Black residents in majority-Black areas are both the least likely to apply for a home purchase loan and the most likely to be denied when they do apply.
INDIANAPOLIS — Black people living in Indianapolis are facing inequities when trying to get home loans according to an IU study released Tuesday.
It found that in Marion County, 1 in 5 people live in a majority-Black neighborhood. However, homeownership rates in those areas are about 42 percent — lower than the county rate of 54 percent. The IU study points out that homes in those areas typically cost less than the average Marion County home.
“Owning a home is one of the most important ways families can build wealth and increase their financial security,” says Joti Martin, a policy analyst at the IU Public Policy Institute. “Yet for far too many families of color, the dream of homeownership may still be out of reach because of inequities in home lending practices.”
The IU study analyzed home loan applications and denials in Marion County’s majority-Black neighborhoods and found the following:
The study recommends lending companies connect residents to loan programs that offer features like down payment assistance or have relaxed mortgage requirements. Other recommendations include offering budgeting classes, credit counseling, or pre-purchase homeownership counseling to help residents increase financial literacy and money management skills.
A more in-depth breakdown on percentages by race/ethnicity is available in the full policy brief on loan disparities in Marion County at this link.