I’ve never owned land. Homeownership wasn’t really something that was talked about beyond my immediate household, but it has always been a dream of mine and a dream of my mother’s. For years before my mom bought her first home, we were renters, staying in two- and three-bedroom apartments, sometimes just us and sometimes with my aunt and cousins. That said, after years of renting herself, my grandmother was able to buy a home. She took pride in it, would spend hours working on it, and was simply heartbroken when she lost it.
I’ve always wanted a home like hers on a sizable amount of land—made of brick, though. I don’t think you could have survived sharing a roof with the late Sue Breland without having repeatedly heard her warnings against the perils of frame houses. I want a place for my family to live and gather in, to pass on, and be our safe-keeping space for generations. Here’s the thing, though: My home search is confined to metro Atlanta in the thick of a brutal seller’s market, accentuated with an influx of all-cash investors. What I’ve observed so far in my six-month journey scares me because now, it’s not so difficult to imagine a world in which homeownership is only accessible to corporations and hedge funds.
My husband and I zeroed in on this concept of building generational wealth through homeownership months ago thanks to a real estate course, but starting our journey to attain what The Washington Post reported is “broken for many Black families” has not been easy. We’re not rich. Our parents worked for everything they have, and neither of us were gifted trust funds or nest eggs to purchase property. That means my husband and I, like the generations before us, have had to work and save to be able to afford a down payment, only to be be priced out of our market.
In Chicago, where I’m from, the homeownership rate was 40% for Black people in 2018 compared to 75% for white Chicagoans in a study performed by Redfin real estate brokerage. In Atlanta, the disparity was 47% for Black people versus 75% for their white counterparts. In Charlotte, North Carolina, where Crystal Marie and Eskias McDaniels were hoping to access the American dream, the homeownership rate was 44% for Black people and 75% for white people. The McDaniels, a Black couple, told the journalism nonprofit The Markup they had been unable to access a mortgage despite having excellent credit and stable jobs, but Crystal Marie’s white coworkers had obtained mortgages. “I think it would be really naive for someone like myself to not consider that race played a role in the process,” she said.
The Markup found that in 2019, Crystal Marie’s allegation was true: Lenders were more likely to deny mortgages to people of color than similarly positioned white people, the nonprofit reported. “Holding 17 different factors steady in a complex statistical analysis of more than 2 million conventional mortgage applications for home purchases, we found that lenders were 40% more likely to turn down Latino applicants for loans, 50% more likely to deny Asian/Pacific Islander applicants, and 70% more likely to deny Native American applicants than similar white applicants,” journalists Emmanuel Martinez and Lauren Kirchner wrote. “Lenders were 80% more likely to reject Black applicants than similar white applicants. These are national rates.”
The journalists found that an algorithm developed in the 1990s and used by both the Freddie Mac and Fannie Mae federal homeownership programs contributed to the disparity, rewarding forms of credit that white people have more access to and not considering other factors like on-time rent and utility payments. “This is how structural racism works,” attorney Chi Chi Wu, of the National Consumer Law Center, told The Markup. “This is how racism gets embedded into institutions and policies and practices with absolutely no animus at all.”
For the Black families that have managed to defy the odds and buy homes—families like the McDaniels, who pushed back on the initial rejection and ended up being approved—those purchases have the power to change their entire family’s financial trajectory. Mary Pherribo, a widowed housekeeper and the daughter of former slaves, was inspired when she learned her late husband’s grandfather bought a 50-acre property and left each of his eight children a home, Pherribo’s great granddaughter Tai Christensen told The Washington Post. Pherribo, in turn, saved $500 and bought a home of her own in 1936, when she was 35 years old. “The guts it took for them to make that choice was amazing,” Christensen told the Post. “It’s proof that you can change the entire line of your family’s story. My father and my uncle own multiple properties and pretty much everyone in my family owns a home and has gone to college because of her decision.”
I hope my children will be able to say the same one day. What I couldn’t have predicted when I started learning about homeownership a year ago was how unfavorably I would be viewed—not in the eyes of lenders, but of sellers prioritizing all-cash offers. Between the three metro Atlanta realtors I contacted, none recommended using the Federal Housing Administration financing known in short as the FHA loan. Otherwise ideal for first-time homebuyers who may not be able to access large sums of money for a down payment, the FHA loan requires 3.5% down, has sellers pay closing costs, and doesn’t allow buyers to pay more than a property appraises for. Many sellers in highly desirable metro Atlanta areas aren’t even looking at offers attached to FHA financing. They expect buyers to be able to fill any appraisal gaps, meaning pay more than the property is worth. They expect multiple offers, including some all-cash offers and in large part, they are getting what they expect.
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