OWN IT: Building Black Wealth One Down Payment at a Time
May 18, 2022
Big smiles and happy tears: Both were in abundance on a recent afternoon when Kelsey Glavee became the first-ever recipient of a $15,000 grant from the new program called OWN IT: Building Black Wealth.
Kelsey, a speech-language pathologist at One City Schools, will use the grant on a down payment for her first home. And Kelsey is just the beginning: OWN IT will be giving six more Madison-area families their $15,000 grants during 2022.
It’s quite an accomplishment for a pilot program that formed just two years ago. OWN IT: Building Black Wealth was created by a group of Madison-area professionals who were concerned about the increasing gap in generational wealth and homeownership between Black and white families in the greater Madison area.
Holistic Approach to Home Buying
The gap has become even more distinct now that more Americans own a home than in any year following the Great Recession, according to a recent CNN report. The U.S. homeownership rate climbed to 66 percent in 2020.
But Black homeownership is at 43 percent, even lower than it was a decade ago. That’s nearly 30 percentage points behind the White homeownership rate of 72 percent. It also falls behind Hispanic and Asian homeownership percentages, at more than 50% and 60% respectively.
OWN IT aims to address this devastating gap for Black families in Madison through a holistic approach to building generational wealth through homeownership. Currently open to all One City Schools employees and families, OWN IT offers free personal finance courses that cover everything from understanding credit to home maintenance. After completing the training, families are eligible for the $15,000 grant.
OWN IT believes that supporting first-time home buyers goes beyond simply helping individual families. More Black homeownership results in an increase in generational wealth and more people who are invested in their communities.
Kelsey Glavee, for example, is one of the few Black speech and language pathologists in Wisconsin. By receiving both financial support and educational insights, Kelsey and others like her are more likely to stay in Madison, contributing their gifts to the community and educating the next generation about building wealth.
This approach to strengthening communities through multi-generational empowerment was particularly important to Forward Community Investments(FCI), which serves as the fiscal sponsor for the OWN IT project.
“OWN IT is filling a critical gap by providing free training in topics such as budgeting and demystifying the home buying process,” said FCI President and CEO Ryan Zerwer. “Plus, the program is tapping into the expertise of an impressive network of local real estate and financial industry professionals.”
One key component of the OWN IT program is its acknowledgement of systemic racism—both historic and current day—that is embedded within housing and financial systems. By educating participating families about these structural barriers, OWN IT aims to expose and begin dismantling those inequitable policies and practices.
Perhaps even more important, the program’s down payment grants don’t include restrictions such as geographic borders or income limits. This is essential because access to money is one of the biggest barriers to homeownership, which results in a vicious cycle where families don’t have enough wealth to generate more wealth through homeownership.
This is particularly true in today’s real estate frenzy, where some potential buyers are able to offer 20 percent down or more. Sara Alvarado, co-owner of Alvardo Real Estate Group, noted in a 2021 article about OWN IT that many Black buyers who use federal loans or another downpayment program can only counter with a much smaller (and less attractive) offer.
“The way financing contingencies are presented to sellers as good or bad reflects upon generational wealth,” said Alvardo, who serves on the advisory team for OWN IT. “Looking at the wealth gap and understanding where cash comes, you can imagine the demographic of the buyers in the position to write cash offers.”
Supporting OWN IT
Families who receive OWN IT grants have nine months to explore the real estate market, negotiate a sale price, and close on their home, which must be an owner-occupied single-family property or duplex.
The down payment grants are funded by financial contributions from community members, the real estate and financing industries, and other corporations. OWN IT is encouraging potential donors to consider opportunities to imbed contributions into their regular business practices.
For example, a real estate company could commit to contributing a percentage of quarterly earnings or commission checks. Community members could engage their neighborhood associations in conversations around neighborhood segregation and the wealth gap, and explore ways to challenge those systems that continue to perpetuate racism.
About Forward Community Investments
FCI is an investor, connector, and advisor for organizations and initiatives that reduce social, racial, and economic disparities in Wisconsin communities. We envision an equitable and inclusive Wisconsin built on cooperative social action. In its capacity as a statewide community development financial institution (CDFI), FCI infuses capital into economically underserved communities and neighborhoods. www.forwardci.org; https://www.facebook.com/forwardcommunityinvestments