c. 2003 Religion News Service

(UNDATED) Last November the Korean Churches for Community Development held its first home ownership fair in Los Angeles.

Normal turnout for fairs is 200 people, according to KCCD spokeswoman Charlotte Roh. Four times that many showed up for the fair in the city, which, outside Korea, has the largest concentration of Koreans in the world, Roh said.

“Everybody was blown away. It was amazing,” she said. “(Banks) were walking away with handfuls of money, because people were opening bank accounts.”

There have been two more fairs in Los Angeles since, and because they’ve been so successful, Roh said, banks are starting to recognize a potential market they can’t afford to overlook.

Home financiers have begun using faith-based initiatives to enter many untapped markets, like Koreans in the Los Angeles area. Their efforts are part of a merger of sorts between business and faith that has spread throughout the nation.

“A powerful way to reach out for community development is through the church,” Roh said.

Through the KCCD, for instance, hundreds of Korean churches in Los Angeles and Orange County will team up with two of the nation’s largest home mortgage gurus _ Wells Fargo Home Mortgage and Freddie Mac _ to spread the good word about home ownership to members of their community.

It’s the latest in a series of faith-based initiatives launched by Freddie Mac in response to President Bush’s State of the Union address last January in which the president highlighted the need for more minorities to own homes.

Craig Nickerson, vice president for community development lending at Freddie Mac, said the company’s initiative is “very consistent with that call to action,” but there’s more to it. He said Freddie Mac started the program not only because “it’s the right thing to do,” but also because “it’s good business.”

Freddie Mac’s financial relative, Fannie Mae, is another institution that’s started using churches and local religious organizations to reach out to communities to promote home ownership.

Last month, Fannie Mae _ another huge home mortgage financier _ expanded one of its faith-based initiatives with the Christian Methodist Episcopal Church.

It’s part of a $2 trillion Fannie Mae initiative to narrow gaps between minority homeowners and other homeowners, part of an effort to make inroads into low-income, minority and immigrant groups that traditionally have been less likely to own homes.

Barriers have built up among such groups, making them reluctant to venture into such uncharted waters as home financing, including not having enough cash for a down payment or a bad credit history.

Nickerson said, however, that “intangible barriers” are the hardest to overcome for these groups, including “misconceptions and misunderstanding and mistrust in the marketplace.”

Minorities have a home-ownership rate that’s about 20 percentage points lower than that of non-minorities. It has often been more difficult for minorities to receive conventional loans and qualify for a mortgage. They’ve also often been the target of predatory lending schemes, in which money is loaned at very high interest rates that often cannot be repaid on schedule.

Many immigrants are hesitant about traditional banking because they come from countries that don’t have stable banking systems, prompting many to keep their money in cash.

The key to the faith-based programs is to use “trusted messengers” such as churches, mosques and temples to get the message out to communities to alleviate some of their mistrust of financial institutions.

“Probably the strongest constituency that can speak to these disenfranchised households is the faith community,” Nickerson said.

Faith-based organizations don’t have to step outside the roles they’re most familiar with to take on these new projects, Nickerson said. Most already see their mission as a broader social commitment to their congregants.

Earlier this month, Freddie Mac launched a similar initiative in San Antonio. The Macedonia Community Development Corp., a faith-based organization, enlisted the help of more than 50 faith-based groups, including churches of the San Antonio Baptist Association, to recruit potential homeowners.

“This faith-based initiative can serve as a national model for reaching the new home buyer of the 21st century,” said Tonya Jackson, vice president for the Single Family Lending Division at Freddie Mac.

In the California initiative, Freddie Mac said it would purchase about $20 million in mortgages from Wells Fargo Home Mortgage. Freddie Mac said it would buy about $25 million in loans from South Trust Mortgage for the San Antonio initiative. The loan money is supposed to guarantee that money will be available for everyone who wants to purchase a home.

Freddie Mac has also set up programs designed specifically for Muslim families. The housing contracts comply with Islamic law, which prohibits the payment of interest on mortgages.

KRE END DAGOSTINO