Untapped Home Loan Market: Immigrants

DENVER (By Macario Juarez Jr., Denver Post) October 04, 2004 - Billions of dollars in new home mortgages could have been generated nationally in 2000 if lenders would have taken a chance on thousands of undocumented Hispanic immigrants.

That's according to a new report to be released today by the National Association of Hispanic Real Estate Professionals, an industry group that commissioned the study.

"Until now, no one has attempted to quantify the positive impact these consumers can have on our nation's marketplace," said Gary Acosta, the group's chairman and co-founder.

Today's report - derived from 2000 census and U.S. Immigration and Naturalization Services data - estimates that some 216,000 undocumented Hispanic immigrants could have qualified for some type of home mortgage, based on their household income.

No law prohibits undocumented immigrants from owning real estate - if they have cash or private financing.

But they can find themselves ineligible for most favorable types of financing like an FHA or conventional loan because of their immigration status and lack of adequate identification and credit history.

"As homeowners, these people would make enormous contributions to local communities all across America," Acosta said.

New census data released last week show that Hispanics now make up more than a third of Denver's population.

Among all counties statewide, the Hispanic population of Douglas County grew the most from 2000 to 2004, followed by Garfield and Summit counties.

"It's definitely growing and will only continue to grow," said Eugene Lucero, chairman of the Colorado affiliate of the Hispanic real estate group.

Lucero and Acosta were to present the new study this morning at the organization's fourth annual Hispanic Marketing Convention and Expo, which wraps up Tuesday at the Adam's Mark Hotel in downtown Denver.

More than 1,500 real estate professionals were expected to attend the event, which started Saturday, to learn how to better tap into the Hispanic homeownership market.

Rob Paral, a research fellow with the American Immigration Law Foundation in Washington, D.C., prepared the study as an independent consultant.

He described his results as conservative and most likely lower than the number of undocumented Hispanic immigrants today who could afford a home.

"If you take the population that I looked at, they are now a little older, probably have a higher income and are more likely to want to be a homeowner," Paral said.

Paral estimated that $44 billion in new mortgages could have been generated in 2000 by undocumented Hispanic immigrants.

He arrived at the estimate by multiplying the maximum loan amounts available, by income levels, by the number of Hispanic immigrant householders - about 216,000 - who could afford that amount.

He used a 6 percent mortgage rate for a 30-year mortgage to estimate the maximum loan amount.

The amount grows even more if you take into account the number of undocumented Hispanics who have migrated to the United States since the 2000 census figures were taken, he said.

Not everyone is sold on the numbers.

Zhu Xiao Di, a research analyst for Harvard University's Joint Center for Housing Studies, said the $44 billion in new mortgages may be a little inflated.

Nevertheless, Xiao Di is happy to see someone taking on the issue.

"Hispanics are a very important driving force."