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Helping Black families bridge the wealth gap with down payment assistance

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Posted at 2:21 PM, Mar 18, 2022
and last updated 2022-03-18 17:21:17-04

DENVER, Colo. — Justin Murchison is now a proud homeowner. He purchased his first home in 2021.

"I'm so used to apartments. I'm so used to renting. I'm so used to moving in two years, you know what I mean? But this is the first time which I can actually invest into this and it'd be worth more," he said.

Homeownership is the no. 1 way families build wealth in America, but for decades, banks across the nation denied lending to Black families.

"There is a big income gap in terms of what families make each year, but the biggest gap of all is the wealth gap, which is how much assets or property you've accumulated over time that you can carry and pass on to your kids," said Mike Johnson, CEO of Gary Community Ventures, a Colorado-based nonprofit.

Last year, the organization created a fund to help Black families afford the down payment on their first home.

The Dearfield Fund, which is made up of donations, gives up to $40,000 of a down payment.

Eventually, when the home is sold, the family pays back the money to pay it forward to another family.

"My dad was a, was a veteran when he wanted to take out a bank loan, a bank bet on him and my dad was not a very good bet at that point, and that meant he was able to build a family business," said Johnson. "What we know is, historically, there have been so many capable and qualified Black borrowers in this country who couldn't get the loan."

Before 1968, it was legal for banks to refuse to lend to families based on race. It had a detrimental impact on Black family wealth, but the gap is larger today than it was in 1960.

Before the pandemic, the Black homeownership rate hit 40.6%. At the same time, white homeownership was at 76%.

Today, the typical white family has $184,000 in wealth. The typical Black family has $23,000 in wealth.

"The difference here is that it is righting a wrong. It is, it is redressing a past that no one could be proud of or no one should be proud of in this country," said Khadija Haynes, a community advocate and advisor that helped shape the Dearfield Fund to make it the most impactful.

"There's so much good that has been done already, but the gap is a chasm, it is a drop of water in the Colorado River at the bottom of the Grand Canyon, but this drop of water is creating ripples that are going to become waves. We hope, we hope that this isn't singular," said Haynes.

The fund has already helped 50 Black families. The goal is to eventually reach 500 Black families. There are privately-funded programs popping up around the country like it, and the folks behind Dearfield hope that trend continues.

"We tend to believe that the inequalities that this country has right now, we're not made with race-neutral policies. They were made by very race-specific policies, and we think to get out of some of those holes, you have to be able to target those families who have been really targeted for discrimination over the last 400 years," said Johnson.

"Generation wealth is extremely important. Leaving something for the people coming behind you is extremely important," said Murchison.

As he begins to build his wealth, he’s already thinking of how he can use this opportunity to help his family and inspire others.

"I encourage everyone, start the process, start thinking about it and start. Believing that you could actually do this, and it's not just so far fetched, it's not impossible," he said.