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Closing the Gap in Homeownership Rates: How Fannie Mae
and Lender-Partners Can Close the Gap

Sullivan University

MGT 510

Executive Summary

This proposal addresses the gap in homeownership rates between whites and minorities. According to the United States Census Bureau, 67.9 percent of the population in the United States are homeowners. However, while 71.8% of Whites are homeowners, only 47.3% of African Americans and 48.2% of Hispanics are homeowners. This large gap in homeownership rates can be contributed to discrimination by lenders and minorities’ misconceptions about the lending process. To overcome these issues, lenders need to eliminate discrimination and reach out to minorities. Ultimately, lenders who discriminate are going to hurt their own bottom lines since minorities represent a large market that has the high potential for growth.

Introduction: Homeownership is the “American

Housing has often been referred to as the #1 creator of wealth in the United States. It has been called, (1) the leading consumer product, (2) the leading consumer investment, and (3) a leading economic driver. Homeownership, in short, is the “American Dream.” It creates wealth. If you purchase a home today, with appreciation and through upkeep, it will be more valuable in the future. That appreciation provides homeowners with opportunities to create wealth. According to the Perlo (2003), in the latest Survey of Consumer Finances, published by the Federal Reserve Board, the median family that owned their home had a net worth of $171,700 in 2001 as compared to those without a home, whose net worth was only $4,800 in 2001.

Homeownership also provides economic security and creates opportunities. You can pass your wealth on to the next generation. You can withdraw the equity to fund your children’s education, make...
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