FRESNO, Calif. (KFSN) -- In the aftermath of the Great Depression, the federal agency Home Owners' Loan Corporation was formed to evaluate the riskiness of mortgages.
The agency drew color-coded "residential security" maps of major American cities -- trying to make sure people would not default on their loans.
White neighborhoods were green, and homebuyers in these areas were generally approved for mortgages.
Neighborhoods, where many Black and Hispanic families lived, were shaded red, labeled undesirable and were often denied loans.
That's where the term "redlining" comes from.
"What we're seeing now might be a little bit of a hangover effect from what's happened," says Fresno Association of Realtors President-Elect Steve Flach.
The ABC30 Data Team looked at the homeownership rate in the Fresno Metro area and found overall, 67 percent of white families own their homes, compared to 44 percent of Latino families and just 27 percent of Black families.
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That homeownership rate among Black families is the 8th lowest in the country and the lowest in California.
"Affordability is a big issue," Flach said.
Research by the National Association of Realtors says African American homebuyers have a lower median income than White buyers and are more likely to have student loan debt.
It's that debt to income ratio that's leading to mortgages being denied. The down payments can also be prohibitive.
"There are federal programs out there," Flach said. "FHA financing has down payment with as little as 3.5% down, but there's typically closing costs and other fees that a buyer incurs, so they can be anywhere from six to 7% down."
Driving through town, you may have noticed new construction homes popping up in Fresno County.
They're selling fast and prices continue to climb.
Homeownership is a major way Americans create wealth but one of the biggest obstacles is education on the process.
"African American communities don't have any experience because number one, maybe their parents, like myself, they didn't own," says real estate agent Gary Carter.
The City of Fresno has partnered with local organizations to offer homebuyer education and up to $22,000 in down payment and closing cost assistance for qualified applicants.
"There's a definite issue, so what can we do to change that," says real estate agent Lionel Akpovi. "Provide programs, provide assistance to those in need, and to teach them that hey, you can become a homeowner."
Housing Watch: Looking at the homeownership gap in Fresno County
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