NeighborWorks Home Partners celebrates 40 years with a focus on first time home buyers and families of color – Twin Cities
Kali Terry comes from a long line of tenants. Shortly before the pandemic, Terry broke the mold twice, if not three times, by purchasing a duplex on St. Anthony Avenue and Victoria Street in the historically Black Rondo neighborhood of St. Paul. The former carpenter unionist, corporate seller and food truck contractor converted a low-cost rental attic on the third floor, positioning himself not only as an owner-occupant, but also a responsible owner of a triplex.
“It ticked two boxes – a first generational buyer in my family, and the first time I became a homeowner too,” said Terry, who grew up in south Minneapolis but is familiar with the area going to. Rondo Days. at the top. According to him, Saint-Paul – and the Summit-University area in general – are booming after losing population in the 60s and 70s and regaining it very gradually over the last 40 years.
Homeownership has “changed my whole trajectory,” said Terry, who rents his two units at below-market rates to tenants with bad credit or rental histories. “I was paying more rent than I paid for my entire mortgage on a multi-family property. And from an equity perspective, having this wealth-creating asset basically allows me to provide housing and build wealth for others.
At NeighborWorks Home Partners on Dale Street, the organizers of the nonprofit’s literacy classes and first-time home buying programs point to Terry as a success story – an example of how, even in times recession and competitive housing market, new buyers can take advantage of subsidies and know-how. targeted to their situation to find affordable offers.
Terry was already in the process of closing the purchase of a duplex when a NeighborWorks housing advisor informed him of the non-profit organization’s Fix-It program, through which he was able to secure a low loan. interest rate to renovate the attic into living space.
The Fix-It loan financed 80 percent of the renovation. Without that kind of support, “I would never have been able to fund an entire attic conversion,” he said.
RENTS GREATER THAN MORTGAGE PAYMENTS
Sometimes the biggest obstacle to buying a home isn’t financial.
Renters often lack education on first-time home buying programs that can help pay down payment and closing costs, or they are unsure if they can afford renovations.
Jason Peterson, CEO of NeighborWorks Home Partners, said the Twin Cities are a unique housing market where rents are often higher than monthly mortgage payments for comparable properties. Yet many renters – especially people of color – still feel left out of the opportunity to own a home.
NeighborWorks Home Partners is celebrating its 40th anniversary this year, but the opportunity is bittersweet. Housing advocates say they are addressing the race-based housing issues that distinguish the Twin Cities, and not in a good way, even during what many see as a national housing crisis. And it’s not just about rising home prices and low inventory, although those trends haven’t helped matters.
COLORED COMMUNITIES HARDLY AFFECTED BY THE 2008 RECESSION
Overall, between 2000 and 2018, white ownership in the Twin Cities region remained relatively stable at around 70%, according to the Urban Institute. Black ownership has declined over this period, from 31% in 2000 to 21% in 2018. This equates to a 50 point gap between blacks and whites and a 30 point difference between Latinos and whites. .
Peterson said communities of color were hit particularly hard by the 2008 recession, including adjustable rate mortgages and other unscrupulous lending practices that cost many black and brown people their homes, and they never fully recovered.
“The disparities in homeownership across the country are glaring, but in the Twin Cities they are dire,” Peterson said. “We are one of the metropolitan areas in the country where, in general, it is cheaper to buy a house than to rent. It is still the best way to create wealth in our country. The net wealth of the average homeowner in the United States is $ 254,900. The average renter’s net worth is $ 6,270.
He added: “The recovery from the Great Recession (of 2008) has been primarily based on homeownership. The repossession is still really helping people who own a home. This is where the appreciation has been.
Peterson delivered a more useful message over the airwaves through segments on KMOJ, in the pages of InSight News, and wherever the BIPOC audience can be found. There are still opportunities for low-income tenants to enter the housing market, provided they are open to education and, in some cases, to repairing their credit. NeighborWorks partners with the Minnesota Homeownership Center to provide personalized homeownership advice. This can include extracting savings and credit reports, determining how best to improve credit scores, and an overall determination if homeownership is right for you.
“We sit down and look at the individual situation of each family,” he said. “For people who are not ready to buy, we say it’s great. If you’re interested, let’s put a plan on it. It may take you a year. It may take you five years. For people who are willing to borrow, we take a look at the different products. Our goal is that two out of three people we help buy a home belong to a BIPOC community.
For mortgage counseling, he encourages tenants to make sure they are working with a HUD-approved counseling agency.
“The two biggest barriers to homeownership among BIPOC families are education and knowledge, as well as help with down payments,” said Peterson. “There are still a lot of myths that you have to cut 20% and have a credit score of 700. We have a program that we called ‘Homebuyer Basics’, and we’re bringing the show to the road. We work in partnership with different organizations so that people can get information specific to the language.
Among those products is NeighborhoodLIFT, a $ 15,000 fundraising collaboration between Wells Fargo and NeighborWorks America that received a major boost in Minneapolis and St. Paul in February. Wells Fargo contributed $ 7 million and the Treasury Department contributed $ 4 million in federal relief funds. Thanks to this program, the association is currently helping around sixty families to buy a house.
“We are able to help people put together competitive deals,” said Peterson. “These are first-generation homebuyers who thought they couldn’t buy a home.”