Co-Equity and Support Programs for Black Homebuyers Tackle Historic Homeownership Gaps

Why the Gap Persists

According to the National Association of Realtors' 2023 Snapshot of Race and Home Buying in America report, the Black homeownership rate stood at 44%, compared with 72.7% for white households — a roughly 28-point gap that the association noted was wider than it had been a decade earlier. The Urban Institute has published similar findings, tracing much of the disparity to 20th-century federal policy (including FHA underwriting practices and HOLC "redlining" maps that steered mortgage capital away from Black neighborhoods) and to continuing headwinds such as lower rates of inherited wealth, higher student debt burdens, and documented appraisal bias.

Federal research has confirmed the appraisal issue in particular. A 2021 Freddie Mac study ("Racial and Ethnic Valuation Gaps in Home Purchase Appraisals") found that homes in majority-Black census tracts were more likely to receive appraisals below the contract price than homes in majority-white tracts. In 2022 the Biden administration's interagency PAVE Task Force (Property Appraisal and Valuation Equity) issued an action plan aimed at reducing bias in the valuation process.

What "Co-Equity" and Shared-Equity Programs Are

Shared-equity — sometimes marketed as "co-equity" or "co-investment" homeownership — is an umbrella term for models in which a public agency, nonprofit, or mission-aligned investor contributes part of the purchase price in exchange for a share of future appreciation. The buyer holds title and builds equity, but resale terms are designed to preserve affordability for the next income-qualified household.

The Grounded Solutions Network, a national nonprofit that supports community land trusts (CLTs) and shared-equity programs, maintains a directory of member organizations across the country. Common structures include:

• Community Land Trusts (CLTs): The trust retains ownership of the land while the homeowner owns the building, with a long-term ground lease and a resale formula.
• Deed-restricted resale programs: A covenant caps the resale price so the unit remains affordable.
• Shared-appreciation loans: A silent second mortgage from a public or philanthropic source is repaid with a portion of appreciation at sale or refinance.

These programs are race-neutral on paper but are frequently targeted — through marketing, counseling partnerships, and geographic focus — to communities that were historically shut out of mortgage credit.

Programs Focused on Black Homebuyers

Several well-established initiatives work specifically to close the Black homeownership gap:

• NAREB's 2 Million New Black Homeowner Program (2MN5). The National Association of Real Estate Brokers, founded in 1947, launched 2MN5 with the goal of creating two million net new Black homeowners in five years through counseling, lender partnerships, and down payment assistance referrals.
• HUD-approved housing counseling agencies. The U.S. Department of Housing and Urban Development funds a network of nonprofit counseling agencies — many Black-led, such as affiliates of the National Urban League and Operation HOPE — that provide free pre-purchase education and help buyers stack DPA resources.
• Special Purpose Credit Programs (SPCPs). Authorized under the Equal Credit Opportunity Act, SPCPs let lenders design credit products for economically disadvantaged groups. Since 2022, Bank of America, JPMorgan Chase, Wells Fargo, and others have announced SPCPs offering grants or reduced-cost mortgages in majority-minority neighborhoods; program terms and geographies vary and should be verified directly with the lender.
• State and city DPA with equity focus. Programs such as Philadelphia's Philly First Home, the California Dream For All shared-appreciation loan, and assistance administered by state Housing Finance Agencies are often layered with CLT purchases to stretch affordability.

How to Evaluate a Program

Before committing, buyers should ask:

1. How is the subsidy repaid? A deferred, forgivable grant behaves very differently from a shared-appreciation loan.
2. What are the resale restrictions? CLT and deed-restricted homes build equity more slowly by design.
3. Is the counselor HUD-approved? HUD maintains a public lookup tool at hud.gov.
4. Can assistance be stacked? Many buyers combine a state DPA, an employer benefit, and a lender SPCP.

No single program erases a gap built over a century, but stacking counseling, shared-equity purchase options, and targeted credit products gives today's Black first-time buyers tools that did not exist a generation ago.

Sources

• National Association of Realtors, 2023 Snapshot of Race and Home Buying in America
• Urban Institute, research on the racial homeownership gap
• Freddie Mac, Racial and Ethnic Valuation Gaps in Home Purchase Appraisals (2021)
• White House PAVE Task Force Action Plan (2022)
• Grounded Solutions Network, shared-equity program directory
• National Association of Real Estate Brokers (NAREB), 2MN5 initiative
• HUD, Housing Counseling Program
• CFPB guidance on Special Purpose Credit Programs