GreenState pledges $1 billion in home loans to people of color

More than 70 percent of white Americans adults own their homes, compared with 46 percent of Black American adults, according to the 2020 U.S. Census.

Iowa’s largest credit union, GreenState Credit Union, announced this week it’s doubling its efforts to help shrink the gap with people of color and Black borrowers over the next 10 years. The credit union committed $500 million to loans to people of color, on top of $500 million announced in May for home loans to Black borrowers.

Since that time, “we’ve done $76 million in home loans to Black populations, roughly 523 families we serve,” GreenState President and Chief Executive Officer Jeff Disterhoft told The Gazette on Tuesday.

“Since we exceeded our goal and we have since expanded our operations — we acquired a bank in the Chicagoland area — I felt like it was time for us to revisit our goal and maybe set more of a stretch goal.”

The reasons behind the homeownership gap between Black and white Americans are complex, but researchers believe it could be caused by differences in family wealth and information networks as well as outdated policies biased against people of color, the Urban Institute reported.

The Washington, D.C.-based think tank recommended these changes:

As part of its $1 billion commitment, GreenState has a new loan program for people of color that has flexible credit score requirements and down payment assistance for those in need.

The credit union developed the Affordable Housing Program — expected to be available in April — with guidance from the National Association of Minority Mortgage Bankers of America. The program is available to people of color who live in low- to moderate-income census tracts, but their home purchases can be in any neighborhood, said Ryan Doehrmann, GreenState’s chief mortgage officer.

The credit union announced last year it would donate $26 million to help low- to moderate-income people, minority populations or climate change programs. The institution will use part of that money for down payment assistance, Disterhoft said Tuesday.

“If someone still can’t qualify through the low- to moderate-income product, we will find ways to help their financial literacy so if they don’t quality today, we can see what we need to do to help them qualify,” he said.

Financial education will be provided to all program participants.

Disterhoft and Doehrmann said they are not aware of any other Iowa banks or credit unions pledging funds to support loan programs for people of color, but they hope to encourage others to follow suit.

The seed for the $1 billion investment was planted in 2020, when the GreenState board of directors started talking about how the credit union could help Black communities following the murder of George Floyd by a Minneapolis police officer, Disterhoft said.

“Our goal is to be a catalyst for change if we can,” added Fred Mims, a retired University of Iowa Athletics administrator and GreenState board member.

Mims, who is Black, said he did not face challenges buying a home but he knows he is an exception because of his prominent role in athletics. His brother recently bought a home with financing from GreenState.

“I was very pleased with the effort Ryan and his staff did to work with him,” he said. “They set some standards and he was able to get himself to a level where they could help. The education was very important.”

Comments: (319) 339-3157; erin.jordan@thegazette.com