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SAN FRANCSISCO, August 7, 2023 – Speaking at the 75TH annual convention of the National Association of Real Estate Brokers (NAREB) in Houston last week, Teresa Bryce Bazemore, president and chief executive officer of the Federal Home Loan Bank of San Francisco (FHLBank San Francisco), credited the organization with playing a critical role in advancing homeownership for African Americans, and other families in marginalized communities across the country.        

“With various roles in implementing equal rights, fair housing, equal opportunity, and community development, NAREB has championed legislative action at the local, state, and federal levels,” Bazemore said,  adding, “NAREB has stood with Black homebuyers striving to overcome substantial obstacles and barriers to achieving the American Dream.” 

The Federal Home Loan Bank of San Francisco, she said, “stands with NAREB on this critical issue.”    

A week ago, the Bank’s board approved an additional $2 million for a matching grant program called Empowering Black Homeownership that supports U.S. Department of Housing and Urban Development-approved housing counseling agencies that directly serve populations that have historically been disadvantaged when it comes to building wealth through homeownership. Last year, after the program was started, the Bank contributed $1 million to the agencies, and its member institutions exceeded expectations by donating $1.2 million. The new funding, which will also be matched with member contributions, will continue support of the agencies that provide both pre- and post-homeownership counseling.

Bazemore noted that before the passage of the Fair Housing Act in 1968, which addressed redlining and other discriminatory practices, the gap between Black and White homeownership rates was 27 percentage points. By 1970, the gap had narrowed to 23.8%.  But today, it has climbed to 30%, even higher than in 1968.

"We applaud NAREB for strongly advocating for legislative and regulatory measures to help Black families become homeowners, with initiatives aimed at ending appraisal bias, eliminating Loan Level Price Adjustments, creating new downpayment assistance programs, using special purpose credit programs, and many more,” Bazemore said.

FHLBanks are cooperative wholesale banks. Their member shareholders are banks, credit unions, savings institutions, Community Development Financial Institutions, and insurance companies. The primary role of FHLBanks is to provide reliable liquidity to over 6,600 members throughout the country, and in partnership with its members, meet the evolving housing finance and economic development credit needs of their customers and communities.

Many FHLBank members originate loans and hold them in their portfolios, in addition to investing in mortgage-backed securities. As a result, the Bank’s liquidity mission is critical in sustaining the housing market by ensuring the continued availability of the 30-year fixed-rate mortgage and making mortgages more accessible and affordable.

Bazemore maintained that their work to increase homeownership can have an immense impact. “Homeownership is a powerful wealth-building tool for Black families, and the decline in Black homeownership has increased the wealth gap and moved the U.S. further away from equity in our communities.” 

Further, Bazemore asserted that “the Federal Home Loan Bank of San Francisco has been in the trenches, too, working with NAREB and many others to increase homeownership for Black families and those in other under-resourced communities."

She said the Bank’s “mission and commitment” is to expand access to affordable housing and homeownership, supporting community economic development, and narrowing the homeownership gap.

“Under my leadership at FHLBank San Francisco, we are passionately committed to delivering a significant social impact by intentionally directing financial and other resources toward increasing homeownership for people of color,” she said. 

For instance, in 2022, the Bank invested $1.5 million in a collaboration with the Urban Institute to conduct extensive research on the racial gap in homeownership. Bazemore said evidenced-based research is helping redress the systemic barriers that continue to limit homeownership opportunities for people of color. 

The initiative’s Racial Equity Accelerator for Homeownership, she said, focuses on areas ripe for innovations that should help advance equity. The Accelerator has also researched initiatives that could help preserve homeownership for homeowners with short-term financial challenges. Mortgage reserve accounts, for example, a savings account tied to an individual mortgage and funded by reducing the downpayment, “are promising solutions,” she said, noting that borrowers experiencing an income or expense shock could use these savings to make their mortgage payments during a temporary financial hardship.

This would benefit many Black families, who are more than twice as likely as White families to lose their homes to foreclosure.

Bazemore also discussed a measure that can help families who responsibly manage their bills but often can’t qualify for a traditional mortgage because they don’t have an extensive credit history. Others have credit accounts but don’t meet the underwriting criteria. About 45 million Americans are “credit invisible” because they have insufficient credit history or no credit score. Forty-five percent of Black consumers fit that description compared to 18% of White consumers. 

“Our Racial Equity Accelerator proposes tangible solutions that use other data, including consistent, timely rent payments, to determine creditworthiness.,” she said. “This would make many more families eligible for mortgages.” 

About the Federal Home Loan Bank of San Francisco

The Federal Home Loan Bank of San Francisco is a member-driven cooperative helping local lenders in Arizona, California, and Nevada build strong communities, create opportunity, and change lives for the better. The tools and resources we provide to our member financial institutions — commercial banks, credit unions, industrial loan companies, savings institutions, insurance companies, and community development financial institutions — propel homeownership, finance quality affordable housing, drive economic vitality, and revitalize whole neighborhoods. Together with our members and other partners, we are making the communities we serve more vibrant, equitable, and resilient.

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