(ConservativeHub.com) – A new Biden administration policy from the Federal Housing Finance Agency which was set to go into effect on May 1, is going to be requiring homebuyers who have good credit to pay more in order for riskier borrowers to be subsidized. According to Fox News, some reports indicate this could have a particularly negative impact on Asian Americans, who are currently facing barriers to qualifying for financing options.
The new rule would allow people who have lower credit ratings and smaller down payments to become eligible for improved mortgage rates. People who have higher ratings will also be required to pay higher fees.
These new rules appear to disproportionally affect Asian Americans, who generally have better credit scores other racial demographics. According to Fox News, Investopedia has shown in a report that the average credit score of Asian Americans, around 745, would be rated as “very good” under the FICO standards. They are the only racial demographic with this rating class.
The report also indicates that white Americans maintain an average score of 734, while Hispanic Americans have 701 and Black Americans have a score of 677.
A person’s credit score tends to have a significant impact on whether a prospective borrower is deemed to be a good candidate for a loan. It can also determine what the interest rate they will pay will be. Those with higher scores under the new rule would be punished for being creditworthy, with experts noting that those with a score of more than 680 could be paying another $40 per month if they have a $400,000 mortgage.
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