Property is Power! The Quiet Return of Credit Barriers

Property is Power!

The Quiet Return of Credit Barriers

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How Modern Lending Standards Are Recreating Old Inequities and What Black Homebuyers Must Do About It.

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There is no headline announcing it. No legislation was formally passed. No explicit policy declaring exclusion. And yet, for many Black homebuyers today the door to homeownership is quietly narrowing again. The return of credit barriers is subtle, technical, and often hidden behind the language of “risk management,” “market uncertainty,” and “investor caution.” But make no mistake the impact is real, measurable, and disproportionately carried by Black Americans.

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This is not Jim Crow lending. This is something more sophisticated and arguably more dangerous. Historically, Black Americans were denied access to mortgage credit through explicit mechanisms redlining maps, racially restrictive covenants, and federal underwriting guidelines that openly excluded Black neighborhoods. Today, exclusion no longer needs race to function. It operates through higher minimum credit score overlays than agency guidelines require, stricter debt-to-income caps imposed by lenders rather than the GSEs, reduced tolerance for non-traditional income such as bonuses, commissions, or self-employment, heightened scrutiny of reserves and liquidity, and automated underwriting systems trained on historically biased data.

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These standards are presented as neutral. But neutrality does not equal fairness when starting positions are unequal. Black borrowers, even those with advanced degrees and strong incomes, are more likely to carry higher student loan debt, have thinner credit files despite responsible payment histories, be self-employed or earn variable income, and support extended family financially through informal obligations that underwriting models do not recognize. In short, the modern credit box penalizes realities common in Black economic life without acknowledging the historical and structural context that produced them.

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There is a dangerous myth that education alone insulates Black Americans from systemic barriers. It does not. A Black attorney carrying student loan debt with a 690 FICO can be denied a mortgage, while a borrower with inherited wealth and a 720 score is approved without question revealing how the system favors privilege over potential. A Black entrepreneur with strong cash flow but irregular income may be deemed risky, while salaried W-2 income is rewarded regardless of long-term wealth trajectory. The system favors predictability, not potential. And predictability often correlates with generational advantage.

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Credit is not just a financial tool. It is a gatekeeper to wealth creation. When credit tightens, fewer Black households enter homeownership, entry happens later in life reducing equity growth, appreciation. Families and communities lose owner stability and political leverage. This is how inequality compounds quietly, mathematically, and over time.

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We are at a dangerous inflection point. Rising interest rates, market volatility, and regulatory pressure have made lenders more conservative. History shows us that when caution replaces inclusion, those who need access the most are always the first to be excluded. When Black homeownership declines, the consequences ripple across generations lower net worth, reduced educational mobility, weaker community institutions, and diminished political influence. This is not accidental. It is structural.

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We must expand credit evaluation beyond the “score” by valuing rental payments, utilities and cell phone payments. Creditworthiness is behavior, notjust a number. We must support community-based and mission-driven lenders. CDFI's, Black-owned banks, and mission-aligned mortgage professionals often understand nuance better than large institutions. Black borrowers must be stratgegic about where they apply, not just whether they qualify.

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We must demand transparency in algorithmic lending. AI and automated underwriting systems must be audited for disparate impact. If the data reflects historical bias, the decision will too. Technology without accountability becomes discrimination by proxy. We must educate early and aggressively. Financial literacy cannot begin at the loan application. Credit strategy education, mortgage readiness planning, and a focus on wealth rather than income must be normalized long before adulthood. And we must reframe homeownership as a collective strategy, not an individual achievement. Buying in our communities, advocating for fair appraisal practices, supporting policies that expand access, and teaching ownership to the next generation are acts of community defense.

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The return of credit barriers is quiet, but its consequences will be loud. If we fail to confront this moment, we risk losing decades of hard-won progress. But if we recognize the system for what it is, adapt intelligently, and organize collectively, we can still bend the arc toward ownership, equity, and legacy.

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Property is Power! Because Ownership multiplies opportunities. Restricted access multiplies disadvantages.

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Dr. Anthony O. Kellum – CEO of Kellum Mortgage, LLC  Homeownership Advocate, Speaker, Author                                                     NMLS # 1267030 NMLS #1567030  O: 313-263-6388 W: www.KelluMortgage.com.

Property is Power! is a movement to promote home and community ownership. Studies indicate that homeownership leads to higher graduation rates, family wealth, and community involvement.

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