GreenState pledges $1 billion in home loans to people of color

Program designed with guidance from the National Association of Minority Mortgage Bankers designed to close the homeownership gap

GreenState pledges $1 billion in home loans to people of color

GreenState Credit Union logo.

According to the 2020 US Census, more than 70% of white American adults own their homes, compared to 46% of black American adults.

Iowa’s largest credit union, GreenState Credit Union, announced this week that it is doubling down on efforts to help close the gap with people of color and black borrowers over the next 10 years. The credit union has committed $500 million in loans to people of color, in addition to the $500 million announced in May for home loans to black borrowers.

Since then, “we’ve extended $76 million in home loans to black people, or about 523 families we serve,” GreenState President and CEO Jeff Disterhoft told The Gazette on Tuesday.

Jeff Disterhoft, President and CEO of GreenState (photo provided)

“Since we exceeded our target and have since expanded our operations – we acquired a bank in the Chicagoland area – I felt it was time for us to revisit our target and perhaps set a more ambitious goal.

The reasons for the property gap between black and white Americans are complex, but researchers believe it could be caused by differences in family wealth and information networks as well as outdated policies unfavorable to people of color, reported the Urban Institute.

The Washington, DC-based think tank recommended these changes:

  • Include rent payments in credit score calculations
  • Eliminate price differences based on credit score and down payment
  • Adopt protections for homeowners facing income shocks, such as unemployment or illness
  • Provide targeted down payment assistance
  • Create community land trusts where people buy the house, but not the land, and agree to sell at a restricted price in the future
  • Rationalization of refinancing
  • Initiate special purpose credit programs for people historically deprived of the opportunity to own property

As part of its billion dollar commitment, GreenState has a new loan program for people of color that has flexible credit score requirements and down payment assistance for those in need.

The credit union developed the affordable housing program — which is expected to be available in April — with guidance from the National Association of Minority Mortgage Bankers of America. The program is available to people of color who live in low-to-moderate income census tracts, but their home purchases can be in any neighborhood, said Ryan Doehrmann, GreenState’s director of mortgages.

The credit union announced last year that it would donate $26 million to help low-to-middle income people, minority populations or climate change programs. The institution will use some of that money for down payment assistance, Disterhoft said Tuesday.

“If someone still can’t qualify through the low-to-moderate income product, we’ll find ways to improve their financial literacy, so if they don’t qualify today, we can see what we need to do. do to help him qualify,” he said.

Financial education will be offered to all program participants.

Disterhoft and Doehrmann said they are not aware of any other Iowa banks or credit unions pledging funds to support loan programs for people of color, but they hope to encourage others to follow suit. not.

The seed for the billion-dollar investment was planted in 2020, when GreenState’s board of directors began talking about how the credit union could help black communities after the killing of George Floyd by a Minneapolis police officer, Disterhoft said.

“Our goal is to be a catalyst for change if we can,” added Fred Mims, a retired University of Iowa Athletics administrator and GreenState board member.

Mims, who is black, said he had no difficulty buying a house, but he knows he is an exception due to his prominent role in athletics. His brother recently purchased a house with funding from GreenState.

“I was very pleased with the effort Ryan and his team made to work with him,” he said. “They set standards and he was able to get to a level where they could help. Education was very important.

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