Closing the Black wealth gap
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In 2004, David McGee set out with a vision to help Black families own a home. The former banker and financial consultant launched Build Wealth MN, a nonprofit organization dedicated to doing just that. Eighteen years, and over 3,000 homes and families later, he is just getting started.
Minnesota’s homeownership disparity—the difference in ownership rates between White/non-Hispanic households and African American and households of color—ranked among the highest in the nation in 2020.
A report by Minnesota Compass documented that 25.3% of African American households in the state-owned homes (29,209 homeowners) compared to 76.9% of the state’s White households (1,452,512 homeowners).
This represents a racial wealth disparity of nearly 52 percentage points—a gap Build Wealth MN (BWMN) aims to reduce by 15% by financing 9,000 new homeowners over 5 to 7 years. But how?
In December 2021, the group introduced the 9000 Equities Initiative to an intimate group of stakeholders. The plan, slated to launch March 2022, creates pathways to homeownership by providing affordable first mortgages, or equivalent financing opportunities, for African American households within historically underserved communities that struggle to access mortgage credit.
Backed by a collaborative of stakeholders that includes the who’s-who of the real estate and financial services industries, the group intends to close the gap by 5 percentage points within the first three years of the plan by creating 950 new African American homeowners each year, with an additional 5,791 African American homeowners created over years 4 to 7, closing the gap by another 10 percentage points.
“Black families have been cheated, denied the pursuit of happiness or the opportunity to build equity and wealth,” said David McGee, the 39-year banking veteran and founder of Build Wealth MN. “Now is a critical time to provide targeted resources before too many families are priced out of homeownership.”
Despite their rising share of the state’s population, too many households in communities of color face serious obstacles when trying to enter the mortgage market. The foreclosure crisis of 2009-2010 hit households of color disproportionately, creating significant declines in homeownership rates.
Build Wealth MN’s mission is to strengthen underserved communities by empowering families to build sustainable social and economic wealth. A certified Community Development Financial Institution (CDFI), a HUD-approved financial counseling agency and lender, BWMN is also a LISC-certified Financial Opportunities Center.
BWMN delivers its programs and services around the “Family Stabilization Plan” (FSP) program—a holistic financial literacy model that blends comprehensive literacy and coaching with access to financial resources, including high-quality consumer loans, credit restoration, and down payment assistance.
The program has helped hundreds of families—81% of Black/African descent and 61% women—trapped in multi-generation poverty, get out of debt, and increase financial stability.
“Build Wealth offered me the exact resources I needed when it came to buying my first home. The team was great to work with and extremely supportive!” said Kendra W., a BWMN client who successfully completed the Family Stabilization Program.
Since its inception, BWMN has helped more than 3,000 families attain homeownership, increase credit scores by an average of 114 points, and start savings accounts.
“We’re creating legacies,” continued McGee. “Homeownership is a critical driver of building household wealth. Our goals are to remove the barriers Black families continue to face and set the pattern for creating generational wealth.”
To learn more about Build Wealth MN’s 9000 Equities program, visit: www.9000Equities.com or call 612-871-9000.
Anika Robbins welcomes reader responses to arobbins@theanikafoundation.org.