Yahoo Finance Hispanic and Latino veterans are bridging the gap in homeownership
According to a new report by Veterans United Home Loans, the homeownership gap is shrinking among Hispanics and Latinos — and military service is a big reason why.
Census data show that Hispanics and Latinos accounted for 35.9% of household growth between 2010 and 2020. Homeownership rates amongst the group have also increased every year from 2015 to 2020.
"There's an element of being set up for success and then also the benefits of the VA loan program itself," Fair Lending Officer at Veterans United Home Loans Tracy Pevehouse-Pfeiffer tells Yahoo Finance. "But once we actually get to the VA loan program, there's some big benefits that are going to be helpful to first time home buyers."
A VA loan is available to veterans, service members, and their surviving spouses through the Department of Veterans affairs. It allows qualified borrowers to purchase a home with little to no down payment, prepayment penalties, or private mortgage insurance (PMI). The credit requirements on VA loans are also flexible, so applicants don't have to have stellar credit scores.
Pevehouse-Pfeiffer says that being eligible for VA loans is not the sole reason why Latino and Hispanic veterans are becoming homeowners. Having military experience brings many skills that go hand in hand with affording and maintain a house.
"Military service is going to offer training of personal skills, life skills, even some financial education that people are able to carry into the civilian sector. When they look at buying home loans they're entering with a bit of knowledge that maybe some other folks don't have, but also those skill sets that allow them to be gainfully employed, and that's always great for home ownership." said Pevehouse-Pfeiffer.
The Veterans United Home Loan report also shows that the homeownership rate stood at 65.3% for Hispanic and Latino Veteran households. There is a 20 percentage point disparity between military and civilian Hispanic buyers dating back to 2015.
According to MBA's Quarterly National Delinquency Survey in Q2 2021, the foreclosure rate among veteran Latino and Hispanic homebuyers was 0.43% vs. 0.51 for their non-veteran counterparts.
Pevehouse-Pfeiffer notes that buying a home is also a way to build generational wealth. "As first-time home buyers who, you know, don't have another home to sell, or haven't had the time to build $5,000, $10,000 to purchase the home," Pevehouse-Pfeiffer said. This is an opportunity to get into homeownership that's available as a benefit to those who've earned it to overcome those barriers and get into a situation where you're starting to build generational wealth and paying equity instead of just throwing money at rent every month."
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
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