Homeownership is elusive for Black Americans, but tech entrepreneurs are working to change that

Racism in the housing market is not new, but the ways entrepreneurs are using technology to overcome it are groundbreaking. 

Blockchain technology offers a digital ledger system that can streamline the home lending process. Bryan Young, CEO and co-founder of Home Lending Pal, developed a website to offer users indiscriminate lending offers. 

“The lender is now able to see verified financial and credit information without necessarily needing to disclose age, sex and race up front, which should make it more fair for a borrower,” Young told theGrio. 

To address this challenge, users submit their financial documents, credit information and banking history to Home Lending Pal, which then hides their demographic data from lenders. Prospective borrowers are then given an array of rates from lenders who only had access to the information needed to create an offer. 

Young’s overall goal for his technology is to increase Black and Brown homeownership beyond the rates of the record early 2000s when the rate was 46.4%. Presently, in comparison to the overall national homeownership rate of 65.5%, Black ownership has drifted around 43%. 

“When it comes to homeownership, you know, we found that while lenders won’t say is the case, you know, African Americans are pretty much 84% more likely to get declined for a home loan compared to any other race,” Young highlighted.

Young hopes to bring more transparency to the home financing, and highlights that his technology has helped people who have struggled with lower credit scores secure reasonable interest rates. His platform also educates users on how to improve their pre-approval prospects. 

“We kept building [the technology] based on what your needs are,” Young explained. “The lenders pay us for access to your information. But you know, this is really a platform that is geared towards helping you.” 

Home Lending Pal is supported by a number of lending and credit institutions that review the blockchain protected data of the site’s users. Often people think there is one way to get a mortgage — go to nationally recognized banks. But Home Lending Pal is showing that there is a wider market for solid mortgage deals to be struck. 

Tyler Williams, a real estate investor in Ohio, told theGrio that he had challenges getting larger national banks to provide him capital for his investment properties. He pinpoints the difficulty to the size of the bank. 

“Their scope is so large, that they may not have the resources that can be allocated to your particular project, at the timeframe that you may be able to get smaller, more local banks to possibly do for you,” Williams explained. 

Home Lending Pal’s Young hopes to see Black homeownership become more accessible to all regardless of credit history or downpayment through the use of Home Lending Pal and its array of lending partners. Young admitted to theGrio that recent Black homeownership trends have concerned him. 

Ogechi Igbokwe, founder of OneSavvyDollar, is also “worried about the lack of ownership rate” in the Black community. However, she thinks an additional contributing factor to homeownership reluctance is a digital movement that devalues investment in owning property by prioritizing buying stocks. 

Igbokwe cautions that if people continue to compare real estate investments to stock holdings, that they will miss opportunities to access the wealth of housing equity. 

“You can’t even put them in the same category,” Igbokwe affirmed. “Homeownership is a need.”

“Homeownership will always be a cornerstone to wealth building,” Igbokwe added.

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