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New Program Will Steer Mortgage Dollars to BIPOC Homebuyers


Published June 13, 2022 at 2:24 p.m.

Champlain Housing Trust board member Issouf Ouattara with his wife and son - JAMES BUCK
  • James Buck
  • Champlain Housing Trust board member Issouf Ouattara with his wife and son
Champlain Housing Trust is launching a new program that will provide $25,000 to help BIPOC Vermonters purchase a home. The program will enhance the trust’s shared equity housing program, which provides low-income homebuyers assistance with a down payment.

The trust has long provided at least 20 percent of down payments for qualified buyers. Recipients must take a homebuyer education class and get a mortgage on their own from a lender. Under the new program, the housing trust will add $25,000 for BIPOC homebuyers.

The initiative is meant to address years of inequities that have resulted in a low homeownership rate for BIPOC people in Vermont and elsewhere, said Chris Donnelly, director of community relations for the Burlington-based nonprofit, which develops and manages affordable housing in northwestern Vermont.

“Our housing policy over the last 100 years has been racist,” said Donnelly, describing studies that show minorities have been blocked from homeownership through bias in longstanding lending programs and in real estate sales.

The Vermont legislature and activists have worked in recent years to remove decades-old covenants tied to some housing development deeds that sought to restrict neighborhoods to white people only.
Vermont has one of the highest ownership gaps between Black and white residents in the U.S., according to a report published in April  by the Vermont Housing Finance Agency. The report said 72 percent of white Vermont households own their home, while just 24 percent of Black households do.

For many people, home ownership is a fundamental life goal that brings a sense of security and dignity, said Issouf Ouattara, a Champlain Housing Trust board member who lives with his family in a Colchester apartment he purchased in 2016 through the shared equity program.

“There is definitely pride of ownership,” Ouattara said of his home.

Owning a home and building equity is a primary means for people to accumulate wealth.

“At the end of the day, I will be getting something out of this,” Ouattara said. “This place is going to gain value.”

Nobody has purchased a home yet through the new program. But a buyer is lined up to do so in July, Donnelly said.

The program is modeled after tools called special purpose credit programs that are designed to expand economic opportunity for minority groups. They are legal under the Equal Credit Opportunity Act, said Lisa Rice, who is president and CEO of the National Fair Housing Alliance, a nonprofit that seeks to address historical inequities in housing.

To develop the program, Champlain Housing Trust worked with an affordable housing policy group called Grounded Solutions, which is helping agencies around the country introduce special purpose credit programs.

Champlain Housing Trust is the first Grounded Solutions member to introduce such a program, said Tony Pickett, the Grounded Solutions CEO.

Pickett said he is working to make more people and agencies aware of the program. Many people, he added, believe such programs are illegal under the Fair Housing Act, which bars discrimination on the basis of race, color, religion, sex, gender identity, sexual orientation, disability, family status and national origin.

But the programs do not violate the act, he said.

“This legally allows a lender or a housing program to create a program that is specifically intended to benefit people who have been historically excluded or underserved in terms of mortgage and homeownership access,” he said.

Under the trust’s original shared equity housing program, homeowners who have received mortgage assistance do not take the 20 percent with them when they sell the home. It stays with the house, which lowers the price for the next buyer. The homeowner does get 25 percent of any appreciation on the home value when they move on.

Under the new program, the $25,000 given to BIPOC homebuyers is a three-year forgivable loan. If they sell the house after then, they can take that money with them; they must return a portion if they sell sooner.

"This new program allows the homebuyer to build equity that much faster; they recapture the $25,000," Donnelly said.

Champlain Housing Trust, one of several agencies in Vermont that build and develop housing, manages 2,500 affordable apartments and 650 homes purchased through the shared equity program in the state’s northwestern corner, including Chittenden County. The trust has also purchased eight hotels in the last eight years to use as affordable housing and provides an array of other housing-related services.

The trust is using a $3 million donation from the New England Federal Credit Union to support and administer the BIPOC homeownership program, Donnelly said. The donation covers all the program's expenses for three years, he said.