Home News A nonprofit wants to buy up houses to give people ‘a fair shot at homeownership’

A nonprofit wants to buy up houses to give people ‘a fair shot at homeownership’

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For low- to middle-income homebuyers, the prospect of going on par with investors paying cash for simple, affordable housing can be daunting, if not financially impossible. There is a possibility

But one Milwaukee nonprofit believes it can create a level playing field.

Earlier this month, Acts Housing launched a buyout fund to buy the types of single-family homes typically attractive to out-of-state investors looking for more rental properties. Nationwide housing costs. Unlike low- to moderate-income buyers, investors can also buy homes off-market in all-cash transactions without contingencies, making it harder to compete.

But with a $1 million operating grant from the local Zilber Family Foundation, Acts Housing hopes to use the same mechanism to stay competitive and offer sellers a little moral relief. Homeownership is possible for an increasingly marginalized class of people.

“Without market turmoil, investor capital will continue to flow in, giving low- to middle-income families, primarily black and Hispanic families, a fair chance to own a home,” said Michael Gosman. No,” he said. President and CEO act housingserves low- to moderate-income rental families who want to become homeowners.

Gossman said the group will sometimes buy from investors, but will market directly to individual sellers who may want the same all-cash sweeteners that investors offer while maintaining a neighborhood feel. acquire a house by

Acts Housing is currently in the process of raising $10 million in grants for a revolving fund that will allow it to purchase and renovate at least 100 properties each year beginning in 2023, Gosman said.

“Owning a home tells you what your payments will be for the next 30 years. You can invest in your family, you can invest in your home, you can invest in your neighborhood.”

— Teig Whaley-Smith, Chief Alliance Executive, Community Development Alliance

The organization has already bought its first home, according to Dorothy Yorkeof the group The home previously owned by an investor was a three-bedroom, 1,000-square-foot property that was priced at $90,000 before $29,000, said the vice president of real estate. of Repair. Act Housing is currently looking for families to live in the reconstructed homes, she said.

This puts the property in the city’s sweet spot at an affordable price, York added. For families served by Acts Housing, affordable housing typically costs about $125,000 to $150,000. (July 2022According to Redfin, the average home price in Milwaukee is around $202,000, up 9.4% from the previous year. )

However, such relatively inexpensive housing is equally attractive to investors looking to expand their rental portfolio. And Milwaukee isn’t the only city battling that reality: Investors poured cash According to the company, in single-family rental properties nationwide testify at a congressional hearing Held in June.

The homes targeted were often located in communities with higher than average populations of people of color, according to the hearings. Already low home ownership rates among black Americans will continue to get worse as prices rise.

Teague Whalley-Smith, chief alliance executive of the Local Community Development Alliance, a coalition of Milwaukee stakeholders, said the buyout fund will also work to promote racial equality through affordable housing. The focus is on .property returns to home ownership.

“The housing system is destabilizing because people don’t own their own homes,” Whaley Smith said. “Owning a home tells you what your payments will be for the next 30 years. You can invest in your family, invest in your home, invest in your neighborhood.”

In Milwaukee, where about 39% of its residents are black, the number of single-family or duplex properties owned by out-of-state landlords has quadrupled since 2005, according to a statement from Acts Housing, which announced the acquisition funding. . The investor has acquired his 40% of the city’s available inventory of homes priced under $125,000, the statement said.

Other cities are facing similar problems and coming up with similar solutions. It’s about buying real estate before it’s lost to investors who want to rent it out at a high price.cincinnati agency made headlines earlier this year That’s when we outnumbered over a dozen companies to buy nearly 200 local homes and keep them affordable.

“We encourage families who come looking for our services to qualify for the best financing in existence and find a home that meets their needs if they do everything right. I promise to help,” said Gossman. “Right now, our family isn’t finding these homes as consistently as we’d like.”

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