Sixty percent of individuals and families in the U.S. own their homes. The race disparity in housing across the country, however, is stark, causing a major home ownership gap between Black and white families. So stark that, according to research, 5,000 Black individuals and families would have to buy a home every week over the next 10 years in order to close the gap.
The numbers don’t lie: 73% of homeowners are white, compared to 44% of Black homeowners–a 29% gap, according to the 2023 Census. In Washington, D.C., the white home ownership rate is 47%, while Black home ownership comes in at 39%–an 8% gap. This disparity not only tells a story of disproportionate access and the impact of discrimination, it explains the overall wealth gap between the two racial groups and how Black people continue to be left behind.
The government–from the Biden-Harris Administration, to DMV-area jurisdictions–is working to overhaul housing discrimination, make home buying more affordable, and build wealth for Black buyers. Responding with policies, programs, products, and partnerships, government agencies in Washington, D.C. and Prince George’s County, Maryland, are prioritizing the needs of Black people to ensure homeownership is woven into the legacies of Black households starting now.
“Particularly for our FHA products, we know that we’ve already helped just in the past couple years, 160,000 Black homeowners avoid foreclosure and 250,000 new Black homeowners buy a home,” HUD Interim Secretary Adrianne Todman told The Washington Informer. “We have worked really hard to make sure Black families keep their homes. Even in the midst of the roller coaster of the past few years with the pandemic, home rates increasing, interest rates increasing, HUD is really proud of that number. Many of our consumers of our FHA mortgage insurance tend to be Black and Brown folks who have a difficult time in the conventional market.”
The administration has budgeted $10 billion for the 2025 budget to help first generation homeowners to help nearly a half million families purchase a home. Todman said this is key in decreasing the racial gap.
“It’s an idea we hope will get some uptick in congress,” she said. “We are helping to reduce fees for first-time homeowners who are Black and Brown in order for them to get access to their dream of earning a home,” said U.S. Department of Housing and Urban Development (HUD) Acting Secretary Adrianne Todman.
“President Biden made sure we prioritize equity and how we think about programs and rules,” said Todman. “He said we need to do everything we can to help first-time homebuyers and first generation homebuyers, folks whose parents or grandparents didn’t own a home. That has been our true north from the beginning when he was sworn into office and we have been in lockstep.”
Decreasing the homeownership gap on the local homefront
Formerly known as Chocolate City, increasing Black homeownership in Washington, D.C. may sound like a dichotomy. Nevertheless, Mayor Muriel Bowser in 2022 introduced the Black Homeownership Strike Force (BHSF) to increase Black homeownership for 20,000 people by 2030.
When Bowser made the announcement, she said the goal of the Strike Force was an effort to undo “the lasting legacy of discriminatory housing laws that locked many Black families out of homeownership throughout the 20th century,” with the goal of building generational wealth.
Operated by the Deputy Mayor for Planning and Economic Development (DMPED), the Strike Force published a report with 10 recommendations including holding the District accountable for providing estate planning resources and legal services to assist with the transfer of ownership of homes, and discouraging the conversion of older housing stock into unaffordable homes for Black homebuyers, and instead ensures quality housing rehabilitation. The report also recommended the District support Black homeowners at risk of foreclosure, and protect them from unwanted solicitation regarding the sale of their homes.
An additional program available to all, regardless of background, is the D.C. Inclusionary Zoning Affordable Housing Program which can help increase Black homeownership, in addition to getting prospective homeowners used to the idea of owning a home.
Established in 2009, this program provides units for rent and sale to eligible individuals and families in new units throughout the District in the burgeoning D.C. Wharf neighborhood on Water Street, SW, or the centrally located Gibson and Seven Shepard Park condos on Georgia Avenue.
The Transition of ‘A Livable Community’
Prince George’s County, made up of 27 municipalities, was once deemed “A Livable Community.” In 2006, the county was known as the wealthiest majority-Black county in the U.S., Ebony magazine reported. Less than 10 years later, leaders changed the county’s motto to better market the area to potential homebuyers and businesses to, “Experience, Expand, Explore Prince George’s County.” Today, however, Prince George’s County is no longer the leader, having lost many residents to the neighboring Charles County and, as a result, Black homeownership could use a boost.
Prince George’s County Department of Housing and Community’s (DHCD) created the Pathway to Purchase First-Time Home Buyer Assistance Program (P2P).
“The County uses its HOME Investment Partnership Entitlement funds from HUD to administer this downpayment and closing cost assistance program to income eligible, first-time homeowners in the County,” said DHCD Agency Director Aspasia Xypolia. “From July 2020 to present the P2P has provided assistance to 36 households of which 31 were African American households.”
In late 2023, the County revised its P2P guidelines to align with DHCD’s Maryland Mortgage Program (MMP). This revision increased the county’s maximum assistance amount from $10K to $25K and provides the homebuyer the opportunity to access another $8,500 through the MMP, according to Xypolia.
In the Town of Fairmount Heights, incorporated in 1935 as the second established African American Township in Prince George’s County, the county provided $1,350,000 for the Fairmount Heights Net Zero Homes and Microgrid Project. The funds will provide six new affordable single family, detached Net Zero homes in Fairmount Heights to low – moderate income eligible, first-time homebuyers. Xypolia said the plan will include the incorporation of the county’s Black history into the project.
