SOUTH FLORIDA (By Sandra Hernandez, Sun Sentinel)
March 27, 2005 - In 1997, Alvaro Hernandez left
Colombia for Pembroke Pines and put his dream of home ownership on hold,
fearing he lacked the money and credit to secure a mortgage.
Three years later, the 51-year-old record label owner put $4,000 down and
moved into his first home in Weston.
"I feel like I won the lottery," said Hernandez, who paid $180,000 for his
two-bedroom home that has nearly doubled in value. "I never thought I could
qualify for a loan. And I thought you had to have a lot more money for a down
payment, but this is a great deal."
Hernandez's story is increasingly common in South Florida and across the
nation, where banks and other lenders are quietly crafting special programs
and messages to help Hispanics get a piece of the American dream. Hispanics
will account for one-third of future growth in the number of homeowners,
according to the Joint Center for Housing Studies at Harvard University, a
research group that focuses on national housing trends.
While Latinos are the fastest-growing demographic, they own fewer homes than
whites, blacks or Asians. Only 48 percent of Hispanics own a home compared
with more than 70 percent for whites, who have the highest rate of
homeownership, according to the center.
Experts say the gap is largely because of lower income levels among Latinos
and disparate treatment by lenders who historically "turned Hispanics down for
loans," said William Apgar, a senior scholar at the center.
But lenders have begun to change their view of Hispanics, especially recent
immigrants. The number of mortgages approved for Hispanic homebuyers has more
than tripled over the past decade.
"Immigrants have been driving the growth of the Latino community, and many
have been here for a number of years and are setting down roots," said Apgar.
South Florida, where the number of Latinos is steadily climbing, is at the
epicenter of the trend.
"The industry views South Florida as one of the big opportunities because
while states such as California and New York have big communities, they are
too expensive for many Hispanics," said Gary Acosta, chairman of the National
Association of Hispanic Real Estate Professionals, or NAHREP. "Florida has a
big concentration of Hispanics and is still relatively affordable."
`A real opportunity'
That combination is driving lenders and others in the industry such
as Genworth Financial, a Richmond, Va.-based company that offers mortgage
insurance, to develop new programs in South Florida. A homebuyer who purchases
such insurance pays a smaller down payment, because mortgage insurance
companies assume part of the risk of the loan.
Last month, the company's mortgage insurance division launched a
Spanish-language ad on a local South Florida television station that offers a
nostalgic view of a young girl playing with a dollhouse followed by images of
a young couple in front of their first home. The Spanish-language television
spots are the first such ads in the nation for Genworth. The company also
hopes to attract would-be buyers to TuCasaAhora.com, its Web site that walks
prospective homeowners through the process in Spanish.
"There is a real opportunity here and we are interested," said Jorge Caceres,
an emerging markets leader for Genworth, the financial company's parent
operation. "Over the last few years banks could get as much work as they
wanted from people who were interested in refinancing because of the low
interest rates. But rates are creeping up and everyone who was interested
already refinanced, so now the shift is toward purchase of homes by first-time
buyers. These first-time buyers are minorities, especially Hispanics."
Outreach in Spanish
The ads are a savvy marketing tool, according to experts.
A 2004 study on Latino housing by the Tomas Rivera Policy Institute, a Los
Angeles-based Hispanic think tank, recommended more bilingual outreach for
prospective Latino buyers, according to Jongho Lee, co-author of the report.
"The more banks and other financial institutions make an effort to get
information out in Spanish the more likely it will attract new buyers and
increase homeownership," said Lee.
While Hispanics are still approved for a fraction of the loans compared with
whites, banks are paying more attention to their rising income levels and
their strong desire for home ownership.
The result is a dramatic increase in Latinos qualifying for loans. Between
1993 and 2003, the number of conventional loans among Latinos grew 357
percent, from 91,345 to 417,667, compared with 64 percent for whites, from 1.9
million to 3.2 million, according to the Federal Financial Institution
Examination Council and the Federal Reserve in Washington, D.C.
"Over the last few years this market has become more competitive," said Eric
Darmanin, senior vice president for mortgage services at Coral Gables-based
BankUnited, which has 53 branches across the state. Five years ago, BankUnited
was one of three lenders that worked with foreign nationals from Latin
America; now it competes with 10 other lenders for the same market, said
Darmanin. The company provided more than 12,000 loans nationwide last year.
From rent to own
One reason for the competition is Florida's appeal to working-class
and wealthy immigrants alike. Cities such as Weston, Doral and Miami are
increasingly being defined by new arrivals from Andean countries.
"Most of my clients are Venezuelans and Colombians who moved here and were
renting because they didn't realize they could buy and now are living in their
first homes," said Belkys Jatare, a Weston-based realty agent who is among
those for whom business is booming. His clients include Alvaro Hernandez.
"This is big business and it's only going to get bigger," said Apgar. "A lot
of people don't understand how significant this growth rate is and how
Hispanics are really impacting the market."
Eduardo Leon is a good example. In 2002, he moved from Havana to Lantana with
little money in his pocket and few hopes of ever owning his own home.
But three years later, the 48-year-old construction worker is buying a
$110,000 Lake Worth condo with just 4 percent down. The government will
provide a $25,000 second mortgage that Leon won't have to repay as long as he
keeps the house for a decade.
"I've never owned anything in my life and so the idea of owning a home is more
than I could dream I would have in this life," said Leon. "I thought I had to
have the money in the bank."
Sandra Hernandez can be reached at shernandez@sun-sentinel.com or
954-356-4514.
