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Overcoming Homeownership Barriers for Asian Americans

The recent State of Asia Report outlines some of the barriers to Asian homeownership. Use the data to improve your outreach.

If America is considered a melting pot, so too is the demographic subset of Asian American and Pacific Islander Americans, known as the AAPI community. We come from many different countries, some easily recognizable like China, Japan and India, others not as familiar, including Laos, Burma and Bangladesh. More than 50 countries are represented in this group, spanning East Asia, South Asia, Southeast Asia and the Pacific Islands.

The grouping derives from arbitrary government classifications that grew out of the U.S. Census. Today, the Asian American Real Estate Association (AAREA) embraces this disparate grouping of countries in an effort to advocate for our collective benefit as it pertains to homeownership.

Ours is mostly an immigration story punctuated by the residual impact of the many barriers to Asian homeownership that we faced integrating into America. We chronicled our immigration and housing history in our recent publication of the State of Asia America Report, in partnership with RE/MAX and Freddie Mac. We also outlined the overall homeownership rates of major AAPI ethnicities/races as compared to White homeownership rates.

At the highest level, Whites enjoy a homeownership rate of nearly 70%, while the aggregate rate for Asians is just under 60%. Rates for most of the country-specific groups range from 55% to 30%. Clearly, a gap exists for many members of the AAPI community.

It’s critical to understand the factors responsible for these gaps and identify solutions that can bridge the barriers to Asian homeownership. Key findings from our report point to three factors: incomplete credit applications, language access and down payments.

Thin, Clean Credit Files Lead to Incomplete Credit Applications

When they do have credit scores, Asian borrowers have the highest median credit scores overall and across most enhanced loan types. However, AAPI families often prefer to make their purchases in cash to avoid debt, only making large purchases when cash is available; therefore AAPIs have historically struggled with credit qualification as a result of their limited credit history. In addition, antiquated underwriting standards do not favor the self-employed entrepreneurial AAPI buyer.

Limited credit history is one of the top reasons for AAPI application denial, despite having the lowest delinquency rate of any group.

A potential solution is the introduction of Alternative Credit Scoring Models. Requiring lending institutions to consider other forms of credit in their credit scoring models would open up greater access to housing finance for well-qualified but credit-thin AAPI homebuyers.

In-Language Access Proves a Barrier

A survey found Limited English Proficient (LEP) speakers favor in-language documents, with Chinese, Korean and Vietnamese speakers more likely to want both in-language and English resources. A major challenge is the translation of certain terms, especially financial terms, that do not directly translate. Another is that many LEPs do not trust the quality of the translation of the documents unless they are done by a government agency, a large bank with name recognition, or a smaller bank with someone who speaks the same language.

Adding the Preferred Language Question back to the Universal Residential Loan Application (URLA) is one way to limit this barrier. This would allow the Federal Housing Finance Agency (FHFA) the ability to properly assess the language needs of AAPI borrowers. AREAA has successfully collaborated with the GSEs to create translated resources in Chinese for LEP borrowers. Korean, Vietnamese and Tagalog are set to launch this year, but further expanding the FHFA’s clearinghouse to serve more AAPI LEP languages is needed. Other solutions include implementing a language access line that enables borrowers to obtain assistance in their preferred language.

Members of the AAPI community need more time to save for a traditional 20% down payment, mainly because they live in high-cost areas such as San Francisco, Los Angeles, New York City, Chicago and Boston.

For Mortgage Ready AAPIs:

Race/Ethnicity Monthly Income Median House Price (SFH)

  • Non-Hispanic Whites $4,326 $243,076
  • African Americans $3,679 $215,774
  • Hispanic $3,588 $349,351
  • AAPI $4,306 $444,307

Down payment assistance programs could make AAPI homeownership more feasible in the high-cost areas they choose to live in. 

Change is on the Horizon

The barriers to AAPI homeownership may be high, but the solutions are apparent. Concerted effort and advocacy is needed to ensure solutions are put into place to afford greater access to the American Dream for the more than 18 million members of the AAPI community.

AREAA recently successfully persuading the U.S. Census Bureau to track and include Asian housing data as a standalone category in its quarterly reports on homeownership by race and ethnicity.


Amy Kong, is president of the Asian American Real Estate Association of America. Founded in 2003, the Asian American Real Estate Association of America (AREAA) is a national nonprofit trade organization dedicated to improving the lives of the Asian American and Pacific Islander (AAPI) community through homeownership. 

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