RIGHTS BLOG: Updates from the Department of Human Rights
Crisis to Opportunity: MCASA Homes creating more home owners
Posted on 5/11/15
At the peak of the housing crisis in 2008, Minnesota experienced 26,000 mortgage foreclosures. Most of those foreclosures occurred in urban areas where predatory lending practices and concentrations of poverty made homeowners vulnerable to losing their homes. The foreclosure crisis had a dramatic impact on home ownership rates within communities of color.
According to a 2012 Minnesota Compass report, only 39% of households of color own their home in Minnesota. Home ownership is even lower for African-Americans (26%) and foreign-born blacks (23%). In response to the report, Warren Hanson, president and CEO of the Greater Minnesota Housing Fund, noted “If we are going to have any effect on reduction of poverty for future generations, we have to help remedy things like wealth creation in the form of homeownership, and this is one time when extra efforts are needed to correct a wrong, to improve equity in every sense of the word.”
One “extra effort” in the City of Saint Paul seeking to create more home owners is the MCASA Homes program. MCASA, a partnership between the Aurora St. Anthony Neighborhood Development Corporation and Model Cities Community Development Corporation since 2004, provides affordable homeownership opportunities to low and moderate income families in Saint Paul.
“We recognized in the African-American Community, we were disproportionately low in the terms of homeownership,” said Dr. Beverly Oliver Hawkins, CEO of Model Cities. “We thought we should do something about it.” MCASA seeks to work with families who have a household income that is 80% of area median income; for a family of four, 80% of area median income is $64,440.
If a family is financially ready to purchase a home without any financial literacy education, MCASA is ready to work with them to find a home in an emerging revitalized neighborhood. “We want to purchase homes as a means of rebuilding a community that we saw being devastated by [the recent] housing crisis,” said Dr. Hawkins.
MCASA is prepared, if a family is not quite ready to purchase a home, to provide financial literacy, assistance and guidance during monthly group sessions or through home ownership counselors working one-on-one with purchasers.
“We begin to address those minor barriers that are really big barriers – in terms of traditional homeownership – to purchase homes,” said Nieeta Presley, Executive Director of the Aurora/St. Anthony Neighborhood Development Corporation. “We build sustainable well-educated homeowners.”
MCASA Homes sells homes to MCASA participants on either a contract-for-deed or a lease-to-purchase basis, depending on the needs of the purchaser. A contract-for-deed agreement allows the purchaser to move into the house and enjoy the benefits of homeownership while allowing the purchaser time to clear up debt or credit issues in order to secure their own mortgage.
Listen to the Chatcast to find out more about how these non-profits are increasing home ownership for people of color in Saint Paul.
Visit MCASA for more information on the programs.
For more information on home ownership, please visit Minnesota Housing Finance Agency.
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