Black homeownership deserves a second look

Sponsored content from Minnesota Homeownership Center

Ask any financial coach and they’ll tell you homeownership is the number one way that households build wealth in the United States. But the home purchase process is complicated, and for most of our collective history, Black households were literally barred and excluded.

This was very much by design. Blacks were excluded from purchasing the most desirable homes via racial covenants in property deeds. 

They were denied mortgages for the homes that were accessible to them because lenders viewed these homes, and Blacks themselves, as risky and even unworthy investments. (This is called redlining.) And for those who were fortunate enough to have achieved home ownership despite these barriers, generally in vibrant, commercially successful, and majority Black neighborhoods, government planners regularly used their powers of eminent domain to bulldoze these communities and make way for interstates and other public “improvement” projects with little regard for those displaced.

As a result of these racist systems and policies, America today is left with a large and stubborn racial homeownership gap. In Minnesota, 77.5 percent of White households own their own home compared to just 30.5 percent of Black households—a gap of 47 percentage points.

Further, the homeownership gap is the largest component of America’s staggering racial wealth gap, and Minnesota’s gap in this area is the third-worst such gap in the country. This needs to change.

The Minnesota Homeownership Center is committed to reducing our state’s racial homeownership gap. Founded in 1993, the Center serves as a Housing and Urban Development (HUD) Intermediary by leveraging funds to enable free advisory services aimed at facilitating successful and sustainable homeownership. 

These services are delivered via a network of professional homebuyer advisors and educators embedded in community-based organizations across the state. Here in the Twin Cities, providers include agencies such as Model Cities, Northside Residents Redevelopment Council, PRG, Project for Pride in Living, and Urban League Twin Cities. 

The Center certifies these homeownership advisors, maintains the Home Stretch homebuyer education curriculum, and certifies class instructors and educators.

The Minnesota Homeownership Center’s homebuyer advisory services are available to everyone, free of charge. Awareness of these services, however, is not widespread. 

As we go about spreading the word, we’re focusing on those communities facing the greatest barriers to homeownership, namely lower-income households, and communities of color. We’re doing this by debunking the myths around credit, income, and down payments that keep people from considering ownership for themselves. 

And we’re partnering with like-minded organizations working in the BIPOC homebuying space, including the National Association of Real Estate Brokers and Build Wealth Minnesota’s 9000 Equities initiative.

Over the course of the rest of the year, the Minnesota Homeownership Center will be running additional articles diving deeper into homeownership myths, the process of homebuyer advising, the newly revised Home Stretch homebuyer education curriculum, working with Realtors® and lenders, and more. 

Our goals are to make readers and their families and friends aware that these free services exist, to drive readers to our website at www.HOCMN.org for more information and to access these services, and to enlist readers who do not currently own to consider, or reconsider, homeownership for themselves.

Some may ask, why consider homeownership now with the market tight and interest rates high compared to recent years. Our answer: The right time to purchase is the time that is right and that works for you. And even if you’re not ready today, you can GET READY now, so you can BE READY when the time IS right. The bottom line to consider is who gets to benefit from your monthly housing payment. 

You can either pay a landlord’s mortgage, helping them to build wealth, or you can pay your own mortgage and begin building your own wealth through increasing home equity. Even when home values are stagnant, you’re still building this equity each month as you pay down your mortgage and you own outright a greater and greater share of your home.

For more information on the Minnesota Homeownership Center, its advisor and education services, and the history of racism in American homeownership, go to www.HOCMN.org.