African American Strategy Equitable Access to Homeownership - PowerPoint PPT Presentation

CON FI DEN T I AL African American Strategy Equitable Access to Homeownership Presentation April 16, 2018

Individual Demographics Age Income (1000s) FICO Total DTI All Debt Student Debt ($) Median Median Median Median Median Median Mean Overall 48 64 719 9 4,818 0 2,987 African-American 45 45 624 10 669 0 3,757 Hispanic 43 49 678 10 1,113 0 1,800 23 34 670 6 1,752 0 3,372 New Millennial (19-25) Old Millennial (26-35) 30 49 674 11 8,882 0 6,899 Gen X (36-54) 45 66 697 14 18,489 0 3,768 Senior (55+) 66 82 779 6 6,300 0 1,196 Note: Credit Bureau data for Sep 2016 to investigate consumers’ credit. Median average values are used. Data combines anonymized individual credit bureau data with marketing data. » African-Americans and Hispanics tend to be younger than overall population. » African-Americans, Millennials, and Hispanics tend to have lower income and lower credit scores compared to overall population. » The median student loan debt for overall population is zero since majority do not have student debt. 2

Demographics of Minnesota Student Loans Income FICO Total Age (in thousands $) Score DTI Median Mean United States 48 64 719 9 0 2987 Minnesota 49 75 758 10 0 3924 Hispanic 40 49 696 10 0 2524 African American 42 47 666 9 0 4566 Younger Millennials 23 37 700 6 0 5520 (19-25) Older Millennials 31 57 715 13 0 9662 (26-35) Generation X 45 82 741 15 0 4666 (36-54) Senior 66 92 807 5 0 1279 (55+) Note: Credit bureau data for Sep 2016 to investigate consumers’ credit. Median average values are used. Data combines anonymized individual credit bureau data with marketing data and is weighted appropriately. » African-Americans and almost all segments tend to have higher FICO scores in MN. 3

What Is Our Definition of “Mortgage Ready”? Mortgage readiness – Based on research criteria not actual underwriting. Mortgage Ready Mortgage Weak  FICO score greater  FICO score less than than 620 and… 620 and/or …  Total DTI ≤ 45%  Total DTI > 45%  No foreclosures in the  Foreclosure in the past 84 months past 84 months  No bankruptcies in  Bankruptcy in the past the past 84 months 84 months  No severe  Severe delinquency delinquencies (120- (120-180 DPD) in the 180 DPD) in the past past 12 months 12 months 4

How Many Are “Mortgage Ready”? Total African » Of African Population American Americans, 63% are % % mortgage weak. A Mortgage Weak 39 63 24 percentage gap Mortgage Ready 35 22 from total Mortgage Owner 26 15 population. 2,737,920 36,972,960 » About a third of the Mortgage Ready African American Mortgage Ready Total Population mortgage ready group are likely to be 7,860,180 41,915,260 Mortgage Weak African American Mortgage Weak Total Population homeowners. Note: Credit bureau data 5

Where Do African Americans Live? Note: Credit bureau data 6

Where Are African American “Mortgage Ready” Individuals Located and Can They Afford It? 7 Note: Credit bureau data

Where Are African “Mortgage Ready” Individuals Located and Can They Afford It? (Close-up) Note: Credit bureau data 8

Where Are African American “Mortgage Ready” Individuals Located and Can They Afford It? (Counts) 9 CONFIDENTIAL Note: Credit bureau data

Where Is Adequate Housing Stock? » Looking at the March 2018 time period, there is an overall shortage of housing.  Decrease in housing supply will increase home prices, reducing affordability. 10 Note: Based on data from Redfin.com for March 2018 to investigate housing stock.

Where Is Adequate Housing Stock – Minneapolis/St. Paul Area? » Only Sibley and Le Sureur Sherburne Mille Lacs have adequate housing stock. Benton Isanti  Ramsey has the tightest supply of housing along with the Chisago Stearns Dakota, Washington, Anoka, Anoka Wright Sherburne, Wright and Ramsey Carver Washington Hennepin Counties.  Housing supplies starts opening Dakota up in the northern counties like Hennepin Scott Sibley Stearns, Benton Mille Lacs, Le Sueur Isanti and Chisago. 11 Note: Based on data from Redfin.com for March 2018 to investigate housing stock.

How Can Down Payment Assistance Help the “Mortgage Ready”? 12 Note: Credit bureau data

What Are the Short Term Opportunities? Short Term Mortgage Ready Population 2,737,920 Target cities based on African American populations, mortgage ready, and adequate housing stock