by the three predominant Hispanic groups represented in these 

communities: Puerto Ricans, Mexicans, and Central Americans. Puerto Ricans represent over half 

the total Hispanic population in Orlando and, unlike other Hispanic groups, all Puerto Ricans are legal 

citizens, which grants them access to mortgage products that are not available to undocumented 

Hispanics. By contrast, proper documentation among Mexicans and Central Americans is a problem 

identified by service providers in San Antonio and Washington DC. The service providers 

interviewed in San Antonio do not serve undocumented Hispanics, while a provider in Washington 

DC addresses this issue by providing immigration services to help establish legal residency. 

In Orlando, migration patterns play an important role in understanding homeownership rates and 

barriers. Hispanics from the North (e.g., Boston and Chicago) and from Miami are moving to Central 

Florida and these Hispanics generally are better off financially and are able to purchase homes in 

Central Florida. Census 2000 data suggests that 69 percent of Hispanics in the Orlando metropolitan 

Chapter 5. Conclusion 

91 
area were in a different house in 1995, and among these Hispanics, 26 percent came from a different 

state (more than half of them from the Northeast). These Hispanics are potentially responsible for 

driving the higher homeownership rates in Orlando when compared to those of other metropolitan 

areas. 

In San Antonio, Hispanics comprise a large share of the total population (45 percent in 2000), and 

service providers repeatedly indicated that their size partially explains why homeownership rates in 

San Antonio are higher than most other metropolitan areas. The demand for homeownership services 

among Hispanics grows as the Hispanic population grows, which, in turn, prompts more service 

providers to offer targeted services to Hispanics. For example, providers say that there are more 

Spanish-speaking professionals working in both the housing and mortgage markets because the 

demand for these services compels these markets to hire Spanish-speaking staff. 

Also, the Washington DC case study demonstrates that Hispanic homeownership gaps do not always 

narrow as household income increases. This finding counters the prevailing association between 

income and homeownership rates that has been established in the literature. Although Hispanic 

homeownership rates increase steadily as income levels increase, gaps do not show any pattern of 

increase or decrease as income increases; rather they fluctuate between 19 percent and 28 percent 

across all income levels. The fluctuations in gaps in Washington DC may be attributable to the 

transient professional, diplomatic, and other international representatives that tend to rent for short 

periods of time and then return to their home country. 

In addition to these market-specific phenomenon, the case studies highlight several barriers that are 

common across all markets. For example, service providers highlight several demographic 

characteristics that contribute to Hispanic’s propensity to become homeowners: income, English 

proficiency, and country of origin. A disproportionate share of Hispanic households are low-income, 

which is related to the generally low education levels among Hispanics and the relatively high share 

that work in the service industry. As a result, many Hispanics, particularly in high cost markets, are 

unable to afford a decent home in an attractive neighborhood. However, the case studies also suggest 

that many Hispanics earn enough income to be able to buy a home with the help of a variety of 

downpayment assistance programs. 

Service providers also indicate that clients’ English proficiency is an important factor because 

language skills affect their ability to understand both the homebuying and mortgage qualification 

processes, which in turn reduces their willingness to consider pursuing homeownership opportunities. 

Hispanics with poor English language skills are unable to understand credit reports, tax forms, or 

other documents that are used as part of the homebuying and mortgage qualification process. 

Hispanic immigrants are also more likely than native-born citizens to be illiterate and thus have 

trouble understanding basic forms, such as a housing counseling agency’s application form. These 

clients need individualized one-on-one counseling to help translate and explain each document. 

Moreover, poor English language skills also discourage Hispanics from contacting a housing 

counseling agency for fear that no one will understand them, which further reduces their willingness 

to consider homeownership. 

However, it is important to note that because service providers interviewed in these communities 

offer a similar range of services, they are likely to attract similar types of clients. Their counseling 

services are aimed at helping those with limited understanding of the home purchase process, many of 

which are in need of assistance to overcome limited English proficiency. Furthermore, most agencies 

Chapter 5. Conclusion 

92 
serve as a conduit for downpayment assistance and special lending programs aimed at those earning 

between 50 and 80 percent of AMI. In short, while these markets may differ in the extent to which 

other groups of Hispanics need homeownership assistance (such as those with somewhat higher 

incomes, greater English-language proficiency, and some familiarity with the homebuying process), 

none of the agencies interviewed targeted their efforts at these groups. 

