DOJ drops charges against five visiting researchers from China
HUD secretary links student loan debt to decline in Black homeownership
Housing and Urban Development (HUD) Secretary Marcia Fudge said student debt is playing a role in limiting homeownership for Black people.
"Who has student debt? Poor people, Black people, brown people. We're the people who carry most debt. And so the system's already skewed toward us not being creditworthy," Fudge told Axios's Mike Allen during an interview with "Axios on HBO" that aired on Sunday.
Homeownership rates among that group have seen dramatic decline in the past 15 years. The Biden administration plans to tackle the issue by relaxing student loan debt calculation policies when assessing homebuying assistance, The Wall Street Journal reported last week.
Fudge gave Axios the example of a person making $50,000 a year who wants to purchase a home priced at $200,000, but faces difficulties, including $75,000 in student debts. She said that after adjustments are made, "we're going to make that same person qualify."
"The person, let's say that makes about $50,000 a year. If they want to purchase a home, maybe $200,000 or in that ballpark, they have $75,000 worth of student debt, they don't qualify," Fudge said.
"Once we make the adjustments we're going to make, that same person will qualify, and will qualify at a rate that gives them an opportunity to go into a home with some equity, but also be so vested in that home that they can afford to stay in that home," she added.
Fudge's comments come after HUD announced last week that the Federal Housing Administration (FHA) is making efforts to remove obstacles to homeownership that make matters difficult for individuals with student loan debt.
The department said the FHA is making updates to its student loan monthly payment calculations in an effort to "remove barriers and provide more access to affordable single family FHA-insured mortgage financing for creditworthy individuals with student loan debt, which has a disproportionate impact on people of color."
The changes were outlined in a letter to lenders on Thursday.
Fudge, during the interview with Axios, addressed the decline in Black homeownership rates, pinning the blame on poor enforcement of the Fair Housing Act.
"Madam Secretary, over the past 15 years Black homeownership rates have gone dramatically down. Homeownership rates for Asians, Hispanics have gone up. What's happening?" Allen asked Fudge.
"Part of our problem is that we have never totally enforced the Fair Housing Act," Fudge responded.
The Fair Housing Act, which was passed in 1968, says discriminating against individuals for their race, color, national origin, religion, sex, familial status or disabilities when dealing with housing-related activities, including sales, rentals and mortgages, is illegal.
Fudge said the disproportionate rate of Black homeownership and the failure to fully implement the Fair Housing Act is why HUD has spearheaded efforts like homeownership assistance and addressing student loans.
"That is why we are doing things like homeownership assistance, why we're addressing the student loan issue, why we're looking at how credit is distributed," Fudge said.
She said for people of color, especially Black individuals, "homeownership is wealth."
"It is not only wealth to us but it is generational wealth," she added.
President Biden earlier this month announced his administration's plans to close the racial wealth gap, which he unveiled during a trip to Tulsa, Okla., on the 100th anniversary of the Black Wall Street massacre, when white mobs killed hundreds of Black people in the city's Greenwood neighborhood.
Biden announced a number of housing-focused rules to strengthen anti-discrimination measures that were rolled back under the Trump administration.
Additionally, HUD announced an interagency task force to address housing discrimination.