From 1980 to 2000, white homeownership rates rose from 70.5 to 73.3 percent, while Hispanic homeownership rates fell from 59.4 to 52.7 percent and black homeownership rates declined from 56.6 to 50.9 percent. However, homeownership rates in Jacksonville among all racial and ethnic groups are higher than in the United States as a whole. Nationally in 2000, 72.4 percent of white households, 46.3 percent of black households, and 45.7 percent of Hispanic households were homeowners.
One option for those unable to obtain conventional mortgage financing is to turn to a subprime loan. According to Consumer Action, a subprime loan is the extension of credit to a person with a damaged credit history who is considered to be a high-risk borrower. Subprime loans have higher—sometimes much higher— than average interest rates. Subprime lenders reduce their risk in making loans by charging borrowers a higher interest rate and sometimes additional fees. While not all subprime loans represent predatory lending, nearly all predatory lending involves subprime loans.
jacksonville homeownership rates 1980-2000
A primary factor in homeownership is obtaining financing to purchase the home. In 2003, black applicants for conventional mortgages were nearly three times as likely to be denied financing as white applicants. Hispanic applicants were denied financing at nearly double the rate of white applicants.
In the Jacksonville Metropolitan Statistical Area (MSA), black families were four times as likely to refinance a home using subprime loans and five times as likely to purchase a home using subprime loans as white families. Across the country in 2002, Jacksonville had the highest concentration of subprime purchase loans in minority neighborhoods (defined as those Census Tracts in which 80 to 100 percent of the population is minority), with 59.5 percent of loans in these neighborhoods being subprime loans. In other words, in Jacksonville’s minority neighborhoods, six out of ten homes are purchased through subprime loans, the highest rate in the country.
subprime loan rates Jacksonville MSA, 2002
When broken down by applicant income levels, the disparities continue within similar income brackets. Upperincome black applicants (making over $66,000 per year) were more than three times as likely to be denied a conventional mortgage as their white peers. These disparities worsened from 2002 to 2003.
conventional mortgage denial rates Jacksonville MSA, 2003
The disparity between minority and non-minority neighborhoods in using subprime loans for refinancing is also high. Of all home refinancing in minority neighborhoods, 59.5 percent is done through subprime lending, compared to 5.8 percent in white neighborhoods. The disparity between these two rates ranks as the thirdhighest in the country, behind Fresno and Indianapolis. Among housing-related occupations, real estate brokers and agents were predominantly white, while the demographics of loan counselors and officers reflected the population diversity of the community.
note Analysis performed by ACORN (the Association of Community Organizations for Reform Now). Income categories are as follows: Low-income (below 50% Median, less than $27,450); Moderate-income (50-79% Median, $27,450 - $43,920); Middle-income (80-119% Median, $43,920-$65,880); and Upper-income (Above 120% Median, more than $65,880).
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