BET.com announced Wednesday that it has forged an alliance with mortgage loan financier Fannie Mae and lenders Cendant Mortgage and HomeSide Lending, Inc. to offer an online service for African-American homebuyers.
Cendant and HomeSide will feature mortgage information and applications on the BET.com Web site — an African-American portal and online urban music destination — while Fannie Mae will provide technology to conduct online mortgage transactions.
“We believe this significant initiative will influence African-Americans’ likelihood of applying for a mortgage online and should therefore positively impact home ownership rates among this community,” said Robert Johnson, chairman and CEO of BET.com and founder of Black Entertainment Television.
Access to Lenders
Phase one of the new service offers users step-by-step guidance on how to buy a home, as well as access to lenders who will walk prospective homebuyers through the online loan application process.
Phase two will be unveiled in the third quarter of this year, offering expanded content, real estate listings and information about residential communities.
Breaking Down Barriers
While the online real estate market is steadily growing, the BET.com initiative is believed to be the first geared specifically toward African-American homebuyers.
Home ownership in the United States reached record highs in the 1990s, but the rate for minority households is still considerably lower than the rate for white households. Last year, white households reached an ownership rate of 73.2 percent, while minority household ownership was about 46.7 percent.
“Collectively, we share an interest in breaking down the barriers to home ownership and reducing the mortgage financing costs to advance home ownership opportunities for more African-Americans,” said Franklin Raines, chairman and CEO of Fannie Mae.
Fannie Mae has included the new BET.com initiative in its American Dream Commitment, a ten-year, $2 trillion (US$) effort to increase home ownership rates and serve 18 million targeted American families, including five million new minority home buyers.
Nuts and Bolts Approach
Last year, after President Clinton used his State of the Union address to place the issue of the digital divide squarely on the front burner, BET.com’s Johnson said the primary goal of the portal would be to become a hub for African-American Internet companies to foster business alliances with one another, and to help Net ventures find customers.
While others have attacked the digital divide as a social issue or race problem, Johnson’s company has taken a nuts and bolts approach to including African-Americans in the Internet culture and the new economy.
“As far as the digital divide, I think it is more attitudinal than economic,” Johnson said earlier this year, “and we are going to do our best to solve that attitudinal problem.”
Online Real Estate Thriving
BET.com’s initiative comes at a time when American house hunters are increasingly turning to the Internet to find their dream homes, according to a recent survey by the National Association of Realtors. In 1999, 37 percent of all those shopping for houses used the Internet in their quest.
Meanwhile, the number of U.S. households is expected to grow to 43 million this year, from 33 million in 1999, effectively widening the potential customer base for online realtors, according to Media Metrix.
“Buying a house is an infrequent transaction, a complex transaction and a highly regulated transaction,” said Richard Smith, CEO of Cendant Corp. “It represents the largest single purchase, and the biggest net asset, for most people, and that means you have to provide a large degree of personal service.”
Johnson agrees, particularly in light of the fact that many African-American homebuyers who use BET.com’s new service will be purchasing their first home, and many may be new to using the Internet.