Boston, Massachusetts – In response to the pressing issue of the racial wealth gap, the Federal Home Loan Bank of Boston introduced its innovative “Lift Up Homeownership” program, designed to support families of color in achieving homeownership and narrowing economic divides within communities. The program offers grants of up to $50,000 for down payments and closing costs to mortgage applicants earning up to 120 percent of the median income in the six New England states the bank serves.
Kenneth A. Willis, the bank’s first vice president for housing and community investment, spearheaded the initiative in the wake of George Floyd’s tragic death in 2020. He recognized the need for financial institutions to address social tensions and work toward economic equality.
The program quickly reached its full subscription within months of its launch, with approximately 50 households now awaiting the closing on their new homes. The success of this pilot program has encouraged its continuation.
Willis’s research led him to the concept of “Special Purpose Credit Programs,” authorized by the Equal Credit Opportunity Act of 1974. These programs allow for grants to benefit economically disadvantaged groups while remaining compliant with recent court rulings limiting the reach of affirmative action.
The “Lift Up Homeownership” initiative is the only program of its kind within the Federal Home Loan Bank system, a cooperative of 11 privately capitalized regional banks formed by Congress during the Great Depression. As the Boston bank considers making the program permanent, banks in other regions are looking at its model for potential replication.
Timothy J. Barrett, President and CEO of the Federal Home Loan Bank of Boston, stated that “Lift Up Homeownership” addresses key obstacles faced by people of color when it comes to purchasing a home, particularly the challenges of insufficient cash reserves and down payments.
This focus on boosting Black homeownership to reduce the racial wealth gap gained further attention in October with the appointment of Courtney Brunson to lead the Boston Foundation’s Wealth Gap Partnership initiative. The initiative aims to increase the supply of affordable housing, expand down-payment assistance, and improve access to affordable mortgages. Brunson, a Harvard Law graduate and former staffer for U.S. Senator Elizabeth Warren, will coordinate the efforts of a 30-plus member group to develop strategies for these objectives.
With initiatives like “Lift Up Homeownership” and the Wealth Gap Partnership, Boston-based organizations and institutions are taking significant steps toward addressing the racial wealth gap and fostering more equitable homeownership opportunities.