“A ‘pocket park’ will also be constructed in connection with this project to memorialize local history and showcase the Project’s innovative green design,” she said. “The site was the location of the Town’s first Municipal Building constructed in 1941 by residents of the town. While the building was torn down in 2000, the site is part of the Town’s African American History walking tour and has a historic marker.”
In addition, Prince George’s County offers Housing Rehabilitation Assistance Program (HRAP) to residents which provides zero percent, deferred loans to eligible low-moderate income homeowners to allow for the elimination of health hazards, major systems repairs and replacements, energy efficiency and accessibility improvements/repairs.
HRAP has assisted 46 homeowners since 2021–95% of those were Black households. It also offers a Homeownership Preservation Program (HOPP) which provides grants to income-eligible households to allow for health, safety, energy efficiency and accessibility repairs. This program served 39 households of which 31 were African American households.
“The program was so successful that the county allocated an additional $750K to the program,” said Xypolia.
Squashing housing discrimination
In March 2022, the Biden-Harris administration vowed to ensure Black homeowners get the full value for their homes by launching its Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) Action Plan. The initiative allows prospective borrowers applying for FHA-insured loans to request a Reconsideration of Value on a property if the initial valuation is lower than expected or there is indication of illegal bias, according to the White House.
“Appraisal bias has been a problem for as long as there’s been a housing market,” Julia Gordon, assistant secretary for Housing and Federal Housing Commissioner at HUD told The Washington Informer. “We know that even after redlining was declared illegal by the Supreme Court, the appraisal industry for many years and up through this day, often values a home lower if it is in a community of color. The Biden-Harris Administration decided this was something they wanted to take particular aim at, and put together the PAVE initiative which is participated in by quite a number agencies across the government.”
President Biden also prioritized the protection of Black Americans’ access to housing by combating housing discrimination by way of a Presidential Memorandum directing his Administration to address racial discrimination in the housing market. At the start of this year, HUD published a Notice of Proposed Rulemaking to fulfill obligations under the Affirmatively Further Fair Housing Act. This rule will help overcome patterns of segregation and to hold state, localities, and public housing agencies that receive federal funds accountable for ensuring that underserved communities have equitable access to affordable housing opportunities.
In an effort to advance equity and opportunity, the administration is also committed to assisting Black landowners in resolving title issues. This is a direct response to the 60% of Black-owned farmland in the South that is considered heirs’ property, land that passes through inheritance without a will and that, as a result, has historically rendered owners ineligible for U.S. Department of Agriculture (USDA) programs, including lending. Since the USDA’s introduced the Heirs’ Property Relending Program in 2021 which offers underserved communities–including Black land owners–funds to assist heirs in resolving ownership and succession issues on farmland with multiple owners.
Several factors are up against anyone looking to become a homebuyer or jump back into the housing market due to rising home prices and interest rates. For Black people, buying and keeping a home is even harder due to discrimination at gatekeeping at all points of the homebuying process. The disparity of homeownership is still a challenge . The median home price is up more than 5%, coming in just below $383,000, according to real estate company Redfin. Mortgage interest rates are more than 7%, and
Addressing high prices, interest
The good news is that incomes across the country have increased two-fold, but the bad news is that housing prices tripled, according to a recent White House report. The report found that U.S. housing prices rose 50% faster than income in about 20 years, leaving governments to address homeownership with record-high mortgages and mortgage interest.
HUD’s unconventional loans allow homebuyers to take advantage of a lower down payment, more competitive insurance rates and the opportunity to get free access to housing counseling. FHA offers a low down payment loan product where the borrower only needs to make a down payment of 3.5%, and they can also get help with that.
“Many Americans mistakenly think you need 20% down to buy a home, or they think you need to get special permission to have a low down payment loan,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “Our core product is a low down payment, and we also have a more flexible credit score and debt-to-income requirements than the conventional market.”
Even with low down payments, land protections, and affordable housing incentive programs, homeowners can experience challenges. HUD anticipates this and works to protect homeowners during this vulnerable state. Todman said because those who experienced an economic shock had FHA-insured homes, they were able to configure mortgage payments,and even stop paying on mortgages while catching up.
“So many Black families lost their homes in 2008-2009 and lost the ability to grow wealth,” she said. “We don’t want that to have that ever repeated when a family goes through economic shock… divorce, sickness. People are able to maintain their home with the tools we have.”
The administration has budgeted $10 billion for the 2025 budget to help first generation homeowners to help nearly a half million families purchase a home. Todman said this is key in decreasing the racial gap.
“It’s an idea we hope will get some uptick in congress,” she said. “We are helping to reduce fees for first-time homeowners who are Black and Brown in order for them to get access to their dream of earning a home,” said Todman.
“President Biden made sure we prioritize equity and how we think about programs and rules,” she continued. “He said we need to do everything we can to help first-time homebuyers and first-generation homebuyers, folks whose parents or grandparents didn’t own a home. That has been our true north star from the beginning when he was sworn into office and we have been in lockstep.”