Address Homeownership Barriers and Reduce Disparities

Homeownership is the primary way that most people in Minnesota build wealth. However, many factors create barriers to successful homeownership, including poor (or no) credit, limited savings and income, existing debt, limited knowledge and trust of the mortgage industry, discrimination and limited access to financing. Minnesota has the fourth highest homeownership rate in the country. It also has significant and persistent disparities in homeownership rates between white/non-Latino households and Indigenous, Black and people of color. While we have made significant progress in increasing financing to Indigenous, Black and people of color, the entire industry needs to do more to reduce disparities. With over 61,000 renter households in Minnesota between the ages of 25 and 44 that are Indigenous, Black and people of color and potentially ready to buy, there are opportunities for significant improvement.

Key Metrics

Annual number of home mortgages purchased by Minnesota Housing (coming soon)

Minnesota Housing’s annual lending to Indigenous, Black and people of color (coming soon)

Homeownership rates by race/ethnicity and income level (coming soon)

Actions

Model What it Will Take to Significantly Reduce Homeownership Disparities

Identify how many additional Indigenous, Black and people of color would need to become successful homeowners to eliminate homeownership disparities
Set annual goals for Minnesota Housing
Identify program enhancements that will advance the goal of eliminating homeownership disparities
Advocate for all homeownership advisors, real estate agents and lenders to be a part of the solution to reduce homeownership disparities

Improve Marketing and Outreach

Continue to refine and enhance the work of the Agency’s Business Development (outreach) team
Pursue more direct-to-consumer marketing, social media and events to dispel myths; increase awareness of our programs and show that homeownership is possible
Create specific marketing strategies to reach historically excluded households, including Indigenous, Black and people of color who:
- May be ready to buy and want to learn more about the process and the available products and services
- May not yet be ready to buy and are interested in financial coaching and becoming homeownership-ready
Tailor marketing messages for both established and recent immigrant populations
Increase awareness of the Agency’s programs among real estate agents, lenders, homeownership advisors and trusted community-based partners
Engage more homeownership advisors, real estate agents, lenders, industry professionals and trusted community-based partners to serve more Indigenous, Black and people of color
Get input from communities on where and how to advertise and explore additional strategies, including reaching out to social services agencies and advertising in libraries, local businesses and other community venues.

Provide Comprehensive Homebuyer and Post-Purchase Support

Collaborate with partners to bring training and education related to financial literacy, credit building, renting and basics of homeownership to a variety of audiences
Work with the Homeownership Center and its network of homeownership advisors to provide education, counseling and financial coaching that meets the needs of homebuyers and homeowners, particularly Indigenous, Black and people of color
Expand our Homeownership Capacity program, which provides intensive and longer-term financial coaching that effectively reaches and serves Indigenous, Black and people of color
Identify strategies to support people through post-purchase offerings

Increase the Inventory of Affordable Homes for Sale

Support the creation of more affordable options, including manufactured or modular housing, townhomes, condominiums, cooperatives, etc.
Advocate for more funding to develop affordable owner-occupied housing
Work with partners on strategies to reduce the cost of housing development
Support strategies to increase the number and racial, ethnic and gender diversity of contractors and people working in the building trades

Provide Affordable and Accessible Financing

Effectively deploy the recently expanded state investment in affordable homeownership, including downpayment assistance for first-generation homebuyers, to maximize the impact on homeownership disparities
Build off recent successes, including 65% of our Deferred Payment Plus Loans (enhanced downpayment assistance) going to Indigenous, Black and households of color
Explore options for creating and/or supporting Special Purpose Credit Programs that extend credit to people who have been historically excluded and would otherwise be denied
Refine our homebuyer and home-improvement programs each year to match market conditions and borrower needs, particularly for Indigenous, Black and people of color
Expand the availability of purchase-rehabilitation loans
Expand our lender network to support more lending throughout the state, particularly for Indigenous, Black and people of color

Lead the Overall Mortgage Industry

Share with the mortgage industry strategies and programs that successfully serve Indigenous, Black and people of color
Provide leadership for the Homeownership Opportunity Alliance, an industry-wide coalition, to increase homeownership among Indigenous, Black and people of color

Expand the strategic plan table of contents to navigate the plan's strategic objectives and their dashboard metrics.

Contact

John Patterson, Director of Planning, Research and Evaluation

Director of Planning, Research and Evaluation

john.patterson@state.mn.us

651.296.0763