Counseling, new rules could widen home ownership among Long Island's poorest residents, study says
First-time home buyer Michelle Bueno, 42, of Hempstead, left, meets with JoAnn Massaro, a housing counselor for the Long Island Housing Partnership Inc. in Hauppauge, on Wednesday, Sept. 16, 2015. Bueno is on track to buy a three-bedroom town house to be built in North Hempstead. Credit: Heather Walsh
Long Island's poorest residents are missing out on the American dream of home ownership due to difficulties getting mortgages, according to a new analysis of federal home loan data.
New York should provide more housing counselors and revamp lending rules to help people who are struggling to buy a home, according to the report released Friday by the Empire Justice Center, an Albany-based nonprofit legal advocacy group.
The group recommends creating a new state fund to buy, repair and sell abandoned homes.
In Long Island's lowest-income communities, such as Hempstead, Roosevelt, Brentwood and Wyandanch, residents are "missing out on a key part of the American dream" because they have little access to mortgage loans, the report's primary author, Barbara Van Kerkhove, said in a statement.
In Nassau County, mortgage applicants with low incomes were denied 40 percent of the time in 2013 -- 2.7 times more frequently than the county's overall average, the analysis found. Black applicants were almost twice as likely to be denied as white applicants, with 22 percent of black applicants turned down in Nassau County and 26 percent in Suffolk County, according to the report, which was released at a forum at Touro Law Center in Central Islip.
The federal statistics used in the report do not reflect applicants' credit scores, finances or the condition of the homes they seek to buy, said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage information website.
Without that information, he said, "It's really hard to make any firm judgments."
Housing counseling "has been shown to work pretty effectively to help people understand the rigors of home ownership and prepare them for it," Gumbinger said. "The question is, where does the money come from?"
One aspiring homeowner, Michelle Bueno, said housing counseling made the key difference in her ability to buy a home.
The Hempstead resident first sought help in 2010 at the Long Island Housing Partnership in Hauppauge. The group receives grants for housing counseling through the state attorney general's office, using funds from multibillion-dollar settlements with lenders over foreclosure abuses.
Bueno, 42, said her housing counselor, JoAnn Massaro, advised her to clear up credit problems and build up her savings.
Five years later, after paying down old debts, Bueno is on track to buy a three-bedroom town house to be built in North Hempstead. The home's sale price is nearly $315,000, but Massaro helped her get $118,000 in local, county and state grants, in addition to approval for a low-interest mortgage through a state program for first-time home buyers.
The counselor urged her to "not give up, go forward and do everything I needed to do," recalled Bueno, who works as a surgical technologist and has two sons, ages 6 and 11. "I was determined to do the right thing for myself and my children."
In addition to recommending more funds for housing counseling, the Empire Justice Center advocates more rigorous requirements that banks lend to minorities; different credit scoring methods that are more favorable to applicants with scant credit histories; and the creation of a fund to buy abandoned homes and make them available for sale.
Maura McDermott covers health care and other business news on Long Island.