In Mainstreet’s most recent News & Brews, Commemorating Black History Month in Real Estate, past members of the Mainstreet Board of Directors Carrie Little and Terri Jeffries moderated a panel of Black REALTORS®️ in a conversation about diversity and inclusion in real estate.
One of the central issues of discussion was the problem of home listings that state they are open only to buyers with a conventional mortgage.
“We see conventional only, and for us that feels discriminatory,” panelist Sheena Baker. Real Estate Broker at CarMarc Realty Group, said. “There is no reason why that should be on the MLS, ‘conventional only’.... You have not received our offer yet, you don’t know how qualified our buyer is, so we submit it and you automatically deny us. So I think that that’s something that has to be talked about.”
Many white REALTORS®️ remain unaware of the impact of requesting conventional mortgages only, having only considered the additional requirements of an FHA loan. But this practice has real repercussions on housing equity. Black and Hispanic buyers are much more likely to use FHA loans than non-Hispanic whites.
“[FHA] is not a substandard loan, it’s a loan that’s afforded to people who need a helping boost,” panelist Jermaine Coney, Managing Broker of Premier Midwest Realty, added. He went on to discuss the history of how Black Americans were restricted from using FHA and VA loans for decades, and that these loans contributed to white Americans’ ability to build generational wealth.
The panel also discussed the problem of selling agents questioning the terms of FHA buyers’ loans, sources of income and whether they could actually pay. Not only are these questions offensive, but they are potentially Fair Housing violations. If a potential buyer is approved or underwritten for a loan, that should be the end of the discussion.
There are occasional exceptions in the case of attached homes where the homeowners association has not applied for FHA approval. Additionally, some homes in need of significant renovations may not pass FHA inspections, but in this case the selling agent should communicate those issues to the buying agent rather than simply posting “conventional only” on a listing.
Mainstreet REALTORS®️ have the power to make changes and make homebuying in Northern Illinois a more equitable experience. If you missed the virtual event, take the time to watch the full panel on Vimeo and consider ways in which you or your brokerage can improve your own practices or educate your fellow agents.
Many thanks to all the panel participants and sponsors.