To promote homeownership by people of color, the City of Minneapolis has launched a new initiative called Homeownership Opportunity Minneapolis (HOM).
The program will offer eligible prospective homebuyers a zero-interest loan of up to $7,500 to help pay their down payments and closing costs. The loan will be forgiven after the homeowner lives in the home for five years.
“We are hoping that this money will be able to cover the cost to bring them into [long-term, affordable] homeownership,” Cherie Shoquist, principal project coordinator, said.
A variety of non-profit organizations that work with people of color will receive funding to promote the program within their communities and to educate people about homeownership. HOM also offers resources, such as educational opportunities and counseling services, to help ready prospective homeowners for the responsibility of owning a home.
This program will be marketed through the existing “Own Your Future, Own Your Home” campaign to promote homeownership, run in collaboration between Minneapolis, Minnesota Housing and the Minnesota Homeownership Center (MNHOC).
Anyone who makes less than $99,500 and seeks to buy a house in Minneapolis is eligible for a loan through HOM. Those who make less than $60,280 will be eligible to receive $7,500 and those who make more than $60,280 may receive $5,000.
First-time buyers must attend a homebuyer education course before they can be considered.
Overall, the program has $865,000 to spend on helping homebuyers and $100,000 to spend on outreach and engagement. It is projected to serve about 125 families.
Ed Nelson, marketing and communications manager at MNHOC, explained that the need for the program stems from the large gap in homeownership rates between white people and people of color, a gap that was recently cited as one of the largest in the country.
According to the 2011–2013 American Community Survey from the U.S. Census Bureau, the rate of homeownership among white people in Minnesota is 76 percent, while that of people of color was almost half as much, at 40.6 percent. The rate also varies between different communities of color; the homeownership rate among African-American communities was 25.7 percent.
Homeownership has had a tendency to correlate with higher civic engagement and fewer health problems among homeowners, Nelson noted.
“Even after the crisis, even after everything we’ve been through during the last decade, home ownership still has value,” Nelson said. “We want to make sure that in the state of Minnesota, especially in this program in the City of Minneapolis, the communities of color are obtaining those advantages as well.”