The most commonly identified barriers to homeownership among Hispanics are lack of 

information about the homebuying and mortgage qualification process, lack of affordable housing, 

and lack of credit or poor credit histories. All service providers agree that many of their Hispanic 

clients, particularly immigrants, are uninformed about the homebuying process and are unfamiliar 

with the roles played by different industry stakeholders throughout the process. These clients may 

not know where to begin the homebuying process; what documentation is required; why credit 

histories and bank accounts are important; or how to search for an appropriate home. This lack of 

knowledge is attributed to their disconnect from mainstream financial institutions, bad experiences 

with these institutions in their country of origin, and poor English-speaking skills. However, service 

providers said that this attitude may be changing among younger Hispanics who are more assimilated 

into the American culture. In addition, Hispanics harbor misconceptions about the mortgage 

qualification process and typically overestimate the requirements to qualify for a mortgage (e.g., they 

assume that large downpayments and perfect credit are required to buy a home). The lack of 

knowledge and misconceptions about the homebuying and mortgage qualification process discourage 

many Hispanics from pursuing homeownership opportunities, undermine their confidence in 

completing the process, and leave them vulnerable to predatory lending practices. On the other hand, 

other Hispanics underestimate the mortgage qualification requirements by assuming that anyone with 

a history of bankruptcies, poor credit, and insufficient savings can qualify for a loan. This 

underestimation leads some Hispanics to believe that credit and savings are not important factors to 

becoming a homeowner. According to some service providers, these misconceptions are fostered and 

reinforced by advertisements from questionable lenders. These Hispanics are susceptible to predatory 

lending practices. 

Service providers in Orlando and Washington consistently cite the lack of affordable housing as a 

primary barrier to Hispanic homeownership, but less so in San Antonio. The lack of affordable 

housing is associated with three factors. First, housing prices in these areas are rising at a much 

higher rate than Hispanic incomes, which are already low relative to median housing values. Thus, 

homeownership is increasingly out of financial reach for many low-income households. Second, the 

escalating costs of land, infrastructure, and construction materials limit opportunities to develop new 

affordable homes for low-income populations. According to several housing developers, the costs of 

acquiring and renovating homes often surpasses planned budgets, and as a result, home prices 

increase. These developments also tend to be small and only produce a few homeownership units 

over several years. Lastly, the affordable housing stock is largely concentrated in distressed 

neighborhoods or in neighborhoods that are predominantly African-American, yet, some Hispanics 

prefer to live in neighborhoods that are predominantly Hispanic. A few providers indicate that some 

Hispanics would rather rent in a predominantly Hispanic neighborhood than become a homeowner in 

a predominantly African American or white neighborhood or a neighborhood that is populated by a 

different Hispanic nationality. This factor limits the availability of affordable housing to the extent 

that Hispanics limit their housing search to a small number of communities with a fraction of the 

metropolitan area’s affordable housing stock. 

Chapter 5. Conclusion 

93 
In all three markets, those interviewed consistently report that alack of credit or poor credit severely 

limits the ability of many Hispanic clients to qualify for mortgage products. Several providers 

indicate that it is not uncommon for Hispanics to not believe in using credit to make purchases and 

may not have a savings or checking account. Similar to the factors undergriding the lack of 

information, poor credit histories are attributed to poor financial literacy skills, general mistrust of the 

U.S. banking system, and poor English-speaking skills. Respondents note that Hispanics’ financial 

status may differ between first- and second-generation Hispanic households. First generation 

households may distrust and avoid financial systems in the United States even after being in the 

country for several years, while second generation households are more likely to become overly 

indebted, resulting in poor credit histories. 

