Asians In Northwest Arkansas Find Few Obstacles to Home Ownership

Unlike other minority groups, Asians in Northwest Arkansas are less likely to encounter problems when applying for home loans. According to publicly available data from the Home Mortgage Disclosure Act, the Asian community has an eight percent rate of rejection for home loan applications – the lowest rate of any racial or ethnic group in the metro area.

A key factor in this may be incomes that are higher than the median income level of the metro area, and Arkansas in general – many local members of the Asian community are professionals, working at the University of Arkansas or at major corporations like Walmart. One of these professionals, Seong Kang, is poultry science researcher at the University. Kang is an immigrant from South Korea – he has lived in the United States for 21 years and last year, he became a U.S. citizen. Like many in the Northwest Arkansas Asian community, Kang is highly educated – he has a undergraduate and Master’s degrees from South Korean universities and he earned his P.h.D from the University of Minnesota. After living here for a few years, Kang said he realized, “oh, this is my town.” Kang joked, “It’s not cold here compared to Minnesota, so maybe, I can enjoy my life retired.”

Seong Kang recently purchased a house and got a home loan to do so. For him, the process was slightly unconventional – he purchased the home directly from a builder, and was required to get his mortgage through the builder’s preferred bank, Priority Bank.They recently closed, so Kang’s house isn’t even finished yet, but when it is, it will have three bedrooms, two bathrooms, and a two-car garage.

As Kang is in his 50s with a family, his most recent home purchase was not his first. He still owns a condo in Minnesota, which he bought about 13 years ago. He said it’s now worth about $100,000. When he and his family moved to Arkansas, they tried to sell it, but couldn’t without losing money. So, Kang simply kept the condo and used it for rental income. “After moving here, I rent that house and then from that money, I pay for the apartment here,”  Kang said. With the cost of living significantly lower in Northwest Arkansas than in Minnesota, Kang said he not only paid for his apartment but actually turned a profit as well.

Kang’s new home cost him $131,000. “This is a brand new [home],” Kang said. “I select the design, color, everything…It was good deal.” Kang got a conventional loan, signing a 15 year mortgage at 3.125 percent, with five percent down. Kang said his second experience as a home buyer was just as easy as the first. “It was very smooth,” Kang said. “They ask me my income, my job history and then they recognize me having another property but I paid all the mortgage [for] that property … so they agree, oh, there’s no problem.” Kang added that while his application in Minnesota went smoothly, the second time was easier. “Here, with a little experience and time, no uncomfortableness because I know what’s going on here in the United States,”  Kang said.

In addition to high incomes, Kang said cultural norms might also make it easier for Asian applicants to get home loans. “Asian people, in my case from South Korea, have a lot of support from parents when we try to buy home here,”  Kang said. “My wife had some inheritance from her parents … so when I try to buy house, they sent money, but that is very common in Asian people.” Simply, property values differ based on location, and the contrast between South Korean property and Arkansas property is stark: “In South Korea, an apartment is a million dollars. So $130,000 is very cheap,”  Kang said.