July 25, 2008
Washington, DC On behalf of the Labor Council for Latin American Advancement (LCLAA) and the 1.7 million Latino workers that make up our constituency, we want to express our deep concerns over the possible elimination of down payment assistance programs in the housing bill, H.R. 3221, and how it could disproportionally impact Latino working families.
As a national organization committed to supporting policies that will promote the social, political and economic empowerment of Latino working families in the workplace and their communities, we understand how important it is for any group of people to be able to own a home and the vital role it plays in the possibility of accumulation of wealth.
DPAs provide a good source of assistance to creditworthy borrowers that have enough credit to qualify for government backed loans, but who lack cash to be able to pay the required three percent down payment. For low income families, one of the greatest challenges to homeownership is the down payment. Eliminating DPAs - funded in part by sellers - would have a devastating impact in homeownership opportunities for our Latino community, most of whom do not have a wealthy family member to help them with a down payment, a practice that will continue to be allowed under FHA guidelines.
The housing package proposal that is been discussed in Congress, while well intended, includes this extremely troublesome provision that would have a negative impact in our community. The elimination of down payment assistance from certain non-profit organizations in a housing bill that is intended to help correct the housing crisis runs counter to the purpose of a housing rescue bill. The Senate voted to ban this program and the House of Representatives passed a plan to preserve it.
The House and the Senate are meeting to compromise on legislation.
Should Congress eliminate DPAs, thousands of Latino working families may never be able to become homeowners. This forces a good number of Latino families to either rent or resort to predatory sub-prime financing that has proven to be devastating for minority borrowers.
Homeownership for Latinos is close to 30 percentage points below that of Whites. If DPAs are eliminated that alone would exacerbate economic disparities in our nation.
We know that DPAs promote the economic advancement of working families in the United States; this is why LCLAA urges our leaders to protect down payment assistance. If DPAs are not preserved, fewer Latino working families will have access to the basic American dream of owning a home.
The Labor Council for Latin American Advancement, LCLAA, is the home of the Latino Labor Movement. LCLAA is a national Latino organization representing the interests of over 1.7 million Latino trade unionists throughout the country and the Common Wealth of Puerto Rico.