Work continues to create and launch a regional DPA Special Purpose Credit Program for Black homebuyers.
In January of this year, Twin Cities Habitat for Humanity and the Minnesota Homeownership Center announced receipt of a $1 million award to facilitate creation of a regional Special Purpose Credit Program (SPCP) for Black homebuyers. The award was part of Fannie Mae’s Sustainable Communities Innovation Challenge, designed to advance racial equity in housing. Since then, the organizations have been hard at work determining the various components of the program with the help of aspiring and current homeowners and industry professionals. The initiative has been christened the Advancing Black Homeownership Community Fund, and once available, this Special Purchase Credit Program will provide homeownership down payment and entry cost assistance for income-eligible Foundational Black homebuyers in the seven-county Twin Cities metro. Foundational Black Americans are Black people descended from enslaved Africans in the American system of slavery.
Homeownership is the number one-way families build wealth in the US. But Black Americans have been systemically barred from ownership for generations via racial deed covenants, redlining, and other racist policies. While these overt practices have largely been set aside, their destructive impacts remain. Today, Minnesota’s Black-White racial homeownership gap is one of the largest in the country. In the Twin Cities metro, 75 percent of White households own their own home compared to just 24 percent of Foundational Black households. This disparity shows up in household wealth as well. White households in Minnesota have a median net worth of $211,000, while Black households in Minnesota have a net median of $0.
Fortunately, momentum is growing to close Minnesota’s racial wealth and homeownership gaps, with $150 million in first-generation down payment assistance set to hit the Minnesota real estate market next year. And history shows that inventory at the lower end of the price spectrum (≤ $300K), while anemic, nevertheless accounted for the majority of home sales between 2020-2022. The Advancing Black Homeownership Community Fund is aimed at leveraging this growing momentum and opportunity by showing what can be accomplished when we get serious about addressing this lingering injustice.
The Advancing Black Homeownership Community Fund will help mortgage-ready Foundational Black renters to begin building generational wealth through homeownership. We believe the results of this initiative will uphold the use of targeted down payment and entry cost assistance as an effective tool for future efforts to reduce racial gaps in homeownership across the country.