Housing advocate says with the right help, homeownership is attainable for all Minnesotans

The new president and CEO of the Minnesota Homeownership Center has a clear agenda: expand homeownership opportunities and protections for Minnesotans.

Roxanne Young Kimball used her six years serving on the center’s board, decade working for the city of Minneapolis and extensive previous work with foreclosure recovery in St. Paul in her application to become the center’s CEO and president. The move made her “so excited” to continue working toward accessible and equitable homeownership across the Twin Cities metro.

Young Kimball started her tenure as president and CEO of the 31-year-old center on June 24, taking the place of longtime president Julie Gugin, who retired. The nonprofit offers educational and counseling services by working with advisers at community organizations statewide.

In an interview edited for clarity and length, Young Kimball shared her vision for the center and problems facing Minnesota homebuyers and owners:

We had a really exciting policy advocacy success in the state Legislature, where we were able to secure $150 million of first-generation down-payment assistance. We’re partnering with Minnesota Housing and with Midwest Minnesota Community Development Corporation in order to roll those resources out.

We’re also working in partnership with Twin Cities Habitat for Humanity on expanding on a special-purpose credit program that’s focused on advancing Black homeownership. It’s focused very specifically on foundational Black households or African descendants of slavery.

There are three challenges. One is simply believing that you can purchase a home. There are so many myths out there about what it takes to purchase a home, and a lot of folks think they need to have a second income in the household or need to have a 20% down payment. Meeting with a homebuyer adviser at the center and going through homebuyer education is one of the best ways to dispel some of the myths and understand what it really takes in order to purchase a home.

The second major barrier that I see is credit scores. We provide support through many of our homebuyer advisers to do pre-pre-purchase counseling. In other words, doing the work to repair your credit so that you’re mortgage-ready and in a position to qualify for a mortgage, which is a loan from a bank, and purchase your home.

The third barrier is affordability assistance. Banks will look at your income and look at your credit score and qualify you for a loan of a certain amount. Depending on the market that you’re trying to purchase a home in, there may or may not be homes that are priced for your first mortgage. Say you qualify for $200,000 as your first mortgage. In some communities, you can purchase a home for $200,000, but in other neighborhoods and communities, the median home value is $350,000 or more.

There’s an affordability gap between what you can afford to pay for your monthly mortgage payment and what homes cost in your community.

There are several different initiatives that we have that are really focused at trying to impact the racial disparity gap. One is a program that we do in partnership with Minnesota Housing [and] the Homeownership Opportunity Alliance, that’s really about trying to align mortgage lenders and [real estate agents] and homebuyer counselors to centralize eliminating racial disparities.

We know the importance of representation and cultural responsiveness in order to serve different communities. Our network of homebuyer counselors offer services in multiple languages, including English, Spanish, Somali and others.

Another thing that we’re doing is trying to advocate in partnership with all of our partners to create some targeted down payment-assistance resources. The first-generation down-payment assistance is very specifically focused on people who haven’t owned a home and whose parents haven’t owned a home or lost it through foreclosure.

The advancing Black homeownership special purpose credit program is really something that’s intended to be in partnership with the first generation down payment assistance. It’s something that allows us to go even deeper in order to recognize some of the past harms that have happened that are very specifically focused on foundational Black households.

HUD provides us with funding that we then grant out to the different organizations that are part of our network. The role of the center is to work in partnership with the different organizations that we grant funds to and provide them with technical assistance and training. We’re really passing through financial resources and then providing the support to organizations so they can be successful using those funds.

From 2008 through 2018, we were really recovering from the foreclosure crisis. The foreclosure crisis decreased home values in such a stark way that from 2008 through 2018, we really went through this era of rebuilding the market.

From 2018 through now, the new trend that we’re facing is this rise in investor ownership of single-family homes. There’s been this high rate of investor owners that are often out of state. Effectively, there’s been a really high increase in purchases of single-family homes in order to be part of these sort of large investor-owner portfolios.

This reduces the amount of available housing stock for first-time homebuyers. If you’re competing with a cash offer from an investment trust, and your financing is with a mortgage or with a down payment assistance program, it can be viewed as a less competitive offer. It makes it even harder to purchase a home for personal homebuyers.

The second major trend I’ve been seeing is the increase in interest rates. The current interest rate is 6.8%, which is really a different payment than the 3% five years ago. Interest rates have quite literally doubled just in the last five years, and that’s really impacting affordability.

The rate of incomes increasing and the rate of home prices increasing are out of step with each other. Incomes in Minnesota have been increasing by about 2% a year. In the Twin Cities metro, home prices have been increasing about 6% a year.

The competitiveness in the market, the increase in interest rates and the affordability crisis are really working together to have some pretty significant market impacts, and the Homeownership Center is here to help. That’s the reason why we’re encouraging people to seek out our homebuyer education.