The housing financing process is made easier by the growing use of flexible mortgage products 

and downpayment assistance programs, but the efficacy of these financing packages is limited by a 

community’s housing market characteristics and by the targeting of certain Hispanic households 

for services. The case studies suggest that there are an increasing number of flexible mortgage 

products capable of addressing credit and other financial barriers to mortgage financing. For 

example, the NAHREP real estate agent in Orlando has witnessed an increase in the use of “no doc” 

products that rely for eligibility mostly on an applicant’s credit score, cash reserves, and demonstrated 

ability to pay bills on time. These products de-emphasize underwriting guidelines that have 

traditionally served as barriers to qualifying for a loan—documenting income and employment for 

Hispanics who change jobs frequently. In San Antonio, NHSSA offers two mortgage products that 

require very low downpayments, feature low, fixed interest rates, and offer second mortgages that can 

be forgiven over time. Similarly, in Washington DC, HCV clients are referred to the VHDA, which 

offers several first-time homebuyer products that have made significant inroads into the Hispanic 

market. Moreover, a pilot program started recently by Citibank and supported by ACORN Housing 

allows applicants to use an ITIN in lieu of a Social Security Number. Thus, although some Hispanics 

continue to face credit barriers to homeownership, flexible mortgage underwriting guidelines are 

improving access to mortgage financing. Access to these products is further facilitated by the work of 

housing counselors who are helping client become mortgage ready (e.g., opening up bank accounts, 

developing budgets, and teaching clients to save). 

In addition, providers in each community are relying on a variety of downpayment assistance 

programs to help Hispanics overcome the initial costs of becoming a homeowner. For example, 

HANDS uses an array of downpayment assistance programs offered by the City of Orlando, Osceola 

County, Orange County, Volusia County, and the Florida Housing Finance Corporation. Similarly, in 

San Antonio, a service provider is using an American Dream Downpayment Initiative grant through 

the City to provide downpayment assistance to its clients. In Washington DC, a large counseling 

provider is using a city program that offers low- or no-interest loans to assist with downpayment and 

closing costs, and payments on the loans are deferred for five years. Overall, these downpayment 

assistance programs are effective at helping Hispanic clients with insufficient savings or wealth to 

afford the initial costs associated with homebuying. 

However, the overall impact of these financing packages on Hispanic homeownership rates is 

questionable. Service providers reported that some mortgage underwriting guidelines continue to be 

a major barrier to improving access to mortgage financing, especially the requirement to provide 

Social Security Numbers. A few pilot programs use an ITIN in lieu of SSN, but the need for these 

types of products far outstrips the availability. This was especially a problem in San Antonio, where 

providers cannot serve undocumented Hispanics. In addition, several providers indicated that the 

Chapter 5. Conclusion 

94 
amount of downpayment assistance is small relative to the rising costs of housing. That is, the 

effectiveness of these programs to assuage the high initial costs of homeownership is limited by 

housing values that have increased by at least 50 percent between 2003 and 2005 in both Washington 

and Orlando. Lastly, because service providers and downpayment assistance programs target 

households earning 50 to 80 percent of area median income (AMI), moderate-income households 

earning 80 to 120 percent of AMI are ineligible for services or financial support. These households 

are nearly ready for homeownership, and, although some may need services similar to their lowincome counterparts, they are largely overlooked. 

The majority of Hispanic clients need most, if not all, of the available services, but clients are 

typically required to cobble these services together from multiple providers in order to overcome the 

barriers to homeownership. Service providers offer a wide-range of services to help Hispanics 

overcome barriers to homeownership, including: homebuyer education counseling, financial literacy 

classes, housing search assistance, development of affordable housing, assistance with the mortgage 

qualification process, access to mortgage products, wealth building opportunities, immigration 

services, downpayment assistance, guidance through the closing process, post-purchase counseling, 

and referrals to other service providers. Although a few providers have the capacity to function as a 

“one-stop-shop” for services by providing many of these services in-house, service providers 

typically offer only some of these services as part of their formal service package and routinely make 

referrals to other service providers to supplement their services. Housing counselors often limit their 

involvement after the referral by answering client questions as needed via telephone rather than by 

directly participating, for example, in the housing search or in the selection of mortgage financing. 

