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 past racism in America’s social systems and policies have left us with a large and stubborn racial homeownership gap.
In Minnesota, 77.5 percent of White households own their own home, compared to 51.1 percent of households of color. Just 30.5 percent of Black households own their own home. 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, and helping to make the wealth-building benefits of homeownership available and accessible to all who wish to pursue it.
Founded in 1993, the Minnesota Homeownership Center serves as a U.S. Department of 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 and multilingual Homebuyer Advisors and Educators embedded in community-based organizations across the state. In the Twin Cities, providers include agencies such as African Development Center, CAPI USA, Comunidades Latinas Unidas En Servicio (CLUES), the International Institute of Minnesota, Neighborhood Development Alliance, NeighborWorks Home Partners and PRG. In addition to English, services are delivered in Spanish, Somali, Hmong, Amharic, Arabic, Oromo and Swahili. 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 ownership, namely lower income households and communities of color. We’re doing this by debunking the myths around credit, income and down payment that keep people from considering ownership for themselves. And we’re partnering with likeminded organizations working in the equitable homeownership space, including the National Association of Real Estate Brokers, the National Association of Hispanic Real Estate Professionals, the Asian Real Estate Association of America and Build Wealth Minnesota’s 9000 Equities initiative.
The Center also looks for new barriers that are actively keeping more and more people from considering homeownership for themselves. Two very real and increasingly relevant barriers we’ve identified over the last decade include the prohibition on paying interest that’s an important part of certain religions, and the need to qualify for a U.S. social security number in order to obtain a traditional mortgage.
With the help of various community partners, we’ve created informational guides aimed at overcoming these obstacles. Our Guide to Non-Interest-Bearing Financing in Minnesota explains the practical need for such products, the financing models approved by religious authorities as successfully avoiding interest payments, and the providers of these products active in the Minnesota marketplace. Our Guide to Individual Taxpayer Identification Number (ITIN) Mortgages in Minnesota outlines the various reasons one might not qualify for a social security number, the lenders offering ITIN products in our state and the basic requirements for each vendor’s products. We make these documents available for free to consumers and Realtors® across the state, and we offer continuing education credits for Realtors® on the specifics of these topics.
Over the next few weeks, 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, 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 even 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.
Safe, stable and affordable housing matters. Building wealth safely over time matters. Playing a part in the continued growth and evolution of our shared community matters. In other words, Minnesota Homeownership Matters.
For more information on the Minnesota Homeownership Center and its advisor and education services, go to www.HOCMN.org.