So close and yet, so far.
Cameron Park, the largest U.S. colonia, sits inside Brownsville’s city limits, and yet, it maintains an unincorporated status. Over the years, its population has grown from a few hundred residents to now about 7,000.
From an aerial view, the city grew around the colonia, virtually erasing its rural designation. Income averages became mixed up when neighbors making over $100,000 a year moved next door to Cameron Park residents, who are barely making ends meet with a little over $30,000.
“You’re in the middle of Brownsville, or what is pretty close to the middle of the Brownsville metropolitan area now. So it feels like, well, it’s urban,” Daniel Elkin, director of policy impact and innovation for Come Dream Come Build, or CDCB, a nonprofit housing organization that formerly operated as the Community Development Corporation of Brownsville, said as he sat in a park near Cameron Park.
A similar distortion happens in Washington and the east coast when Fannie Mae and Freddie Mac look at South Texas and other borderlands — the federally-backed mortgage companies no longer distinguishing which housing markets are underserved.
Variety paints the landscape of colonias like Cameron Park.
Building materials, home designs and landscaping lack consistency in the colonia, and it keeps the uniformity typically found in formal suburbs and HOA-controlled neighborhoods from forming.
Deterioration is more visible in homes built in these low-income areas. Residents are resourceful when trying to patch up a roof, making repairs or expanding their home.
“It’s just kind of making do with what you have and making do as you go,” Elkin said.
Many of the families in Cameron County who earn low incomes and need help becoming homeowners might look to get a bank loan. But it’s not so easy.
Some families are mixed-status — which means some members might not be U.S. citizens — and it makes building credit impossible.
“If you don’t have access to credit, and you don’t have access to traditional finance and banks, you’re gonna have to find other alternatives,” Elkin explained.
Colonia residents are surrounded by opportunities to get entangled in poor financial decisions.
“Our most recent data shows 19 predatory lending institutions for every one bank in the Brownsville area,” Elkin said.
Organizations like the CDCB are helping families find a path to homeownership through financial counseling, building up credit and savings and becoming homeowner-ready. However, nearly 90% of their clients fell victim to predatory loans and require years-worth of help undoing the damage.
Over the years, the CDCB helped build about 300 homes in Cameron Park, but their resources became strained after the population grew, shifted and challenged the federal government’s parameters for underserved markets.
“Lots of those colonias were rural at one point just five years ago, or 10 years ago,” CDCB Executive Director Nick Mitchell-Bennett said. “And so USDA, the United States Department of Agriculture, we could use their money, but now we can’t. Because … they’re urban, like Cameron Park in Brownsville is right in the middle of the city, but it’s not part of the city.”
As some federal resources grew more tightly restricted, help was sent another way.
The Housing and Economic Recovery Act of 2008, or HERA, was created 14 years ago to bail out the nearly collapsed Fannie Mae and Freddie Mac following the housing market crash of 2007. Carved into the bill was a duty-to-serve mandate to help low-income families living in rural regions with high needs.
In 2016, the Federal Housing Financial Agency (FHFA), or Fannie Mae and Freddie Mac’s federal regulator, went further and created a new rule to ensure the companies focused in four areas: Middle Appalachia, the Lower Mississippi Delta, colonias and rural tracts in locations the FHFA identified as “persistent poverty counties.”
The legislation was promising for nonprofit housing organizations like the CDCB and the Housing Assistance Council, or HAC, but soon, they detected a critical problem.
“They [FHFA] developed very, you know, relatively clean and neat definitions for the other high-needs areas. But they did not for colonias, they just left it basically blank. I don’t know how to say that any other way,” Lance George, director of research and information for HAC, said.
“You have Appalachia, and you have the Mississippi Delta. Those are places that you can point to … on a map,” Elkin said. “Colonias? Like, those aren’t geographically specific regions.”
The haziness by the lack of a colonia definition became a thick fog clouding the path to homeownership for colonia families and for the companies tasked with finding them.
Over the years, Fannie Mae and Freddie Mac began working in areas they knew would help them fulfill the government’s duty-to-serve mandate. The areas that were easiest to identify geographically won most of their attention.
According to a FHFA data analysis, from 2018 through 2021, 47% of all loan purchases in high-needs rural regions were made in Middle Appalachia, followed by 31% in the Mississippi Delta and 22% in persistent poverty counties.
Colonias received less than one percent, or 0.09% — a portion difficult to even see on a comparative bar chart.
“Under the duty-to-serve rule, they need to be doing more mortgage lending in colonia areas, and they just are not,” Mitchell-Bennett said.
“Right now, there’s no definition so they just kind of don’t pay attention. I’m not blaming the GSEs at this point,” he said, referring to Fannie Mae and Freddie Mac, the government-sponsored enterprises.
For the last two years, the CDCB began raising questions to FHFA while the companies, specifically Fannie Mae, began looking to nonprofits like HAC for help defining the elusive colonia.
