Expand Homeownership: Improve access to homeownership, especially among low-income residents, people of color, and indigenous people.

Homeownership has given generations of Minneapolitans the opportunity for housing stability and wealth development. However, these opportunities have not historically been available to all city residents. The combination of past racially restrictive housing policies and current lending practices have significantly reduced homeownership opportunities for people of color in particular African-Americans, Hispanics, Asian-Americans, and indigenous people. 

Although income is the largest factor in purchasing a home, even high-income households of color still face denied access to credit or are issued higher loan origination rates. In 2005, according to the Home Mortgage Disclosure Act loan data, very high-income African-Americans, Hispanic, and Asian applicants with incomes of more than $157,000 per year had denial rates higher than white applicants with incomes of less than $39,250 per year, with the greatest disparities among African-American applicants. In 2018, the Department of Justice settled its second-largest residential fair-lending case for $175 million, finding that the nation’s largest home mortgage lender participated in discriminatory lending practices. Borrowers of color were directed to sub-prime loans, charged higher fees, and received higher interest rates while white borrowers with the same credit risk profile were directed to less risky and more traditional mortgage products. When the housing market crashed in 2008, mostly subprime loan borrowers – largely households of color – faced foreclosure, lost the equity in their homes, and had to re-enter the rental housing market with damaged credit and limited assets.

Today in Minneapolis, there is a 36 percentage point gap between households of color that own their home versus white households. Over 59 percent of white non-Hispanic households own their home, while less than 21 percent of African-American and American Indian households own their home. Just under 25 percent of Hispanic households own their home.

The City can work to overcome the legacy of past barriers as well as current barriers in accessing homeownership for all people, specifically reducing racial disparities within homeownership. These actions are not just investments in filling the financial gap between the cost of a home and what buyer can afford; they are investments in people to help develop the skills and capacity to support homeownership.