Homeownership has long been touted as a way to build wealth and community. But in the past 10 years, African Americans have seen a decline in homeownership rates, dropping from 29 percent to 23 percent. Even worse, African Americans in Minnesota face one of the largest homeownership gaps in the country as compared to 76 percent of White Minnesotans.
With the goal of fostering collaborations that advance homeownership equity, the Homeownership Opportunity Alliance (HOA) has recently launched a new campaign, “Get Ready, Be Ready,” to better connect households of color with information and resources to start their journeys toward owning a home.
Part of the decline in African American homeownership is due to the 2007-2008 housing bubble that saddled many with subprime loans based on fudged numbers that, coupled with the lack of resources, ultimately led to foreclosures and lost homes.
“If you had a pulse 10 years ago, before the crash, you could get a mortgage,” Henry Rucker, housing and financing coach coordinator at People for Pride in Living (PPL), told the MSR. Today, potential homebuyers have fewer options and less access to resources than before.
The campaign launch, hosted May 17 at the Minnesota Housing’s St. Paul office, brought together industry partners to break down challenges and establish commitments and strategies to help families of color not only to buy but also to keep their homes.
The alliance, comprised of more than 20 government, nonprofit, banking, and real estate agencies, was formed shortly after the housing and foreclosure crisis.
Member organizations include PPL, the Federal Reserve Bank of Minneapolis, the City of Minneapolis, the City of St. Paul, the African Development Center, Hennepin County, the Minneapolis Urban League, Minnesota Housing, KleinBank, and the Minnesota Homeownership Center.
“After the industry crashed and the foreclosure crisis happened, a lot of people were kind of left outside the door trying to figure out what’s next,” said Trent Bowman, vice president and community development officer at KleinBank, who has been part of the alliance since its inception. “This whole group came together to have those answers — the ‘What next?’ answers — to make sure that we do a better job the second time around for new homebuyers.”
Despite such challenges as the lack of income (another glaring disparity in Minnesota) and access, the alliance’s research shows that there are more than 64,000 households of color that are in a position to buy a home today.
The alliance is combining their resources and outreach efforts to raise awareness and reach these potential homebuyers, many of whom, Bowman said, have “self-selected” themselves out of ownership. “The most important thing is to not get caught up in that ‘We can’t be a homeowner’ myth. We’re here, the information is available for you,” said Bowman.
“The good news is that we are connecting amazing people like Trent and Henry with government and with more resources so that we can make sure that people know that there are resources out there for them and [that] homeownership is possible,” said Megan Ryan, Minnesota Housing director of communications.
“The [Get Ready, Be Ready] campaign is about more than having signage,” Bowman told the MSR. “The responsibility of the alliance to the homeowners is to make sure that they…have the necessary information to be successful. And, to make sure that not only the community and the homebuyers have [access to resources], but even the lenders, the financial institutions… We want them to know everything about FHA, HomeReady, Home Possible — any product with a down-payment assistance program that is available,” he continued.
The campaign will also help address such issues as credit building— something that is sorely needed in a market that demands high (if not higher) credit scores for even a rental property. In addition, the alliance aims to build viable relationships between potential homebuyers, banks and real estate agents without judgments.
“This is not a business that you do over the phone,” said Bowman. “This is a sit-down with your loan officer, a sit-down with that individual, and talk about goals and get to know each other, so they know [we] have their best interest at heart.”
That includes qualifying and finding homes for buyers that are not just based on their incomes, but their lifestyles. “A dream home is a home you can afford,” Bowman said, not just one you qualify for.
Rucker agreed, noting that loans are made based on buyers’ gross income. “But, you pay your bills on your net. So, if your gross is $50K, you don’t bring home $50k. Let’s say you bring home $38K… It’s my job as a financial advisor and coach navigator to put your [financial] puzzle together so when I send you to Trent, to KleinBank, Associated Bank, U.S. Bank, Wells Fargo, Bremer or whoever, when they open your box, all the pieces of the puzzle are in there and you can get approved.”
Rucker said that kind of success doesn’t happen overnight. “Just having this conversation is partial success. But, I think that once we start to see that number go the right direction, if it’s two percentage points, five, to me that’s success.”
But, he added that moving the needle doesn’t mean stopping efforts. “Even if we reach our counterparts, you can’t stop there, either because you can say, ‘Oh, we made it, and now we’re going to stop.’ We don’t want to have that mentality.”