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The Issue


Housing instability causes lifelong instability. Low and middle income families need equitable access to the resources that secure quality housing—whether rented or owned.

Homeownership remains the primary wealth-building tool for middle income families, especially for people of color, and one powerful way to reduce the racial wealth gap. But the gap keeps growing due to systemic inequities. Loans are harder and more expensive to get, causing homeownership to drop. Less wealth from ownership by blacks and Latinos means less overall wealth. In turn, less wealth passes to the next generation and less homeownership introduces instability into the community. And the damaging cycle continues.

Available housing choices increase or limit financial security. These choices must include a continuum of safe, affordable, timely, and sustainable ownership and rental opportunities. There are tools to make home buying easier and renting of quality affordable housing more beneficial. AFN members are investing in this continuum of opportunities to help households thrive on the asset-building road.

There’s no place like home and home ownership lays pathways to wealth

AFN’s Homeownership and the Racial Wealth Gap slides explore how grantmakers leverage home owning and wealth connections to make an impact.

Why It’s Important

AFN members collaborate to understand and promote strategies that ensure quality housing is accessible to families of all income levels.

Increased family stability

Increased community stability

More wealth passed between generations

More stability in classrooms

Increased saving and healthy credit behavior

Tax benefits for homeowners

Grantmaking Strategies

Not all forms of homeownership are equal. The recession of recent years has taken a particularly brutal toll on communities of color, in large part due to high rates of dangerous loans and refinancing issues, and in some cases, the undervaluing of houses on assessments. This has caused many to question homeownership as a wealth-building strategy. High rates of foreclosure and falling home equity have meant less stability for families, not more. Homeownership can provide stability, a path to the middle class, and is the largest asset most families will ever own, but only if buyers have access to reasonable loan terms, if they avoid the drumbeat to refinance, and if they can access safe programs to build credit scores and protect their investment.

The best homeownership programs include a suite of services: safe and affordable housing inventory, safe mortgage products, and preparation for home owning through education tied to the loan product and trusted advisors such as financial coach. Grantmakers investing in housing opportunities for low and middle income families can focus on down payment assistance, leveraging credit unions and CDFIs’ more flexible tools, funding incentives like safe mortgage products, and seeding programs that offer guidance about the process and homebuyers’ options.

Not everyone is in a place for homeownership, so grantmakers are also giving serious attention to affordable, quality rental options. For some families in select innovative markets, renter equity is one alternative to homeownership. In one program, rents are about half of what they would be at market rate. Residents accumulate credits that translate into equity by participating in the management of the community, paying rent on time, and attending monthly association meetings. Residents can ultimately withdraw their equity and take loans against them during their residency.

AFN members collaborate to understand and promote strategies like these that ensure quality housing is accessible to families of all income levels.

“At Wells Fargo, we believe that supporting programs and resources that encourage asset building and increase homeownership can create game-changing economic opportunities, strengthen underserved neighborhoods, and ultimately, improve well-being and quality of life.”

Shelley Marquez | Wells Fargo Corporate Responsibility and Community Relations

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