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14 Mortgage Lenders Serving Black Communities
Black-led lenders make more loans to Black borrowers — and they can be a good fit for allies, too.
Kate Wood Lead Writer | Homebuying, mortgages, homeowership
Kate Wood joined NerdWallet in 2019 as a writer on the homes and mortgages team. With an educational background in sociology, Kate feels strongly about issues like housing inequality and relishes any opportunity to demystify the homebuying process. Prior to joining NerdWallet, she wrote about home remodeling, decor and maintenance for This Old House magazine. Despite having learned just how difficult old houses can be, Kate purchased and is slowly renovating an 18th-century home in eastern Connecticut.
Alice Holbrook Assigning Editor | Homebuying, savings and banking products
Alice Holbrook edits homebuying content at NerdWallet. She has covered personal finance topics for almost a decade and previously worked on NerdWallet's banking and insurance teams, as well as doing a stint on the copy desk. She is based in Ann Arbor, Michigan.
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Banks and credit unions that have Black leadership — based on how their executives or board members identify — tend to serve communities that are majority Black. They also make more home loans to Black borrowers, according to data from the Federal Deposit Insurance Corp.
Because these institutions tend to be smaller and community-focused, to obtain a home loan from one of them, you generally need to live within their state, if not within a more specific metro area. There's currently only one Black-led nonbank mortgage lender in the U.S., Legacy Home Loans, which does business in 23 states as well as Washington, D.C.
Getting a mortgage from a lender that serves Black communities doesn't just enable you to become a homeowner. Giving these institutions your business can help support their missions of increasing economic opportunities for underserved populations.
Whether or not you live in an area where working with a Black-led or Black-owned mortgage lender is an option, consider supporting the Black community by working with Black professionals or others who share your values during your home search and while securing your mortgage. For example, you can look for a real estate agent who is a Realtist, which designates an affiliation with the National Association of Real Estate Brokers. NAREB, which has a primarily Black membership, is focused on promoting fair housing and equal rights.
If you want to maintain a relationship with your mortgage lender after closing, ask the loan officer whether the lender services their loans. Many financial institutions that provide home loans then sell them to other companies, giving them funds to make more loans. But that also means you may end up making your mortgage payments to a nonbank servicer rather than the lender you started out with.
Black-led and Black-owned mortgage lenders
Andrews Federal Credit Union • DC, MD, NJ, VA
Good for: Military borrowers. Though it's possible for anyone to become a member of the credit union, servicemembers affiliated with Air Force bases in Maryland and New Jersey are automatically eligible. Plus, Andrews has won awards from the U.S. military for their service to troops.
Primary location(s): Maryland, New Jersey, Virginia, Washington, D.C.
Good for: Tennessee borrowers with nontraditional income or credit histories. Among its many home loan offerings, Citizens offers portfolio loans. These mortgages stay on the bank's own books, allowing the lender to have the final say on giving out loans.
Good for: First-time home buyers in Atlanta. Via partnerships with the Federal Home Loan Bank of Atlanta and the Atlanta Housing Authority, Citizens Trust offers eligible first-timers up to $25,000 in down payment and closing cost assistance.
Good for: D.C. metro and Philadelphia home buyers seeking flexible mortgage options. Democracy offers some unique home loan options, including a 10% down payment loan that doesn't require mortgage insurance and a 15/15 adjustable rate mortgage where the rate changes just once.
Good for: Michigan borrowers looking for less common loan types, including condo loans and doctor loans. First Independence also offers typical fixed- and adjustable-rate home loans.
Good for: Low- to moderate-income borrowers in the South who may be able to take advantage of HOPE Affordable Housing Loans, which offer greater credit and underwriting flexibility. Hope Credit Union also offers ITIN loans for borrowers who do not have Social Security numbers.
Good for: Borrowers outside of major metro areas who want to work with a Black-led lender. Legacy has strategically expanded its physical branches in cities with significant Black populations, but they are licensed to do business in 23 states plus Washington, D.C.
Primary location(s): California, Georgia, Maryland, Missouri, Nevada, North Carolina, South Carolina, Texas
Good for: First-time home buyers in Detroit, Louisiana, Mississippi and the Kansas City metro area. While Liberty Bank offers a standard range of home loans in all states it serves, in these areas Liberty has first-time homebuyer programs with features like flexible underwriting standards and low down payments.
Municipal Employees Credit Union of Baltimore • MD
Good for: Potential home buyers in Baltimore. MECU offers a 0.25% interest rate discount for eligible first-timers. They also display sample interest rates clearly on their website, helping you to comparison shop.
Good for: Buyers looking for affordable housing in the highly competitive cities where OneUnited operates. OneUnited offers the UNITY Home Loan for first-time buyers and works with local organizations that provide payment assistance. It also provides loans for homes in Community Land Trusts, which create sustainable, affordable communities.
Good for: South Carolina borrowers looking for a digital experience. Optus Bank allows mortgage applicants to take care of many parts of the process online, like uploading documents and tracking their home loan's progress.
Good for: First-time home buyers in the St. Louis area. In addition to helping qualified borrowers connect to assistance programs, the credit union also provides credit counseling and other support to help prepare borrowers for homeownership.
Good for: Baltimore borrowers looking for hands-on service. SecurityPlus has a large number of loan officers for its relatively small size, plus a full menu of conventional and government-backed home loans.
Methodology:To come up with this group of lenders, we looked at lists of "minority depository institutions," or MDIs, from the Federal Deposit Insurance Corp. and the National Credit Union Administration. Both of these organizations track financial institutions that are led by or focus on serving people of color, though their qualifications for MDIs differ.
The FDIC considers banks and other financial institutions to be MDIs if at least 51% of shareholders are "minority individuals" or a majority of the institution's directors, as well as the community it serves, identify as non-white.
The NCUA designates credit unions as MDIs if a majority of the credit union's board of directors, members and the community it serves identify as Black, Asian American, Hispanic or Native American. The credit unions provide this information to the NCUA.
Both the FDIC and NCUA lists indicate whether an institution meets their criteria for MDIs on the basis of having Black leadership or serving predominantly Black communities.
We also included Legacy Home Loans, which is currently the only Black-led nonbank mortgage lender in the U.S.
