Advancing Black Homeownership Program Sees Impactful Results

Bridgette was on cloud nine when she closed on her home in summer 2024. As a participant of Twin Cities Habitat’s Advancing Black Homeownership Program, her days of worrying about rising rent were over. She picked paint colors intentionally, put everything in its place, and created a calm space. The best part? Her grandson now gets his own room when he visits. Bridgette’s story is just one example of how our new Advancing Black Homeownership is turning more homeownership dreams into reality.

What is the Advancing Black Homeownership Program?

The Advancing Black Homeownership Program is an innovative initiative aimed at removing barriers to homeownership for Foundational Black Americans—those who are descendants of slavery in the U.S. and have been the primary targets of racial discrimination in housing for generations. Through years of learning about the disparities in wealth and homeownership and analyzing our own homeownership results, we recognized we needed to make our program work better for this group of people.

While we don't see historical housing barriers like redlining and racial covenants anymore, years of these racist lending practices have left deep scars. Now, Black homebuyers are disproportionately affected by narrow lending criteria, high debt-to-income ratios, high down payment required, and financial literacy. In Minnesota, the racial homeownership gap is particularly stark, with Black households far less likely to own homes compared to White households.

The Advancing Black Homeownership Program was created to address these issues in a focused manner.

Key Program Elements

A number of specific elements make the Advancing Black Homeownership Program effective:

1. Eligibility and Focus: Participants must identify as Black or African American, be U.S.-born, and meet certain financial criteria. This ensures we’re serving those most affected by systemic inequities.

2. Human-Centered Design: We lead with empathy and emphasize respect for all program participants. Our advisors do everything they can do to make people feel valued throughout the process.

3. Financial Assistance: Participants can receive up to $50,000 for down payment assistance, savings contributions, and other costs related to homeownership. This funding directly addresses affordability gaps that might otherwise prevent someone from buying a home.

4. Flexible Lending Criteria: Because traditional credit requirements often excluded Black households, the program utilizes a Special Purpose Credit Program (SPCP) that allows more flexibility. It accepts credit scores as low as 580, allows for alternative credit assessments, and offers lighter DTI ratio limits.

5. Education and Coaching: Financial literacy is a cornerstone of the Advancing Black Homeownership Program. Participants receive training in budgeting, credit management, and homeownership readiness, giving them the tools they need for long-term success.

6. Post-Purchase Support: After purchasing a home, participants benefit from ongoing support from Habitat’s Homeowner Engagement team, including regular check-ins, educational opportunities, and community building events with Habitat homeowners.

Angela joined the Advancing Black Homeownership Program after years of struggling and experiencing what many Black first-time homebuyers face: She applied for a mortgage with a big bank, but her approved loan amount was too low and the interest rate was too high. To make matters worse, there was no education or explanation about what she could do to get herself in a better position.

Years went by, and Angela kept her dream of homeownership alive. She was accepted into the program in 2023, and the unique program elements outlined above were exactly what she needed to get her over the finish line.

“I learned that I was not the only one who had these fears! I wasn’t the only one that had the barriers—I didn’t even really understand that there are barriers to this whole process.” Angela says. “I am just truly so grateful to Habitat for allowing me to go through the process and having them guide me to achieve that goal. It took me a while to get to the mountaintop, but I finally did get there.”

Read Angela’s homeownership story here.

Special Credit Purpose Program

One of the unique aspects of the Advancing Black Homeownership is its use of a lending program called a Special Purpose Credit Program (SPCP). The SPCP allows us to provide more flexible lending criteria, more financial assistance, and tailored homebuyer education and financial coaching for Foundational Black Americans.

It’s important to note that an SPCP is nothing new; these programs were first established under the Equal Credit Opportunity Act (ECOA) of 1974. While the ECOA prohibits lending discrimination based on race, gender, or other protected categories, it allows for intentional measures to benefit disadvantaged groups that have been unfairly and excluded from access to credit. An SPCP is a way to level the playing field and address the barriers and practices that created huge disparities in the first place.

Participants of the summer 2024 Special Purpose Credit Program.

Our SPCP runs year-round with groups of 12-30 participants at a time engaging in a series of homeownership and financial education classes. Participants attend classes together, allowing them to connect with and build rapport with each other and with Habitat staff. Once a group completes their classes, participants and their families attend a celebration before moving on to the next step in their homebuying journey.

Bridgette was impressed with the tools Twin Cities Habitat was able to provide through the Advancing Black Homeownership Program. She met other future homeowners in all stages of their journeys, and Habitat offered a calm environment to learn and ask questions about the process. “Everything was easy, stress-free, and streamlined," Bridgette describes. "There aren't many things in my life that have gone that smoothly. Work had to be done, but staff made the process understandable.” Read Bridgette’s homeownership story here.

Positive Program Results

The Advancing Black Homeownership Program first launched in the fall of 2022, and the positive results are a testament to its effectiveness. Speaking strictly numbers, the program has achieved significant milestones:

1. Increased Participation and Success Rates:

   • The program has reached 119 participants, with 59 successfully closing on homes!

   • The success rate for Foundational Black Households within Twin Cities Habitat’s program has improved dramatically, from 11% before the Advancing Black Homeownership Program to 47% today.

2. High Engagement:

   • With a 91% engagement rate, the program has kept participants actively involved and motivated.

3. Financial Impact:

   • Over $1.48 million has been distributed to support participants.

4. Positive Participant Feedback:

   • Participants have noted the program’s flexibility and support. After being in the program, they feel more confident in managing their finances and achieving their homeownership goals.

Setting a Future Example

Twin Cities Habitat’s Advancing Black Homeownership Program is more than financial assistance or a credit program. It’s part of our comprehensive Build Forward Together strategic plan to expand homeownership and advance racial equity in the Twin Cities.

As Twin Cities Habitat continues to refine and expand its program, we are serving as a model for other organizations looking to address housing inequities. Through thoughtful design, targeted assistance, and a commitment to equity, approaches like Advancing Black Homeownership are transforming lives and communities for the better.

Who Can Join the Advancing Black Homeownership Program?

The Advancing Black Homeownership Program is open to Foundational Black Households in the Twin Cities metro area who are participants in Twin Cities Habitat’s Homeownership Program. Participants must:

• Identify as U.S.-born Black individuals descended from enslaved ancestors.

• Have a minimum credit score of 580 or demonstrate alternative creditworthiness.

• Meet certain savings and debt requirements.

• Show continuous employment for at least two years, including six months at their current job.

These criteria, and more, helps us keep the program focused on those who can benefit most while maintaining a sustainable approach to lending. To see if you are eligible for Twin Cities Habitat's programs, start by filling out our Eligibility Form.