Photo credit: Twin Cities Habitat for Humanity
The Advancing Black Homeownership program was developed in partnership with aspiring and current homeowners and industry professionals in 2023. Supported by Twin Cities Habitat for Humanity and the Minnesota Homeownership Center, it helps mortgage-ready Foundational Black renters build generational wealth through homeownership.
The program currently provides $50,000 in down payment assistance and entry cost assistance to eligible homebuyers in the seven-county Twin Cities metropolitan area and is administered through partnerships with Build Wealth Minnesota, First Independence Bank, and NeighborWorks Home Partners.
Efforts like Advancing Black Homeownership, and similar programs, are critical for removing barriers for more people in our region to become homeowners, particularly families who have been most historically impacted by redlining, racial covenants, and other discriminatory practices.
The GroundBreak Coalition launched two years ago to expand wealth-building opportunities and close racial wealth gaps by changing how and where resources flow, with a plan to unlock $5.3 billion in capital over the next decade. By working in close collaboration with nonprofit partners, foundations, financial institutions, corporations, government, and private individuals, we seek to make capital readily available for people aspiring to build wealth through homeownership, entrepreneurship, commercial development, and rental housing.
In 2024, the GroundBreak Coalition was proud to support Advancing Black Homeownership with an initial investment of $1.5 million in capital for the program, which expects to leverage support from multiple partners to provide down payment assistance for 110 new Black homeowners this year.
At the same time, GroundBreak is working to facilitate a financial system that can scale support for initiatives like Advancing Black Homeownership, resulting in thousands of families becoming new homeowners.
“GroundBreak recognizes that our region has incredible wealth and assets, and if we get creative and work together, we can exponentially grow our impact,” said Marcus Owens, the project lead on the coalition’s homeownership work. “Coalition partners are collaborating to build out a regional plan to unlock down payment assistance for 1,000 new homeowners over the next three years, and 11,000 families over the decade. The key is to bring resources to the table in new ways, at a level high enough to shrink racial homeownership gaps, in deep partnership with community-based organizations.”
Here’s our plan to get there:
1. Catalyze a system to maximize flexible resources and unlock private-market capital.
Part of GroundBreak’s innovation is a systematic approach to offering widely-available down payment assistance starting in 2025 through a combination of grants and interest-free loans provided by philanthropic, public, and private investors. Because the no-interest loan funds are repayable, we can “recycle” these dollars in the system to serve more and more families. GroundBreak is working with the Advancing Black Homeownership program to define the terms of a partially repayable, regional down payment assistance tool. By doing so, we seek to open the door for thousands of aspiring homeowners by shifting the onus of home financing from potential homebuyers to institutions that hold capital like banks, foundations, and corporations. We anticipate that the repayable loans will not have any interest charges or require monthly payments. Instead, they will be repaid when the property is sold or refinanced to take out cash from the equity.
In addition to ensuring more families have access to down payment assistance, GroundBreak is looking at other ways to make homeownership possible for people in our region. This includes GroundBreak-endorsed mortgages. The GroundBreak-endorsed mortgages offer more flexibility on terms including credit score assessments and inclusion of rental history within the credit assessment. As part of GroundBreak’s goal to expand wealth-building opportunities and shift the paradigm to welcome Black and BIPOC wealth-builders in Minnesota, four major financial institutions as well as Build Wealth Minnesota and Habitat Lending, Inc. offer what we view as GroundBreak-endorsed mortgages. The mainstream products are offered by Bell Bank, Bremer Bank, Huntington Bank, and U.S. Bank with the same or similar terms and aim to build trust, transparency, and consistency for homebuyers.
“We have an incredible network of nonprofits, CDFIs, and financial institutions in our region who are helping families buy a home,” Owens said. “If organizations have the flexible capital and capacity they need, we can make homeownership tools widely available for Black families and keep expanding opportunities across the board, in MSP and beyond.”
2. Center the needs of aspiring homeowners.
GroundBreak’s homeownership strategy was developed by community work groups through a six-month design process. This spring, GroundBreak conducted interviews with current and aspiring Black homeowners to inform the design of the regional down payment assistance loans that will be made widely available through the financial system GroundBreak is catalyzing. The summary and report from these interviews is available here.
“Because we’re talking about a population that already doesn’t have a lot of trust with lending systems, this information needs to be digestible in lending terms. If it’s too confusing to me, I’m automatically suspicious.” – Homeowner in MSP
The terms of the regional down payment assistance loans are expected to be finalized before the end of the year and coalition partners, including nonprofits, CDFIs, and financial institutions, aim to make them available by early 2025. Coalition partners are committed to providing clear and transparent terms to ensure that all homebuyers fully understand the agreement before signing.
3. Collaborate and learn to shift systems and paradigms together.
Through collaboration with financial institutions and across sectors, GroundBreak intends to unlock unprecedented private market capital available for homeownership, entrepreneurship, and commercial development. It also involves examining practices within institutions to change narratives and practices to welcome and invest in community members who have historically been excluded from accessing mainstream capital.
No institution or sector can address historic injustices alone. But together, we have what it takes to change systems, rewrite our future, and create a region where every person – no matter their race or background – has the opportunity to achieve their dream. We all benefit from creating a more just and equitable region; we invite you to join us in building it together.
Learn More: GroundBreak is inviting private individuals and philanthropic institutions to join us and learn more about exclusive investment opportunities in this nation-leading strategy. To join an upcoming information session virtually or in-person, please contact: heidi@petersenconsultants.com. For more information about GroundBreak’s homeownership efforts, please contact: marcus@nawepartners.com. To learn more about the Advancing Black Homeownership program, visit Twin Cities Habitat for Humanity and the Minnesota Homeownership Center.
Footnotes:
[1] Eligible applicants are prospective homebuyers who self-identify as Foundational Black Americans, that is Black or African American Minnesotans who are descendants of enslaved Africans in the United States as data shows this group faces the steepest barriers to accessing a mortgage and the widest disparities in rates of homeownership. More information is available on the Twin Cities Habitat for Humanity website on the Advancing Black Homeownership Program.
[2] GroundBreak is starting its work with a focus on building Black wealth to address some of the region’s most persistent and historic racial wealth gaps, and plans to expand strategies to advance racial wealth equity gaps across the board.
