New funding to support first-generation homebuyers
Mayor Martin J. Walsh today announced the City of Boston is providing new homebuyers up to $5,000 through a partnership with Massachusetts Affordable Housing Alliance's (MAHA) First-Generation Homebuyer Program. The program assists income-eligible first-generation homebuyers in purchasing a home in Boston for the first time with a 2:1 matching program.
"Now more than ever, in Boston, we must take steps to create equitable opportunities and access to resources for all Bostonians. Improving pathways to homeownership can help address disparities in wealth, making this a vital part of our equity work," said Mayor Walsh. "I'm proud to increase the grant funding available through a strategic partnership with MAHA's First-Generation Homebuyer Program to assist more families in purchasing their first homes in our city."
Funding for this program has been redirected from the Boston Police Department's overtime budget to the Department of Neighborhood Development (DND), which was announced by Mayor Walsh last June in an effort to make a significant investment in equity and inclusion across the City. The DND dedicated $250,000 of the police overtime budget in addition to $75,000, making $325,000 in funding available to help increase homeownership rates in the city among first-generation buyers, immigrants, and buyers of color.
"First-generation buyers often don't have enough savings, or family members with the financial resources to tap, when trying to buy a home, said Symone Crawford, Director of Homeownership Education at the Dorchester-based MAHA. "This investment is critical in helping to level the playing field for those residents to become homeowners."
To be eligible for the $5,000 grant in the City of Boston, first-generation homebuyers must earn below 100 percent of the Area Median Income (AMI) and contribute $2,500 of their own money. The funds can be used toward down payment assistance and/or closing costs.
The City of Boston Home Center has added funds to the existing First-Generation Program developed by MAHA with support from the MIDAS Collaborative as well as funding from Boston Children's Hospital and the Wells Fargo Foundation.
"When purchasing a home, the financial questions are the most intimidating," said Dafany Pressat, a MAHA First Generation program graduate and Mattapan homebuyer. "The First Gen program gives first-generation homebuyers something to look forward to while attending home buying classes where the end goal is purchasing a home. I felt a lot more secure knowing that if we do our part by saving the $2,500, we will get rewarded for it with the money from this program. Enhancing the funding for this program for others like me to benefit from is truly great news."
Homebuyers who are the first generation in their families to buy a home often have a difficult time accruing the down payment and closing costs necessary to purchase a home, according to a study by the Urban Institute. Funds are not available from families for financial assistance often because the buyer's parents don't own a home and therefore cannot leverage the home's equity to provide financial aid to their children.
"We know first-generation homebuyers are less likely to become homeowners than those in similarly situated households who grew up with parents who are homeowners," said Sheila Dillon, Chief of Housing and Director of Neighborhood Development. "These funds will help make homeownership possible to those who will benefit for generations to come and help us close the gap on homeownership in Boston."
"We launched our first-generation homebuyer matched-savings program last year and already residents have saved over $187,000 for their first home," said Symone Crawford, Director of Homeownership Education at MAHA. "We are thrilled to be partnering with Mayor Walsh and his housing team to close the racial homeownership gap."
One hundred and fifty homebuyers are currently enrolled in the program, and fourteen have purchased homes so far. Of the 150 participants, 73 percent are Black and 18 percent are Latinx. Forty percent of participants are households headed by a woman, and one-third are households that identify as immigrants.
One of the City's goals, identified in Mayor Walsh's Housing A Changing City: Boston 2030 plan, is to increase homeownership rates for people of color, low- and moderate-income buyers, immigrants, and first-generation buyers. In 2017, only five percent of home purchase mortgage applicants were Black residents. Overall, homeownership rates for Black and Latino residents were 30 percent and 16 percent lower, respectively, compared to white residents according to American Community Survey data. The First-Generation Program aims to further the goal of increasing homeownership among communities of color and immigrants.
MAHA today also issued a 12-point challenge to close the racial homeownership gap through its' Homeownership Justice Vision. The challenge includes tripling lending in the state's most affordable mortgage program, a $100 million investment for first-generation homebuyers as well as new affordable homeownership opportunities throughout the state.
To find out more about the First Generation Homebuyer Program, go to https://mahahome.org/STASH.About the Department of Neighborhood Development
The Department of Neighborhood Development is responsible for housing the homeless, developing affordable housing, and ensuring that renters and homeowners can find, maintain, and stay in their homes. As part of the ongoing coronavirus response, the Office of Housing Stability is also conducting tenant's rights workshops to educate residents about the eviction moratorium and their rights. The Boston Home Center continues to provide down payment assistance to first-time homebuyers and home repairs for seniors and low-income residents. The Supportive Housing Division is working with various partners around the city to rapidly house individuals who are experiencing homelessness. For more information, please visit the DND website.About the Massachusetts Affordable Housing Alliance
MAHA educates and mobilizes to increase affordable homeownership opportunities, break down barriers facing first-time and first-generation homebuyers, and close the racial wealth and homeownership gaps. Since 1985, MAHA's campaigns have resulted in affordable mortgages for over 22,000 homebuyers and over $10 billion in public and private investment in affordable housing. Our comprehensive homebuyer and homeowner education programs have graduated over 36,000 individuals, more than any other organization in the state.