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How To Increase Black Homeownership in the U.S.

A mortgage industry veteran offers her take on how to increase black homeownership in the U.S.

February 1, 2023
February 1, 2023
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Understanding how to increase Black homeownership in the U.S. begins with having the proper framework.

The Black homeownership rate in 2022 was roughly 45% compared to nearly 75% among white homeowners, according to Pew Charitable Trusts. There are many reasons for this gap, including modern-day redlining and credit gaps between Black and white homebuyers.

Closing the homeownership gap will require a multi-pronged approach. But as someone who has spent decades in the mortgage industry, here are three key factors I believe will move the needle and empower Black homebuyers.

3 Ideas for How to Increase Black Homeownership

Educate Black homebuyers early and often

There is a long-standing legacy of homeownership in my family. My great-great-great grandfather, who was born enslaved, owned 50 acres of land in Hillsborough, North Carolina. When he died in 1902 he left each of his eight children their own home. For five generations, my relatives and I have been proud homeowners and we have seen the transformative power of homeownership in our lives.

But many in our Black community have had a much different experience. It’s not uncommon for us to have relatives who have never owned a home. And if homeownership is not part of your familial legacy, and it has never been modeled for you, it may seem unattainable. Worse, it may not even be on your radar.

Unfortunately, this lack of experience with homeownership only exacerbates the wealth gap because home equity is vital to wealth creation in the U.S. That’s why it is critically important that Black leaders, real estate professionals and other people of influence share the importance of homeownership and bring our community into that conversation.

Pastors, priests, bishops and other local leaders have started sharing the benefits of buying a home with their congregations. We have also begun to see an increase in Black real estate professionals and influencers embracing homeownership advocacy on social platforms such as TikTok.

Lenders must diversify their workforces and outreach

Financial trauma runs deep within the Black community. Historically, our community has struggled to trust financial institutions such as banks and mortgage lenders – and with good reason. This is why we represent the largest percentage of underbanked and unbanked people in the U.S, another key factor in why our homeownership rates are so low.

To earn our trust, mortgage lenders must show that they understand our community’s unique needs and concerns. Hiring Black, Brown, and mixed-race loan officers is a great start. Diverse loan officers may be better equipped to speak to the needs of BIPOC homebuyers and to their experiences, goals and backgrounds.

Another step forward is ensuring that their websites and apps show images of diverse homebuyers and families. If homebuyers don’t see themselves reflected in a lender’s output, why should they expect that company to be able to serve them effectively and empathetically?

Lenders must be active participants in our communities, engaging with us in a meaningful, grassroots way. Hosting picnics, barbecues and other social events gives our community members a chance to get to know these companies and become familiar with the loan officers who may be helping them purchase their homes. These events are also an opportunity for lenders to provide education on credit building, mortgage qualifications and homebuying generally.

Lenders have a real opportunity to build a bridge to homeownership for many Black Americans.

Down payment assistance can make the difference

The down payment is the number one roadblock that prevents most would-be homeowners from buying a home. Down payment assistance* (DPA) is one of the most powerful tools homebuyers have toward purchasing a property. DPA, which often takes the form of a grant, repayable, or forgivable second loan on the home, can make all the difference for prospective homebuyers who can afford a monthly mortgage payment but struggle to save the money needed for their up-front costs.

The down payment challenge is a particular burden for Black homebuyers who come from families that don’t have a history of homeownership. Because homeownership is so closely tied to generational wealth in the U.S., a person who will be the first in their family to own a home is less likely to have family assistance toward their down payment and closing costs.

With home prices having risen substantially in the past two years, saving for a down payment of even 3% or 3.5% can be difficult. Add closing costs of 2-6% of the loan amount, and the savings needed to buy a home can seem insurmountable.

Down payment assistance changes the landscape by covering all or a portion of these costs for eligible homebuyers.

Related reading: Down Payment Assistance: 50-State Guide to Homebuying Programs (With Map)

Where to find down payment assistance

Down payment assistance programs exist at the city, county and state levels. Homebuyers can find a list of programs in their area through the U.S. Department of Housing and Urban Affairs (HUD) website. But the search shouldn’t stop there. The HUD list is not exhaustive, and many additional programs are available.

The company I work for, Arrive Home, provides down payment assistance in partnership with other social enterprises. Our goal is to connect underserved communities with the resources they need to access the benefits of homeownership.

Companies such as Down Payment Resource also facilitate these connections, directing both first-time and repeat homebuyers to the more than 2,000 DPA programs throughout the U.S. Some employers have started offering down payment assistance as well as a benefit for their workers.

Real estate agents and loan officers are often well-versed in DPA offerings as well, and they can help homebuyers identify programs for which they might qualify.

The bottom line is if you want to purchase a home, there is help out there. Saving for a down payment isn’t the only hurdle Black homebuyers face, but it is a significant one. Knowing that these programs exist – and where to find them – is a crucial step in closing the homeownership gap.

Learn more: How to Save a Down Payment for a House

The bottom line on how to increase Black homeownership

Education is essential to increasing Black homeownership in the U.S. Community leaders, lenders and influencers all have a role to play in closing the homeownership gap.

But there’s much that potential homebuyers can do as well. By working with companies that understand their experiences and seeking out down payment assistance and other homebuying resources, Black homebuyers can empower themselves to create new legacies and begin building wealth for generations to come.


*Eligibility subject to program stipulations, qualifying factors, applicable income and debt-to-income (DTI) restrictions, and property limits.

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