More Work Remains for ‘3by30’ Housing Goal

WASHINGTON – The homeownership rate for Black Americans has been rising in recent years – ever since, after falling to historical lows in 2019, a group of housing organizations banded together to form the Black Homeownership Collaborative to do something about it.

“It’s been a dramatic turnaround, but it did not just happen,” Lisa Rice, president and CEO of the National Fair Housing Alliance, said during the Black Homeownership Collaborative conference on Tuesday. “It was due to deliberate actions that were put in place to widen credit access, special purpose credit programs and more. ... We’re heading in the right direction.” But housing leaders said more needs to be done to make sure they don’t fall short in meeting the 3by30 goal – that is, creating 3 million net new Black homeowners by 2030.

The Black Homeownership Collaborative, comprising finance and housing organizations, including the National Association of Realtors®, hosted a one-day conference bringing together researchers, housing experts and elected officials. Organizers renewed their commitment to the initiative – now in its third year – and highlighted where they stand in achieving it. If they’re able to reach the 3by30 goal, the Black homeownership rate will have increased by more than 10 percentage points from when they started and will be at its highest point ever.

‘Still achievable, but challenges remain’

Black homeownership rates continue to lag behind those of other minority groups and white households, per NAR’s 2024 Snapshot of Race and Home Buying in America report. Panelists attributed that to the long history of redlining, racially restrictive covenants, and the denial of access to credit that caused inequality in homeownership and a widening wealth gap.

New policies aim to help more Black Americans become homeowners, including programs geared to aiding first-generation homeowners and cost-burdened renters, which are disproportionately high among Black households. 

“Progress has been made, but it’s not fast enough to reach the [3by30] goal by 2030,” said Jung Choi, a researcher at The Urban Institute. Between 2019 and 2022, the Black homeownership rate increased by 2.1 percentage points. “If the Black homeownership rate continues to increase at the current rate, we will have 8.5 million by 2030—but that is still 1 million short of what we’re trying to achieve,” Choi says.

That said, even with recent challenges, such as inventory shortages of affordable homes and high home prices and mortgage rates, Choi still called 3by30 an “achievable goal.”

Charting the progress

The 3by30 initiative launched with a seven-point plan detailing actionable steps to increasing Black homeownership, including a focus on down payment assistance, homeownership counseling, housing production, lending and more. Panelists on Tuesday highlighted a number of new programs and policies supporting this, including:

Special purpose credit programs: More lenders are developing SPCPs that expand credit opportunities to underserved borrowers. Lenders such as JPMorgan Chase, Wells Fargo, and TD Bank, among others, have launched SPCPs, and Fannie Mae and Freddie Mac have launched SPCP pilot programs. “SPCPs are one of the great examples of how we’ve made advances in our 3by30 initiative,” said Bryan Greene, vice president of policy advocacy at the National Association of REALTORS® and co-chair of the Black Homeownership Collaborative.

Forbearance and loss mitigation: Nearly 20% of Black homeowners with a mortgage entered forbearance during the pandemic, and many housing leaders feared a foreclosure crisis as a result. Housing leaders credited forbearance and loss mitigation programs for helping households, including the high number of Black households affected, sustain homeownership during that time. “There are more options built into programs now to help borrowers who may experience a permanent or temporary reduction in their income to be able to stay in their home,” Julia Gordon, the Federal Housing Administration commissioner, told conference attendees.

First-generation assistance: Many municipalities and states—like California, Colorado, Massachusetts, Minnesota, North Carolina, and New Jersey, among others—have launched first-generation down payment assistance programs, which were also called for in the recent White House housing plan. Also, Fannie Mae and Freddie Mac included a callout to “first-generation home buyers” in its 2024 Equitable Housing Finance Plan, which may prompt more lenders to consider implementing their own programs, Choi says.

Expanded underwriting criteria: The government-sponsored enterprises Fannie Mae and Freddie Mac and the FHA are incorporating positive rental payment history into their mortgage underwriting. “That is helping more borrowers qualify for a mortgage,” Gordon said. Changes to how student loan debt counts in underwriting are helping further.

Zoning reforms: More states and municipalities are overhauling single-family zoning policies by allowing two- to four-unit buildings and accessory dwelling units and facilitating more housing near transit areas to increase access to affordable housing.

Down payment assistance: A growing number of grants and low-cost or deferred home loans are available nationwide to help offset the costs of homeownership to more households. Gordon said the FHA remains committed to helping make homeownership more accessible to Black home buyers through its popular first-time buyer, low down payment loan option, which also has no credit score limitation—although some lenders may do overlays—and flexible debt-to-income ratios.

‘Let’s be bold’: unleashing an economic boom

Boosting the Black homeownership rate does not just benefit a population that has faced a long history of being sidelined in the housing market; it could also provide a significant economic boost, Rice said. She pointed to National Fair Housing Alliance research that suggests the U.S. economy could grow by $5 trillion over the next five years just by effectively addressing discrimination that targets Black communities, including by promoting greater home financing.

Further, “homeownership affects the wealth of future generations,” Choi said. Research shows homeowners have 40 times the wealth of renters, so closing the gap within homeownership rates also could help close the nation’s wealth gap.

“We need the American public to understand the need for bold, aggressive action with housing policy to overcome the legacy of discriminatory practices … that has created great disparities in wealth and opportunity,” Greene said. “Initiatives like 3by30 are necessary—we have to take a lead in order to make a change.”

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