In early July, Phillip Ward became the first member of his family to purchase a home of his own, utilizing funds from one of the two new programs enacted by the Legislature in 2023 to assist first-generation homebuyers. One program, the First-Generation Homebuyer Loan Program, is administered by the Minnesota Housing Agency, and the second and larger program, is the First-Generation Homebuyers Community Down Payment Assistance Fund.
For Phillip Ward, homeownership seemed a distant and improbable dream. After serving a prison term that ended in 2007, he rented an apartment in St. Paul public housing. Despite subsidies, rent increased over time, straining his budget. His parents had never owned a home, and statistically it seemed he never would either.
For generations, Black Minnesotans were deliberately excluded from homeownership. First, by racial covenants in housing deeds that prevented sale of homes to African Americans and other ethnic and religious minorities. And later, by redlining, a practice that excluded people in Black neighborhoods from obtaining the government-backed mortgages that became widely available in the 1930s, making homeownership possible for millions of Americans.
Although both these practices were illegalized by passage of the Fair Housing Act in 1968, their legacy cast a long shadow. People living in formerly redlined neighborhoods continued to be cut off from access to good schools and higher-paying jobs. For generations, they were trapped in a cycle of renting and financial struggle. Over time, Minnesota earned the dubious distinction of having the fifth largest racial homeownership gap in the United States. Nearly 77% of the state’s white residents own homes, while only 25% of residential properties belong to Black families.
Ward grappled with this reality as he began exploring what it would take to buy a home of his own. After enrolling in homeownership classes, he began carefully budgeting his earnings, and putting away money for a down payment. But after years of scrupulous saving, he still didn’t have enough. The rising cost of housing was putting a home of his own beyond reach.
All that began changing in 2023 when the Minnesota Legislature appropriated a total of $150 million in down payment assistance for first-generation homebuyers to be directed through two pilot programs.
The bill establishing the “First-Generation Homebuyers Community Down Payment Assistance Fund” was sponsored by Rep. Esther Agbaje and Sen. Clare Oumou Verbeten and received wide support from a diverse coalition that included Minnesota Realtors® (MNR), the Minnesota Homeownership Center, Twin Cities Habitat for Humanity, and other nonprofit organizations.
The First-Generation Homebuyers Community Down Payment Assistance Fund, backed by MNR and coalition partners, is a three-year pilot program designed to help first-generation homebuyers who don’t have enough savings for a down payment. The program could provide eligible buyers with 10% of the purchase price, up to $32,000, in the form of a forgivable, zero-interest loan. Earlier this summer, $100 million in funds became available for distribution to aspiring homebuyers through this program.
Additionally, the Minnesota legislature allocated $50 million for a similar but separate program, the First-Generation Homebuyer Loan Program, which is administered by the Minnesota Housing Finance Agency. Ward was among the early applicants. Quickly qualifying, he was approved for enough funds to put a downpayment on a tan stucco home in a quiet St. Paul neighborhood. He closed on it in early July. Just days after moving in with his father, Patrick Preston, Ward found himself hosting his first gathering as Lt. Governor Peggy Flanagan, key legislators, and Paul Eger, MNR s
enior vice president of Governmental Affairs speaking at a press conference on his front lawn to raise awareness about first-generation homebuyer downpayment assistance.
“It takes a village to get these things across the finish line, so that we can welcome people home to their neighborhoods, and to their villages,” said Flanagan.
Ward, who was visibly moved by the high-profile housewarming party, briefly addressed the crowd of newspaper and TV reporters.
“Getting out of prison, I had a different aspect on life. I didn’t think I’d be able to have a home for myself, for my family. Seeing all the hurdles and closed doors, I thought it was impossible. I felt bad. So, after some readjusting and goal setting, everything was made possible. I want to give a big shoutout to all my friends that helped along the way. Everyone that gave me advice. Homeowners who instilled wisdom and helped me plan my future. It will help future generations down the line. The excitement is something to call my own. Being able to have a stake in the community. Have a voice. A voice for the future. A voice for my family.”
To read this article in the September/October 2024 digital issue of The Minnesota Realtor®, click here.
For more information on the two programs, visit these web pages: