City wins grant to expand financial advice | Local News
ROOT — Before Dasheika Kidd became a program manager at Housing Resources Inc., she had a well-paying job in the corporate sector.
Kidd, who was born and raised in Racine, grew up in happy circumstances: when she bought her first home at 27, she was a third-generation homeowner. From the age of 5, she knew she was going to go to university.
These circumstances are especially rare among African-American families. According to a Federal Reserve Report 2017, black families own on average less than 15% of the wealth of white families; Latin American families own a little more on average. These disparities are the result of a long history of policies that have prevented minorities from accessing credit to buy cars, start businesses or buy homes, often explicitly because of their race.
When her grandmother was dying, she told Kidd she had to do what she could to help the community.
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“She told me I had to pay it forward,” Kidd said. “I feel like I have to make her proud in heaven because I made her that promise and that’s why I decided to change careers and get into nonprofits and take a position where I can actually see an impact in the community.”
In September 2015, Kidd took a job as a homeownership advisor with HRI, working with people to get their finances in order before buying a home. When the program manager retired a little over a year ago, she held that position.
Now, thanks to a new partnership with the Ville de Racine and a grant from Cities for Financial Empowerment (CFE)HRI plans to extend its financial advice beyond potential owners.
By teaching more people about credit, credit scores, and the mechanics of finance, Kidd hopes they will take control of their finances, accumulate savings, and improve their credit so they can access better jobs. apartments and, one day, maybe even buy a house.
Financial Empowerment Center
Racine is one of the six cities selected for the CFE scholarship. On Monday, the CFE had not announced which cities had also obtained the subsidy.
The first stage includes a $20,000 planning grant and access to training and resources to implement what CFE calls a Financial Empowerment Center, to be run in partnership with a nonprofit organization. lucrative.
This week, Kidd and other HRI staff and city staff are scheduled to attend a conference and training in New York that will include representatives from the other cities chosen for 2019, CFE experts and alumni. grant winners who currently run Empowerment Centers.
HRI and the city must submit an implementation plan and raise up to $150,000 to receive a matching grant by July 31, 2020. After the first year of implementation, the city is eligible for a match 1:2 up to $100,000 meaning that if the city manages to raise the full amount it would receive $200,000 to continue running the center.
Although they haven’t started the planning process yet, Kidd anticipates the grant will allow them to hire another financial advisor to increase their ability to work with clients.
Last week, the city council’s finance and personnel committee recommended that the full council approve the memorandum of understanding between the city and the CFE. It is due to be presented to council at its 7 p.m. meeting on Tuesday, Oct. 15 at City Hall, 730 Washington Ave., Room 205.
Barriers
On June 24, Vicky Selkowe, City Manager of Strategic Initiatives and Community Partnerships; Matt Rejc, Outreach Services Manager; and Mayor Cory Mason hosted a Lenders Roundtable where they invited local lenders to discuss some of the current barriers to homeownership.
According to the Consumer Finance Protection Bureau, in 2017, of the 3,569 Racine residents who applied for conventional mortgages, 3,245 were white, 132 were black, 50 were Asian, Native, or Pacific Islander, and 142 were of one race. not disclosed.
Of those applicants, 2,578 had mortgages: 2,331 were white, 108 were black, 50 were Asian, Native or Pacific Islander, and 50 were of an undisclosed race. Considering that Racine’s population is nearly a quarter black and a quarter Latino, those numbers are low.
Ashley Madala, vice president of lending at Educators Credit Union of Mount Pleasant, said these statistics match what’s seen nationally.
“It was definitely a concern as it hit close to home,” Madala said.
The biggest issues she has seen with applications are either low credit or no credit. Educators also have programs to educate their clients about credit and how to prepare for homeownership, but many first-time homebuyers are unaware of the depth of preparation needed to a mortgage loan.
“It’s a process – you can’t wake up one morning and buy a house,” Madala said. “Helping people set those goals so they can get the education they need is really part of that process.”
She also said that apart from those who are refused or who have to wait, there are even more who never submit an application.
“If home ownership is something you never saw growing up, it would never seem like something attainable,” she said.
Madala, on behalf of the educators, is one of six lenders who signed a letter of support for the city’s grant application, along with Associated Bank, Johnson Financial Group, Community State Bank, North Shore Bank and Sierra Pacific Mortgage.
“We have deep roots in the community,” Madala said. “It’s important to us that our community members are successful and able to buy a home where we are.”
Besides mortgages, Kidd said she sees credit scores impacting many aspects of people’s lives, such as the type of car loan they can access. Kidd said he’s seen many minorities with predatory loans with interest rates as high as 30% on people’s credit scores.
“A lot of minorities are exploited in this way just because they don’t know,” she said. “They don’t care if it’s variable or fixed (interest), they just know they need a car to get their kids to school and to work.”
HRI has helped people get out of predatory lending, allowing them to finish paying those debts and start building wealth. Bad credit also affects the apartments people can rent and whether or not they are hired for a job.
“It’s very important that we work with minorities to get their credit where they need to be to succeed in life,” Kidd said.
Create wealth
Year after year, HRI exceeds its targets in terms of the number of people the organization advises and prepares for home ownership and the number of those people who end up taking out a mortgage. In 2018, HRI officials hoped that 240 people would attend their homebuyer training course; 260 came.
After that first two-day course, they hoped 170 people would return for the HRI intake appointment, a two-hour session in which attendees bring their financial records and the counselor extracts and reviews the credit report. and customer credit rating. They also exceeded that goal last year.
Finally, HRI’s goal for 2018 was to sign 70 mortgage clients; in fact, there were 79.
HRI’s focus on helping families become homeowners is a central cause for Mason’s administration, which has prioritized homeownership.
“Homeownership has always been a central part of the American Dream and for most of our residents it seems out of reach,” Mason said. “We want to give our residents the tools they need to become homeowners.
Mason sees homeownership as a way for families and neighborhoods to achieve greater stability and for more families to pay property taxes to the city, which will hopefully help the rate of imposition to lower.
“It’s a win for the residents and it’s a win for the city,” Mason said.
This story has been corrected from its original version. Representatives from HRI and city staff attended the conference in New York the week this article was published.