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Demography & Population Studies

Black and Latino Homeowners Face Serious Barriers to Refinancing in Los Angeles County

Contributors

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José Loya Experts
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Gabriella Carmona Staff

The study comes at a crucial time as neighborhoods such as Altadena, which recently experienced significant losses due to the Eaton Canyon wildfire, work to rebuild.

FOR IMMEDIATE RELEASE
Contact: lppipress@luskin.ucla.edu

UCLA LPPI Report Finds Black and Latino Homeowners Face Serious Barriers to Refinancing in Los Angeles County

LOS ANGELES (April 29, 2025)  – A new report from the UCLA Latino Policy and Politics Institute (LPPI) highlights troubling gaps in mortgage refinancing opportunities for Black and Latino homeowners in Los Angeles County. The study, authored by Dr. José Loya and Gabriella Carmona, points out critical inequities that prevent these communities from tapping into their home equity, severely limiting their ability to build and preserve wealth.

The new study comes at a crucial time as neighborhoods such as Altadena, which recently experienced significant losses due to the Eaton Canyon wildfire, work to rebuild. The authors found that homeowners of color disproportionately face barriers to refinancing–hindering efforts to leverage home equity, lower interest rates, and secure loan terms that make recovery and wealth preservation possible.

The study analyzes 2018–2019 Home Mortgage Disclosure Act (HMDA) data and reveals stark disparities:​

  • Denial Rates: 34% of Black and 32% of Latino applicants were denied refinance mortgages, compared to 24% of white applicants.​
  • High-Cost Loans: Nearly 40% of Latino applicants were either denied or offered high-cost refinance loans, compared to 30% of white applicants.​
  • Home Improvement Loans: Among applicants seeking refinancing for home improvements, 12.4% of Latino and 12.3% of Black homeowners received high-cost loans, compared to 10% of white and 8.6% of Asian applicants.​

“The recent Eaton Canyon wildfire didn’t just highlight existing vulnerabilities—it amplified longstanding inequities,” said Loya. “Black and Latino homeowners need fair refinancing access right now, or they risk falling even further behind.”

The report outlines several solutions to address these inequities. Researchers suggest that financial institutions adopt more inclusive underwriting criteria, like factoring in ownership history and consistent utility payments, to offer a fairer picture of financial reliability of homeowners. The authors also recommend stronger federal oversight, requiring lenders to publicly report detailed borrower data, such as credit scores and employment history, to better identify and address lending disparities.

To address the immediate home improvement needs of Black and Latino homeowners, the City and County of Los Angeles should significantly increase funding and access to local home renovation and repair programs, ensuring homeowners have essential resources for maintenance and rebuilding. And the state, should increase funding for California’s CalHome Program, which provides vital assistance through grants and financial counseling for home repairs and refinancing needs. 

Carmona emphasized the broader implications: “Owning a home should build financial security, but our findings show the system isn’t working fairly for everyone. Refinancing is a key way families tap into their equity to reinvest in themselves, whether it be to repair their home, start a business, or secure their future. We need real, systemic change to ensure Black and Latino homeowners can reap the full benefits from homeownership.”

Read the report here.

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About UCLA Latino Policy and Politics Institute:

The UCLA Latino Policy and Politics Institute is a non-partisan research institute that seeks to inform, engage, and empower Latinos through innovative research and policy analysis. LPPI aims to promote equitable and inclusive policies that address the needs of the Latino community and advance social justice. latino.ucla.edu.