Newly-enacted down payment aid for Inland Empire homebuyers

Owning a home has long been a symbol of the American Dream, but for many Latino families in California’s Inland Empire, that dream is slipping further away. As housing prices rise steeply and wages fail to keep up, the path to homeownership has become more challenging than ever, turning a once-attainable goal into an uphill battle.

The Inland Empire Community Foundation (IECF), in collaboration with Neighborhood Partnership Housing Services (NPHS), has launched the Inland Empire Down Payment Assistance Program. 

Funded by a $1 million contribution from U.S. Bank, the program aims to support homebuyers in the region and “close the wealth gap in Riverside and San Bernardino counties by making homeownership more accessible to low and moderate-income families,” as stated in the program's press release.

 According to a 2023 analysis by the nonprofitUnidos US, “Incomes are not growing at the same rate as home price appreciation, which is a major obstacle for Latino homeownership. From 2016 to 2021, home prices appreciated by 49%, while median household incomes for Latinos only rose by 37% during that same period.”

Building equitable pathways

The program provides qualifying first-time homebuyers in Riverside and San Bernardino County with up to $40,000 in down payment or closing cost assistance. It is designed as a 30-year deferred loan, allowing for no monthly payments, 0% interest rate, and “there's no equity share component,” said Jesse Ibarra, NPHS Chief Business Officer in a conversation with CALO News.

 Ibarra also explained that the loan is “due in one lump sum at the end of the term. It also is due if the client were to sell the property, and it would typically pay through escrow from their proceeds. [It is also due] if they transfer title, meaning they transfer interest into the property outside their own […] if they move out of the property […]  or no longer occupy [the house as a] primary residence.”

 Participants can make payments over the 30-year period if they wish to pay off the debt sooner. Once the loan is repaid, the funds return to NPHS to be re-lent to other clients. In addition to financial assistance, the program provides essential pre-purchase counseling, community outreach initiatives and partnerships with local stakeholders.

“We know that owning a home is a primary way for individuals and families to build wealth over time. This is especially relevant for middle and lower-income households where home ownership can significantly contribute to the overall net worth. We also know that stable housing is foundational to children’s growth, well-being and their ability to thrive,” said Rossina Gallegos, Community Affairs Manager at U.S. Bank, during avirtual workshop organized by NPHS to offer the community more details about the program and address questions from potential participants.

Challenges in Latino homeownership

The housing disparity between Latino and White households in the Inland Empire highlights a significant challenge in homeownership access. According toa study by the UCR Center for Social Innovation in partnership with the Inland Empire Community Foundation (IECF), “In 2020, Latino households were much more likely to rent (40%) than white households in the region (28%).” This gap underscores the systemic barriers many Latino families face in achieving homeownership.

“It is our hope that with this program, more people will have more options for finding a safe and stable place to call home,” expressed Gallegos during the event.

The study also points out that despite a significant increase of nearly $10,000 in Latino household incomes between 2010 and 2020, a substantial income gap remains, compared to non-Hispanic white households. As of 2020, Latino households still earned nearly $14,000 less per year than their white counterparts in the region.

This disparity becomes even more evident when adjusting for household size—Latino residents have a per capita income of just $22,700, which is about half of the $44,250 per capita income of white residents. These numbers emphasize the enduring economic inequalities that affect the financial stability within Latino communities in the Inland Empire.

“The partnership with NPHS and US Bank is all about providing housing, humane housing […] We know that housing is the biggest expense in most family budgets, and we are in this partnership […] making housing affordability a significant factor in financial well-being, offering ways to build family wealth and providing diverse communities,” said Celia Cudiamat IECF Chief Impact Officer during the virtual workshop.

An analysis by theUrban Institute indicated that in California, Latino homebuyers face significantly higher mortgage denial rates than their white counterparts, underscoring persistent discrepancies in access to homeownership. In 2022, 14.2% of Latino applicants for owner-occupied first-lien purchase mortgages were denied, compared to 8.6% of white applicants. The gap is even more pronounced for conventional loans, where 15.6% of Latino applicants were denied, in contrast to lower denial rates for Federal Housing Administration (FHA) (11.9%) and Veterans Affairs (VA) (9.5%) loans.

The economic impact on the Latino community

Latinos represent40% of the California population and play an essential role in the State’s economic growth, contributing with more than $83 billion in taxes, “have a $92 billion spending power, and Latino owned businesses contributed 650,000 jobs to the California economy,” according toa report by the Latino Leadership Ad Hoc Group.  Despite this significant impact, they continue to face considerable obstacles when purchasing homes. Factors such as limited access to affordable financing and systemic inequalities disproportionately affect Latino families. These challenges make it difficult for many to achieve homeownership and build long-term wealth.

The barriers to homeownership faced by Latinos reflect broader issues within the housing market, where affordability and accessibility remain key concerns. While Latinos contribute heavily to the economy, they are often excluded from the benefits of wealth-building opportunities like owning a home. Without increased access to resources, many Latino families are unable to establish financial stability and generational wealth.

The Inland Empire Down Payment Assistance Program is now accepting applications to help address these issues and support homebuyers. The initiative aims to make homeownership more accessible and attainable for eligible individuals. Those interested can visit theNeighborhood Partnership Housing Services (NPHS) website to learn more about the eligibility requirements and application process and submit a contact form.