For the vast majority of renters today, homeownership is viewed as an essential part of achieving the American Dream, according to a recent survey by Freddie Mac. Yet a combination of unaffordable housing prices, difficulty qualifying for a mortgage and saving for a down payment are creating significant roadblocks to homeownership for many people.
To help address homeownership disparities in Madison, Wisconsin, which are some of the widest in the nation, the Urban League of Greater Madison created the Single-Family Home Ownership Program. Forged in 1992 in a partnership with the Wisconsin Affordable Housing Corporation and U.S. Bank that is called Madison Community Reinvestment Associates, the program is making the dream of homeownership a reality for low-income families in the area and is helping them to work toward economic self-sufficiency. The Urban League of Greater Madison is an affiliate of the National Urban League, the nation’s oldest and largest community-based civil rights and social service organization.
Over the years, the Single-Family Home Ownership Program has purchased and upgraded 51 single-family houses in various Madison neighborhoods. These homes are then leased to qualifying low-income families at affordable rental rates. Participating families also receive financial education and home maintenance counseling. At the end of the program, families have the option to purchase the house at an affordable price, with no down payment, plus all mortgage reduction and appreciation in value is passed directly to them.
“To date, 31 participating families have purchased their homes, and the average equity passed along to them is nearly $50,900 – a total of $1.58 million for the families,” said Ruben Anthony Jr., PhD, Chief Executive Officer of Urban League of Greater Madison. “Equally encouraging, household incomes grew by an average of 77%, credit scores improved and household assets increased more than tenfold. This demonstrates that homeownership is more than the fulfillment of the American Dream; it can also be an on-ramp to greater financial security and the middle class.”