These breaks in the chain of service provision may result in incomplete homebuying processes if 

some Hispanic households fail to follow through with the referrals. 

Housing counseling agencies offer the most comprehensive package of services and they use three 

service delivery models: group seminars, one-one-one sessions, and informal counseling. Most 

clients receive services through all three service models as they progress through the agency’s 

program. Clients start by attending a group seminar, which is typically designed to provide a broad, 

introductory overview of the homebuying and mortgage qualification process in a relatively short 

amount of time—about six hours. These seminars often involve multiple industry stakeholders, such 

as representatives from housing counseling agencies, mortgage companies, real estate agencies, and 

title companies, who discuss their role in the homebuying and mortgage qualification process. The 

seminars are increasingly being offered in English and in Spanish, using standard curriculums, such 

as the curricula developed by Fannie Mae. 

Following the group seminar, clients typically schedule one-on-one counseling sessions. The one-onone counseling focuses on the financial barriers to homeownership and includes a thorough review of 

each client’s credit report, the development of a budget and financial action plan, and an assessment 

of the client’s ability to qualify for a mortgage. Clients are usually asked to compile and bring 

documentation regarding their financial status to their one-on-one counseling sessions (e.g., a budget 

sheet, picture ID and Social Security Card, employment pay stubs, proof of any other income sources, 

tax returns, recent bank statements, and proof of rent payments). Staff agree that one-on-one 

counseling is particularly effective at addressing sensitive issues that clients do not feel comfortable 

discussing in the group seminars. The individualized counseling is also critical to resolving the 

unique credit issues that confront clients. The frequency of one-on-one counseling varies 

considerably depending on the needs of clients and the resources available. 

Chapter 5. Conclusion 

95 
Informal counseling includes the ad hoc guidance that is provided throughout the formal provision of 

services. For example, real estate agents may help clients understand what documents will be 

required at closing (i.e., informal closing assistance) at the same time they are helping the client 

search for appropriate housing (i.e., formal housing search assistance). Similarly, a lender may 

educate clients about the mortgage qualification process while helping clients qualify for a mortgage. 

Housing counselors are typically “on-call” to answer clients’ questions as needed in-between one-onone counseling sessions. 

Service providers operate within their own preferred network of providers, with the result that 

service coordination is fragmented across metropolitan areas. Despite a few efforts to better 

coordinate services metropolitan-area-wide, homeownership agencies in the study rely almost 

exclusively on their trusted network of referral organizations to supplement their services. That is, 

the network of organizations used by one agency is likely to be different from the network of 

organizations used by another agency within the same metropolitan area. These networks are 

developed and maintained based on trust and past experience. Agencies in the housing and mortgage 

markets are keenly aware of the questionable practices within their industry and, as a result, providers 

are careful to partner with other providers who have reputations for being professional, for following 

through with clients, and for treating clients with patience and respect. Service networks tend to be 

small (three to six partners) and are used to supplement services that are not provided by the agency. 

The provider-specific networks tend to be highly coordinated, comprehensive, and based on longstanding relationships. 

The network of trusted partners has expanded to include other types of organizations that are not part 

of the housing and mortgage market industry, e.g., churches and neighborhood organizations. Service 

providers in all three communities in which we conducted interviews have fostered relationships with 

neighborhood churches or neighborhood groups to market their services, engage potential 

homebuyers, and conduct homebuying and financial education classes in their facilities. Churches are 

viewed as particularly important, because they are viewed as reputable and because service providers 

can reach a large number of potential clients at limited costs to the organization. 

This collection of agency-specific networks suggests that service coordination is fragmented across 

metropolitan areas. Agencies will only use referral organizations that are part of their network— 

mostly because they do not trust other organizations with their clients—and only a few large 

organizations are found on multiple agency-specific networks. In addition, some agencies in the 

study indicate that the Hispanic community lacks a centralized leadership that can serve as a fulcrum 

for better service coordination metropolitan-wide. 

Interviewed organizations report that there is strong demand for homeownership services among 

Hispanics, but also that their capacity to serve these clients is increasingly strained. Demand for 

homeownership services is large and expected to grow as the Hispanic population increases in each of 

these communities. In all three communities, the potential pool of Hispanic renters that could benefit 

from these services is large. Most service providers in the case studies serve Hispanics earning 

between 50 to 80 percent of AMI, which typically represents about 25 percent of all Hispanic renters 

in these communities and thus constitutes a fairly large pool of prospective homebuyers. In addition, 

a similar proportion of Hispanic renters in these communities earn 80 to 120 percent of AMI. These 

renters often do not qualify for many downpayment assistance programs, and they may not qualify for 

services from some of the service providers interviewed. Thus, there is a large group of Hispanic 

Chapter 5. Conclusion 

96 
renters that are in a good position to purchase a home but are not receiving services or financial 

support. 

Service providers were unable to quantify the precise demand for services, but they offered examples 

of how their marketing activities resulted in an overwhelming request for their services. For example, 

in Orlando, NAHREP partnered with Univision to produce a television call-in program called “Linea 

Ayunda” or “Help Line,” which allowed people to call a 1-800 number and ask questions about the 

homebuying process. Telephone operators received over 1,000 phone calls during the one-hour 

program. In Washington DC, Manna conducted a lottery for 13 units of affordable housing in 

Northwest DC, and 250 households applied for the lottery. In San Antonio, service providers believe 

that the active demand for service is currently being met, but acknowledge that a large proportion of 

additional Hispanic renters could benefit from their services. 

The demand for services is closely linked to the ability of providers to market their services, and 

nearly all providers in the study have limited marketing capacity. Few providers engage in systematic 

marketing, although most conduct some form of marketing through grassroots community 

engagements or housing fairs. According to some housing counseling agencies, their agency 

confronts a “marketing gap” because, unlike realtors and lenders, housing counseling agencies are not 

well branded in the industry. As a result, housing counseling agencies have difficulty reaching 

Hispanics who could benefit from their services. 

On the other hand, nearly all service providers interviewed in these communities are currently 

operating at full capacity, and most do not have additional resources to add staff or serve new clients. 

The strain on service capacity is exacerbated by demographic trends in each of these communities. 

Recent analyses of Census population estimates demonstrate that all three communities are 

experiencing tremendous growth of Hispanic populations, accounting for a large share of the 

metropolitan areas’ overall growth since 2000. Accordingly, staff suspect that as the Hispanic 

population continues to grow dramatically in the U.S., the demand for homeownership services will 

swell. 

Overall, these case studies highlight the prevalence of several common barriers to Hispanic 

homeownership, and describe similar types of services and service delivery models that are used to 

overcome these barriers. These case studies also identified significant differences across each 

market—the demographic and socioeconomic characteristics of Hispanics, the scale of the Hispanic 

population, and affordability conditions—that influence Hispanic homeownership rates and gaps. 

Service providers in each of these communities clearly are working very hard to open homeownership 

opportunities to Hispanics, and overall, homeownership assistance is available to address most 

barriers. However, a few key issues remain. The distinct impacts associated with particular 

demographic and socioeconomic characteristics on Hispanics homeownership rates suggest that 

public and private sector interventions should be tailored to account for the metropolitan-level 

variations. Furthermore, it is unclear whether the scale of these efforts will continue to meet the 

demand for these services. Service effectiveness may also be undermined by the lack of coordination 

across service providers and across stages of the homebuying process. Finally, the lack of any real 

attention to households in the 80 to 120 percent of AMI group overlooks a large segment of Hispanics 

that might benefit from assistance to become homeowners. These concerns may suggest that 

government’s efforts to promote homeownership among Hispanics (and other low-income 

households) should be mindful of each community’s service capacity and degree of service 

Chapter 5. Conclusion 

97 
coordination, and also account for service gaps in either the stages of the homebuying process or in 

the types of income groups served. 

Chapter 5. Conclusion 

98 
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