African Americans have always trailed whites as home owners. Since 1995, the percentage of African American homeowners in the United States has trailed the percentage of white homeowners by 26% or more–a problem that many believe contributes to the wealth disparity between the two races. BLACK ENTERPRISE and General Electric Mortgage Insurance have entered into an ambitious partnership aimed at increasing the number of African American homeowners nationwide, and educating African Americans about the value of using home ownership as a gateway to wealth.
"There is an unacceptable home ownership gap between white and African American households in this country, and too little is being done about it," says Tom Mann, president and CEO of GE Mortgage Insurance. "Home ownership is a major step in wealth accumulation, and we want to help more African Americans take that step."
The plan to get more African Americans into homes will be incorporated into the existing Black Wealth Initiative (call 877-WEALTHY for a Wealth Building kit) that BE began more than two years ago. Lisa Salley, vice president of New Markets for GE Mortgage Insurance, says the emphasis will be on education — providing live workshops and tools for people to do financial self-assessments, and then making access to mortgage loans easier. BE will sponsor events where home ownership will be emphasized, and also provide Internet access to mortgage calculation tools and mortgage applications from GE and its lending partners.
"Every individual ought to have a personal home ownership strategy," says Salley. She explains that individuals can use their home to qualify for tax advantages that help build wealth, as an investment vehicle, or as leverage to obtain other things they want out of life (such as using home equity to pay for education.)
Unfortunately, Salley says, many people have misconceptions about mortgages that prevent them from obtaining homes. These include the feeling that 20% down is required for a home mortgage, or that mortgage insurance is a government program for low-income people.
Lawrence Cooke, vice president, and national advertising director for BE, says the collaboration between BE and GE is great for everyone involved. It allows GE to extend its mortgage products into the underserved African American market; it allows BE to service its core audience with a product that actually delivers economic empowerment; and it allows African American consumers greater access to home ownership than before. "This effort will say to our audience: This is important. The time to do this is now, and it’s well within your reach," says Cooke. For more information, log on to blackenterprise.com.