Trying to buy your first home? Here are some ways to get real money to help
Some programs are helping to close the serious gap between black and white homeownership, in a state with one of the worst disparities in the nation.
MINNEAPOLIS – There’s no denying that the real estate market has changed dramatically.
This happened again recently when mortgage rates hit over 5% this spring, the first time in over a decade.
This makes homeownership even more difficult, especially for communities of color impacted by generations of discriminatory policies.
“Minnesota has one of the worst homeownership gaps between black and white households, as well as Native and Latino communities,” said St. Louis Park housing supervisor Marney Olson. “And although we’ve known that for a long time, not much has been done about it.”
She helped the city launch a new program late last year to help first-generation homebuyers in particular.
“Not only do we want to bring in people who have historically been kept out of homeownership, but we also want to help them build generational wealth, because homeownership is one of the best tools to build wealth,” Olson said.
According to National Association of Realtors (NAREB), a group created more than 70 years ago by African-American real estate professionals excluded from the National Association of Realtors, a recent study found that only 42.1% of black households owned their own home in 2019. That’s up from 73.4% of white households, making Minnesota’s gap one of the worst in the nation.
Olson’s schedule makes it a priority to shut this down.
“You don’t pay monthly payments, there’s no interest, but 5% of that loan is forgiven every year, so if you stay in the house for 20 years, the entire loan is forgiven,” explained Olson. “But if you sell after five years or 10 years, part of the loan is forgiven, again, which helps build that generational wealth.”
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There are other homeownership programs throughout the state that specifically help with down payment assistance; from Minnesota Housing Finance Agency to non-profit organizations like Project for the pride of living and Build Wealth Minnesota who is working to fund 9,000 new owners of color.
“There’s so much money here and there’s so much more money on the way,” said longtime realtor Denise Mazone, who is also president of the Minneapolis Area Association of Realtors.
Mazone says it’s up to real estate agents to know what’s available and mortgage companies to be more willing to accept aid dollars and gave that advice to people looking to buy a home.
“Ask the question, do you know how to get payment assistant dollars and if they say no, then you might want to consider interviewing more realtors,” Mazone said.
She’s also a member of NAREB and runs free classes for first-time buyers once a month, hoping education can also help reduce inequality – something she says has only gotten worse, especially among black owners.
“In the 1950s, they owned more houses than they do now,” Mazone said. “If we can close that gap one house at a time, that’s what we’re working on.”
Mazone said homeownership programs can sometimes be problematic and people need to be wary of many factors, including taxes, the price of the house and the fact that their purchasing power is diminishing.
She says what matters are real estate agents and other organizations looking to find someone a truly affordable home.
“We have to be very intentional and very diligent in using the things we have and getting people connected to them,” Mazone said. “If we can’t make that connection, they’re going to take those dollars and move them somewhere else.”
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