Research Report Language Proficiency and Homeownership Access
Jung Hyun Choi, Amalie Zinn, Laurie Goodman, Noerena Limón
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During the past four decades, the number of people and households that are limited English proficient (LEP) has increased significantly. Previous research suggests that limited English proficiency is a barrier to homeownership at the zip code level, even when controlling for other neighborhood-level factors. In this report, we first offer background on LEP people and households in the US, focusing on which languages they speak and differences in citizenship status, years in the US, age, educational attainment, household income, and location. We then expand upon previous research to estimate how big of a role language proficiency plays in the homeownership rate gap between LEP and English proficient households, holding other household and neighborhood factors constant, across language groups. We find that LEP households are 7.1 percentage points less likely to be homeowners than English proficient households who speak English at home, even when controlling for household and locational differences. We compare this with only a 1.0 percentage-point homeownership rate gap between English proficient households who speak a language other than English at home and English proficient households who speak English at home. These results suggest there are barriers in the mortgage market that affect those with limited English proficiency in a different way than English proficient speakers who speak a language other than English at home. Given our results, we lay out the implications for policy and what actors (e.g., individual lenders, loan officers, the Federal Housing Finance Agency, Fannie Mae, Freddie Mac, and the Consumer Financial Protection Bureau) can do to decrease language barriers in the mortgage market. 

Research Areas Housing finance
Tags Homeownership
Policy Centers Housing Finance Policy Center