BOSTON – MassHousing, together with the Baker-Polito Administration, announced the launch of the $60 million CommonWealth Builder Program, a landmark initiative to address the racial homeownership gap in Massachusetts by creating new homeownership and wealth-building opportunities in communities of color. It is the largest state-level program of its kind in the nation.
“We are committed to combatting systemic inequities and promoting homeownership and building wealth in communities of color is a key part of that effort,” said Governor Charlie Baker. “Through the CommonWealth Builder program, MassHousing is incentivizing new housing development and homebuying opportunities for middle-income residents of Boston and our Gateway Cities – particularly for people of color – empowering more people to become homeowners.”
“There is strong demand in communities of color for high-quality homes to purchase, but market forces have historically failed to produce homeownership development and opportunities for working households, reinforcing the racial homeownership gap,” said MassHousing Executive Director Chrystal Kornegay. “CommonWealth Builder is a major first step in addressing the housing and wealth disparities in Massachusetts by creating new, moderately priced homes where people of color can sink down roots, strengthen neighborhoods and start to accumulate wealth from owning homes that will eventually be passed on to future generations.”
Massachusetts has the sixth-largest racial homeownership gap the United States. Across the nation, approximately 46 percent of households of color own their own home, compared to just 34 percent in Massachusetts. The homeownership gap between white and nonwhite residents in Massachusetts has helped drive significant disparities in household wealth. A 2015 study by the Federal Reserve Bank of Boston found that US-born black residents in the Boston area had a median net wealth of $8.
The CommonWealth Builder Program is a double-bottom-line initiative. It will grow the state’s stock of moderately priced starter homes, and advance intergenerational wealth building in underserved communities. MassHousing believes that this is the largest state-level program supporting workforce homeownership, and the most significant effort aimed at closing the statewide racial homeownership gap.
In 2018, MassHousing established the Racial Equity Advisory Council for Homeownership (REACH), a public-private working group that seeks to narrow the racial homeownership gap through demand-side interventions including down payment assistance, homebuyer training, and marketing of high-quality mortgage products. The work of REACH led MassHousing to participate in an important and ongoing dialogue on this topic with Governor Baker and the state legislature’s Black and Latino Caucus, which brought the issue of the disparities for homebuyers of color into clearer focus.
The CommonWealth Builder Program evolved from MassHousing’s success in creating the nation’s largest state-level rental workforce housing financing program. Since 2016, MassHousing’s rental Workforce Housing Initiative – funded by the Agency’s Opportunity Fund – has provided subsidy to 50 multifamily projects, supporting the creation of 4,450 new rental housing units, 1,237 of which are affordable to middle-income households.
Because of the success of the rental workforce program, and the overwhelming need to foster homeownership opportunities in communities of color following the REACH and Black and Latino Caucus discussions, Governor Baker committed $60 million to recapitalize MassHousing’s Opportunity Fund to address the racial homeownership gap through CommonWealth Builder.
The CommonWealth Builder Program will provide market-based subsidies to support the construction of new, moderately priced single-family homes and condominiums in the state’s 26 Gateway Cities, the City of Boston, and Qualified Census Tracts throughout the Commonwealth. The program will subsidize the production and purchase of homes restricted to moderate-income homebuyers with incomes set anywhere between 70 percent to 120 percent of their Area Median Income (AMI).
MassHousing’s Homeownership Division will also support CommonWealth Builder with a combination of mortgage financing for homebuyers, down payment assistance loans, mortgage insurance with job-loss protection at no added cost, and targeted marketing in the Gateway Cities to ensure that borrowers of color are made aware of this new opportunity for homeownership.
As of January 1, 2021, MassHousing has 22 projects in its CommonWealth Builder pipeline, representing $48.5 million in financing demand.
The Commonwealth’s Gateway Cities are Attleboro, Barnstable, Brockton, Chelsea, Chicopee, Everett, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Leominster, Lowell, Lynn, Malden, Methuen, New Bedford, Peabody, Pittsfield, Quincy, Revere, Salem, Springfield, Taunton, Westfield and Worcester.
