Fears that a change in immigration policy could throw cold water on the hot housing market are unfounded, according to the director of the Joint Center for Housing Studies at Harvard University.

Even if the Bush Administration was to shut the doors completely to further immigration, the impact on housing would be negligible, at least in the short-term, Nicolas Retsinas believes.

"The immigrants who will be buying homes over the next few years are already here," the former Department of Housing and Urban Development official said. Noting that immigrants and minorities have been a major factor in the current housing boom, those who believe that housing costs are way over-inflated the so-called "bubble" proponents -- have argued that a slow down in immigration could help hasten a decline in prices.

But Retsinas said the Joint Center's research shows that on average, immigrants don't enter the housing market until they are in America for 11 years.

And at the recent National Association of Home Builders convention, Jim Taylor of Fannie Mae made the same point, saying that whatever the future holds regarding immigration, there are enough foreign-born persons already in this country to keep housing strong for at least six and perhaps even 10 more years. Between 1980 and 1995, Taylor said, the number of new immigrant owners increased by 1.4 million. And between 1995 and 2010, that figure is expected to rise by more than 50 percent to 2.2 million.

He also said that immigrants and other minorities, who accounted for nearly 40 percent of the growth in the nation's home ownership rate over the last five years, will be responsible for almost two-thirds of the growth in the number of households between 2000 and 2010.

Taylor and Rebecca Froass, manager of industry relations at Freddie Mac, told the NAHB that if there is a problem with immigrants, it won't be with the number but rather with reaching them.

"These potential home buyers have unique needs," said Froass.

Typically, the primary barriers to ownership are credit issues and a lack of funds for a downpayment and closing costs. But Froass said minorities and immigrants face other hurdles, including a lack of affordable housing, little understanding of the home buying process, and continuing financial obligations in their home countries.

For example, six out of every 10 Hispanics are uncomfortable with home buying terminology, half think they need "perfect credit" to buy, and less than four in ten are aware lenders are not required by law to give them the lowest interest rate possible.

The Freddie Mac executive said her company is addressing these issues on several fronts, including education, innovative products and greater underwriting flexibility.

To make is easier for immigrants with extended families to qualify for financing, for example, Freddie Mac now allows income received from related persons to be used in calculating the borrower's stable monthly income. It also allows relatives who live together to pool their funds to cover the downpayment and closing costs.

In addition, for borrowers who are still not comfortable with checking and savings accounts and prefer to pay their bills with cash, cash-on-hand can now be used toward downpayment and closing costs. And for borrowers who change jobs frequently but still manage to maintain steady incomes, the minimum period of employment has been eliminated.

Even with these improvements, though, Taylor, who is director of product innovation at Fannie Mae, said conventional lenders have a tough time reaching "non-traditional" borrowers and not just because these lenders have a minimal presence in the communities where immigrants and minorities live.

For one thing, he pointed out, African-Americans and Hispanics are far less likely to turn to their primary bank for a home loan because they have no trust in the institution or believe there will be obstacles put in their way that are too difficult to overcome.

"The certainty of getting a 'yes' is very important to this consumer, even more important that price or saving money on the transaction," Taylor said.

Published: March 12, 2003

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.