Undocumented Immigrants ID'd for Home Loan Mission

Undocumented Immigrants ID'd for Home Loan Mission
Opportunity Matters Arkansas, a Conway nonprofit that facilitates home loans to undocumented immigrants, was founded by Bunny Adcock, left, director and co-founder of Home BancShares Inc. Francisco Yanez, owner of FYI Taxes & Insurance, is president of OMA. (Karen E. Segrave)

Four years ago, Robert “Bunny” Adcock stumbled across an underserved lending niche in Conway: undocumented immigrants. He discovered an underground financial system where taxpaying noncitizens paid inflated interest rates to borrow money to buy homes.

His revelation led to the launch of Opportunity Matters Arkansas, a nonprofit organization whose mission to remedy that inequity is one he hopes will be replicated in other communities.

“I was in a CPA office one day and learned of a woman who had died,” Adcock recalled. “She held these high-interest loans to Hispanics. I wondered why don’t they don’t go to banks and get a lower interest mortgage?”

The simple answer was conventional lenders weren’t an option because the borrowers weren’t in the country legally, and dealing with undocumented immigrants presented a political hot potato.

“Bankers won’t lend them money,” said Francisco Yanez, president of OMA and owner of FYI Taxes & Insurance in Conway.

His office space has served as the business office for Opportunity Matters since its formation in March 2019. The group functions as a go-between for squeamish bankers who are wary of lending money to undocumented immigrants.

OMA is willing to work with borrowers who don’t have a Social Security number but do have an Individual Taxpayer Identification Number (ITIN). The tax processing number is issued by the Internal Revenue Service regardless of immigration status.

The dichotomy of immigration and tax law is evident: The IRS is content to collect taxes from any wage earner in the United States, lack of green card or visa notwithstanding.

Adcock researched the legalities of loaning money to undocumented immigrants before pursuing his do-gooder idea.

“Can we legally make loans to undocumented immigrants — and no one could answer that question,” he said. “Finally I was told by a guy at the Federal Reserve they could find no prohibition against it. But he said it wasn’t politically correct.”

The issue of political correctness and potential regulator ramifications derailed an initial effort to simply bring creditworthy borrowers to banks and help the parties work through the loan process.

“I hit a wall,” Adcock said. “Nobody wanted to touch it. Later I had an early morning brainstorm: What if we start our own organization, so we can borrow the money and lend it.”

How It Works

OMA borrows the money to acquire the house and sells the residence to a homebuyer on a lease-to-own contract. The nonprofit holds title to the property until the buyer pays off the contract.

The lease-to-own agreement functions as a five-year, fixed-rate loan amortized for 20 years. OMA charges 2-3 percentage points above its bank loan to cover costs. “If the loan matures, we’ll renew it and reprice it, if need be, because of changing market conditions,” Adcock said. “We have one buyer who is paying $35,000 a year because he’s in a hurry to get the house paid off.”

The group’s portfolio consists of a half-dozen homes in Faulkner County (five in Conway and one rural residence) along with a house in Little Rock and another in Alexander.

“We’re very close to a $1 million in loans,” Yanez said.

To qualify for the OMA program, would-be buyers must have the capability to pay 10% of the purchase price up front and must complete a series of educational sessions conducted by the nonprofit.

The three sessions are divided into financial, real estate/city regulations and understanding the legal framework of the deal.

The financial session covers basic information about banking that includes checking, savings and credit accounts, creating a budget and how interest works.

The second class covers local laws and procedures related to real estate, property insurance, home inspections and appraisals.

The final session delves into the legalities surrounding the application and lease-to-own contract with OMA and any lingering questions.

The practicality of the sessions has drawn favorable reviews from local lenders.

“We’ve now had banks approach us to do training for their customers,” Adcock said. “We would be happy to help any other town interested in this.”

Opportunity Matters Arkansas is led by a 16-member, all-volunteer board of directors representing a broad background of expertise from the Hispanic and Anglo communities. Members of the board help conduct the educational sessions to prepare would-be borrowers.

The leader of Conway’s utility conglomerate said he was recruited by Adcock to join OMA’s board and quickly embraced its vision.

“The attraction for me is the clientele we’re catering to are hardworking people who pay their bills and want to get ahead, said Bret Carroll, CEO of Conway Corp.

“To the extent you can put a hand out to help, I’m always drawn to those stories.”

Levy Hill, deputy director of planning and development for Conway, wasn’t put off by the politicized demographics of undocumented immigrants when asked to join the Opportunity Matters board.

“I approach it from an apolitical standpoint,” Hill said. “I’ve learned a lot about the different situations that fall into the undocumented moniker. Our undocumented population in central Arkansas runs a wide spectrum of situations. A lot of it deals with perception.

“We help develop their financial IQ and trust with lending institutions. Our applicants are reviewed by a loan committee just like any financial institution.

“Some we can direct to conventional lending.”

Arturo Moraga, a Conway branch manager for Simmons Bank, said his participation as a director with Opportunity Matters is linked with his personal story, which motivates him to help other immigrants.

“I came from parents who came here for a better opportunity,” Moraga said of his family’s move to America. “We’re giving them the financial opportunity to live their dream.”