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Banks Step in to Shrink Black Homeownership Gap

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Demographics

Banks Step in to Shrink Black Homeownership Gap


October 30, 2020
Family of four moving into new home
Photo: fizkes

More banks are rolling out initiatives in order to bolster historically low homeownership rates for minorities. In Washington, DC, one firefighter and his family were able to purchase a home with the help from Chase Bank’s Chase Homebuyer Grant, according to the Washington Post. The family’s worry prior to purchasing was being able to have enough for a down payment. With the combination of a low mortgage rate and the grant, the family of four were able to settle into their new home. The grant is given out to those looking into purchasing a home in low- to moderate-income communities.

The program is one of several that banks have rolled out in an effort to bolster home-buying opportunities for African Americans, a group whose homeownership levels consistently lag behind other minority groups and White people. Housing advocates are viewing the programs as efforts to repair the damage banks caused over the years, including the subprime mortgage lending in the early 2000s — risky high-interest mortgages to Americans with scuffed or limited credit — that contributed to the Great Recession and the low Black homeownership rate.

The $2,500 grant, along with a mortgage rate of 3.25 percent through a Fannie Mae loan, helped make homeownership a reality for Freeman and his family. The married father of two young children purchased a four-bedroom home in the Hillcrest neighborhood of the District last spring for $400,000.

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