April is Community Bank Month, and, despite obvious market challenges, there are reasons for community banks to celebrate and look forward to future growth.

A recent ABA Banking Journal survey revealed positive outlooks among community bank CEOs. Nearly half expressed confidence in their bank’s revenue growth and prospects over the next year and have plans to:

• Expand organically within current markets – 61%
• Implement new technologies to reduce operating costs – 53%
• Introduce new products or services for consumers or commercial clients – 45%

One thing that may be contributing to that confidence is an understanding of what the future holds in terms of population growth and the opportunity it could present for community banks.

The U.S. population is changing

Statistics provide a clear picture of what homeownership will look like in the next few decades. From 2010 to 2020, our population grew by more than 20 million – with people of color accounting for all the growth.¹ In the next 20 years, 70% of the homeownership growth rate is projected to come from Latinos.² 

3 reasons why community banks are at an advantage

1. Hispanic homebuyers are the youngest racial or ethnic demographic in the U.S., with a median age of 31.³ 

It’s safe to assume that this age puts most of them in the first-time homebuyer category, which means these borrowers will most likely require the extra attention and personal service for which community banks are known. 

MGIC offers a plethora of tools and resources (most available in English and Spanish) to help you educate and empower these first-time Hispanic homebuyers:

• First-time homebuyer resources
• First-time homebuyer library
• Hispanic marketing library 
• Consumer calculators
• Readynest.com for your borrowers

2. 27% of Latinos lack trust in financial institutions⁴, possibly due to experiences with corrupt banks in their countries of origin.

This lack of trust could lead to borrowers seeking out lenders that provide a local presence and specialize in relationship-based lending solutions – characteristics of community banks.

Get the inside scoop on how to connect with Hispanic homebuyers in your market, including:

1. Common challenges
2. The role of family bonds
3. How to build trust as an LO

3. Hispanic and Black consumers are more likely to have no credit history or not enough to produce a credit score.⁵

Through portfolio lending options, community banks can offer more flexible underwriting standards to meet credit-invisible borrowers’ needs. 

Community Pro^TM is an affordable lending product that helps community banks to stretch beyond the GSEs’ limits to offer more flexible financing options to a broad spectrum of borrowers, including those with nontraditional credit. It offers a fresh alternative to the GSEs’ and the FHA’s programs and can help your borrowers:

• Increase their buying power
• Expand their cash flow options
• Reduce their monthly mortgage payment

And our equitable homeownership strategy, approach and resources are available today to assist you in helping your borrowers to achieve sustainable homeownership.

MGIC is proud to partner with thousands of community banks, and we look forward to supporting community banks as they meet the needs of the next generation of borrowers.

Community Pro™ is a trademark of MGIC.

1 Joint Center for Housing Studies (JCHS) at Harvard University, “The State of the Nation’s Housing 2022,” JCHS tabulation of the U.S. Census Bureau, Housing Vacancy Surveys
2 NAHREP, 2022 State of Hispanic Homeownership Report
3 NAHREP, 2023 State of Hispanic Homeownership Report
4 UnidosUS, Latinos Banking and Credit Survey: Arizona, California, Texas
5 The CFPB Office of Research, Data Point: Credit Invisibles