Fannie Mae commissioned a study from HAC. Lance George began looking at existing definitions from other federal agencies as part of his research for the Fannie Mae-commissioned report and found many of them lacking.
“They’re all different. And some of them, candidly, when you review them, my critique was it didn’t look like they were developed by someone who had ever really been to the colonia or didn’t know much about it,” George said.
One of the primary definitions for colonias originated from the 90’s when the Cranston-Gonzalez National Affordable Housing Act was passed.
It defined colonias as a community within 150 miles of the border in the states of Arizona, California, New Mexico or Texas. Those communities were designated as colonias by the state or county.
The act also defined colonias by what they might lack: a potable water supply, adequate sewage systems and decent, safe and sanitary housing.
States, counties and federal agencies created lists of colonias.
In Texas, the Attorney General’s Office created a database of the colonias and tracked progress with a system no longer in use. Colonias in that database still use information from the 2010 Census.
Cameron County maps look different than those kept by the state. Those differences can be stark. One southern Cameron County colonia, Encantada, has a wide footprint on the county’s map, Elkin said, compared to the sliver in the Texas Attorney General’s map.
“If you’re an organization like CDCB and you do want to do work in the Encantada Colonia, which part of it falls within which definition?” Elkin asked. “Which part of it are you going to be able to work with federal entities to know what programs you can use in these areas? It’s unclear even for a local nonprofit that lives in or adjacent to these communities and works with them. We don’t know.”
George’s research looked through multiple colonia lists to identify communities and paired that research with granular data using GIS mapping software.
Instead of studying states or counties that were too big to study, or census blocks that were too small, George said they looked at census tracts, the “Goldilocks” unit of measurement that only held about 4,000-8,000 residents.
It also aligned with other duty-to-serve geographies, but most importantly: “it’s the lowest level that you can get mortgage data,” George said. “So you can understand what’s happening through the Homeworks Disclosure Act data.”
Then, they developed what’s termed a colonia investment area. They’re “simply census tracts that included a colonia,” George explained.
A list of colonia investment areas was created. It listed about 460 colonias across the border, with Texas claiming about 60%.
Colonia investment areas bucked the traditional definition of a colonia. Some were found beyond 150 miles from the border, while others were located in urban parts of a state. In Texas, nearly 60% of these areas were in non-rural settings.
HAC’s study was implemented by Fannie Mae in 2018, but mainly as a guide. Any mortgage loan activity in colonia investment areas was still subject to FHFA’s interpretation of what constitutes a colonia.
In 2020, HAC updated its report to update population data collected as part of the latest census.
It wasn’t until October that HAC’s report gained momentum when it became the basis for a new rule proposed by FHFA. Housing nonprofits finally saw a change on the horizon.
FHFA received a letter from the CDCB on Monday, the deadline for the public comment period. It read, in part: “The FHFA’s leadership on this topic possesses the potential to create a beneficial ripple effect. If other federal entities were to also adopt this methodology it would streamline the deployment of a suite of federal programs and services across USDA, HUD, Treasury, and others.”
If other federal agencies follow in FHFA’s footsteps in creating an updated definition of colonias, nonprofits helping residents become homeowners can see other benefits down the road.
“This would result in the real possibility of economically integrating colonia communities to their surrounding economies, supercharging efforts to address decades of disparities. We must not miss this historic opportunity by delaying any further,” the letter read.
Proyecto Azteca, a nonprofit organization working in Hidalgo County, works with federal agencies like the USDA, HUD and the county. Unlike the CDCB, they do not provide Fannie Mae and Freddie Mac products, but they do rely on maps and definitions that remain unclear and complicate the process.
Amber Arriaga-Salinas, the assistant executive director for Proyecto Azteca, consults those shifting definitions to determine if certain families are eligible for assistance to repair or buy homes with zero-interest loans that the nonprofit provides.
“We use a lot of the rural dollars, but the map gets smaller and smaller every single year,” Arriaga-Salinas said.
Some colonias are absorbed into cities and become incorporated areas, causing them to become ineligible for certain monies. Changing the definition for FHFA won’t help Proyecto Azteca families now, but it could have broader implications.
“The definition would allow us in the future to use the designation of the areas where we serve and check it off on a box, as opposed to now where we have to meet or jump through many, many hoops to be able to assist one family,” Arriaga-Salinas said.
The rule can take several months to a year before it’s adopted and begins guiding Fannie Mae and Freddie Mac to colonias in the Valley.
“What could you do if this definition changes?” Elkin asked one December afternoon as he drove through Cameron Park. “More of what we’re about to show you.”
Elkin drove through the colonia and stopped at several modestly sized homes with modern, clean designs. A rocking chair was nestled under a small porch of a brick home. It’s one of many homes the CDCB helped build.
A definition for a community such as this could soon help families make a placid scene like this their home.
For Elkin, this is just a start.
“It’s about building wealth. If you have a home, that’s the surest path in America to building wealth, you gain that equity,” Elkin said. “And so that changes not only your life, but the life of every generation that comes after you and your family. That’s our mission.”
