Watch now: Madison school-based grant program seeks to increase homeownership among people of color | Business News

Amid a cluster of boxes and tools strewn about her freshly bought house, Madison resident Kelsey Glavee bursts into laughter as she changes the lock of her front door, her father sprays weeds outside and her sister scrubs the kitchen.

Just hours earlier, Glavee started the process of moving into the South Side home she now owns. June 10 was a day Glavee thought might not come for some time without the support of her loved ones — and a program that helps the staff and families of charter school One City Schools, primarily people of color, purchase houses.

Had it not been for the $15,000 she received through the Own It: Building Black Wealth initiative, Glavee estimated it would have been at least four years before she saved enough money for a down payment.

“It hasn’t felt real,” said Glavee, the first Own It grant recipient. The program was announced last year and is the only one of its kind in Madison. It brings together a network of real estate and finance professionals to educate applicants about homebuying, in addition to providing grants.

Glavee was not alone in the challenges she faced. Several prospective homeowners of color interviewed by the Wisconsin State Journal over the past few months said saving money for a down payment on a house would have been a struggle without the program’s support.

More than 50 years after the Fair Housing Act supposedly ended housing discrimination, people of color continue to face disparities in homeownership.

An analysis last year by nonprofit data journalism outlet The Markup found lenders are more likely to deny people of color home loans compared with white applicants. In Madison, Hispanic people are 2.6 times more likely to be denied home loans than their white counterparts, according to the analysis.

A recent Wisconsin Policy Forum report also highlights a major gap in the homeownership rates of people of color compared with their white counterparts — both in Madison and across the state.

Using data from the U.S. Census Bureau compiled in 2019, the Forum reported 52.7% of white adults in Madison own their homes. Only 30% of Hispanic and 15.3% of Black adults own their homes. The situation is similar for large metropolitan areas like Milwaukee, Kenosha, Racine and Green Bay.

Across Wisconsin, 72% of white adults own their homes, while 40.9% of Hispanic and 25.5% of Black adults own their homes.

Those gaps were exacerbated in part by the foreclosure crisis more than a decade ago, the report states. The Great Recession “deflated homeownership, homebuilding and homebuying activity for several subsequent years.” The foreclosure crisis itself was fueled “in part by subprime and predatory lending.”

Gaps in household income are another major factor contributing to Wisconsin’s large and widening racial disparities in homeownership, the report said. In 2019, the median income of non-Hispanic white households in Wisconsin was $64,927, compared with $46,266 for Hispanic households and $31,351 for Black households.

The wealth and housing disparities continue even decades after the end of institutionally racist policies like redlining, in which neighborhoods with largely minority populations were deemed ineligible for federal housing programs.

Increasing mortgage rates are now adding fuel to the fire.

Mortgage rates saw their largest one-week increase since 1987 within the last few weeks amid an interest rate hike by the U.S. Federal Reserve, according to numbers from Freddie Mac, a government-sponsored market financing company based in Virginia.

The 30-year and fixed-rate mortgage recently jumped to 5.78%, the highest the rate has been in 14 years.

Raghiatou Bah, an immigrant from West Africa who moved to the U.S. in 2004 and Madison in 2018, wanted to buy a home for so long because of one amenity in particular: an in-unit washer and dryer.

Bah, a single mother of two children who attend One City as well as a nursing student with a job as a nursing assistant, looked at 20 homes with no luck before finally closing on a house, she said. She credits the Own It courses and a $15,000 grant with making the difference.

“Every time I put in offers, we got overbid,” Bah said, adding that she has looked to other organizations in the area to help her find a house. But because she’s not yet a naturalized U.S. citizen, Own It was her only option because it comes with few strings attached.

One City Schools families must complete two courses and not have owned a home for three years to qualify for a grant.

Verona resident Bruce Moore, whose grandson attends One City, is another school family member hoping to benefit from the program.

At 20, Moore lost his house after experiencing mental health struggles related to his job at the time. Now 60, Moore said he wants to try homeownership again — this time by buying a duplex with which he can build generational wealth for his extended family.

Thanks to a recent raise at his job providing nursing care for veterans, Moore has been able to save up for a potential down payment on a house, but said the additional $15,000 would provide a welcome boost. He plans to take Own It’s budgeting course, although work obligations have delayed that for now.

Tiffany Malone, co-creator of Own It and a real estate agent in the Madison area, said seven families have received $15,000 grants so far.

Five have closed on homes, and two are actively searching for a house. Money, much of which has come from donations, became available this year for applicants.

But forming down payment assistance programs can be difficult, she said, especially for public entities because of anti-discrimination laws that make it harder to target homeowners of color. Own It can exist because it is privately funded, Malone said, adding as a Black woman herself she cried when she found out Glavee was closing on her home.

The city of Madison is also looking at ways to address racial homeownership disparities, said community development director James O’Keefe, adding that “we are working with philanthropic organizations to make (city) programs” like down payment assistance more effective.

One possible solution is to work with a nonprofit to purchase homes, then reselling them to prospective buyers, he said.

At the state level, the Wisconsin Housing and Economic Development Authority, which offers funding to help with down payments, is examining additional ways to foster racial equity in the housing industry.

WHEDA’s African American and Latino Homeownership Initiative is using data to better understand the systemic barriers people of color face in homebuying and wealth acquisition, said CEO Elmer Moore Jr.

“This thing about leaving that future income and that legacy for my children is so they don’t have to work as hard to own a home,” Bruce Moore said. “When we score, they score, too.”