The nonprofit Minnesota Homeownership Center promotes and advances successful homeownership in Minnesota with an emphasis on serving those facing the greatest barriers to homeownership: lower income households and communities of color. This work goes straight to the heart of reducing Minnesota’s racial homeownership gap; one of the highest such gaps in the Nation.
In 2019, the Center enlisted a third-party research firm to undertake measurement of the Social Return on Investment of our homeownership education/advising and foreclosure prevention work. The results were eye-opening.
In a normal economy (we looked at 2015-2017), the Center returns $2.98 in value back to the community for every $1.00 in expenses incurred. More than 60 percent of this return comes from the additional number of homes purchased sustainably that would not have been purchased without our work. Another 30-plus percent comes from savings realized by foreclosures avoided, which would not have been avoided without our help. Regarding accruals, 65 percent of this return accrues to homeowners, more than half of which are homeowners of color, in the form of new and retained home equity. A quarter of the return accrues to the mortgage market in the form of reduced financial losses. And 8 percent accrues to local government agencies in the form of reduced spending.
In a foreclosure crisis economy (we looked at 2008-2010), the Center returns a full $12.52 in value back to the community for every $1.00 in expenses incurred. This illustrates the potential relief we will be able to bring to the overall economy as temporary COVID mortgage assistance programs begin expiring next year, and households begin to need help navigating their options.
As this study illustrates, reducing the racial homeownership gap in Minnesota is in everyone’s financial best interest.
Key Learnings
Homebuying navigation and foreclosure prevention work aimed at those facing the greatest barriers to ownership deliver a substantial return on investment that accrues to the entire community.
For more information, contact: Bill Gray, Stakeholder Relations Director, bill@hocmn.org, (651) 236-8974.
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