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On a quiet side street in St. Paul's Midway neighborhood, Phillip Ward was unpacking boxes and arranging furniture in the tan stucco house he closed on last week.

Ward is a lifelong St. Paul resident, but neither he nor his parents have ever owned a home. Buying a place means stability, he said.

"Something to call my own. Something to have a stake in the community, have a voice," Ward said.

Homeownership seemed out of reach, he said, especially after getting out of prison in 2007 and living in public housing. As a renter, Ward said, his housing costs started rising and he started to look into what it would take to buy a home.

Saving up for a down payment took years of careful budgeting and scrimping, he said, and he qualified for a range of programs for first-time buyers after taking homeownership classes — including a new program the Legislature funded in 2023 to loan down payment assistance to buyers who had never owned a home and whose parents did not own their homes either, or who lost their homes to foreclosure.

Ward's moving-in process was interrupted Monday afternoon by Lt. Gov. Peggy Flanagan and DFL legislators who stopped by to celebrate Ward as a recipient of the new loan program, and to highlight the new program.

"There is a lot of opportunity and a lot of support out there," Flanagan said of programs for first-time buyers.

Phillip Ward, left, welcomes Lt. Gov. Peggy Flanagan to his new home.
Phillip Ward, left, welcomes Lt. Gov. Peggy Flanagan to his new home.

Elizabeth Flores, Star Tribune

The $150 million fund provides up to 10% of the home's purchase price, up to $32,000, in down payment assistance to eligible homebuyers across the state, aiding up to 4,500 buyers. The money comes to buyers as a zero-interest loan forgiven after five years, so long as the buyer lives in the home as a primary residence.

Flanagan, who herself bought her first home last fall, said her daughter was excited to be able to be able to paint her bedroom lime green after years of living in rentals where there were lots of rules around paint. She thought about the 4,500 families who will have similar stories.

Since applications opened in May, the program has sent $14 million to over 400 first-generation homebuyers. About 80% of those buyers are people of color, according to a Minnesota Housing spokesperson.

The state-funded program adds to a portfolio of programs meant to help Minnesota buyers with down payments. According to a database maintained by Freddie Mac, Minnesota has 35 other down payment assistance programs. Many of the programs target first-generation homebuyers, and Black families who were historically blocked from homeownership or lost their family homes to foreclosure, especially after the 2008 subprime mortgage crisis.

Minnesota has one of the largest racial disparities in homeownership in the country. Nearly 78% of white Minnesotans are homeowners, while less than a third of Black residents own a home, according to the 2021 data from the U.S. Census Bureau — making Black residents the least likely of any racial group in Minnesota to own a home. Only 12 states have a bigger gulf between white and Black homeownership rates.

Ward and his father, Patrick Preston said navigating the homebuying process was challenging.

"It was a whole balance beam, and at times if felt like a dice roll," Ward said. But, Preston said, "Each hurdle became easier to get past and jump."

Now settling in, the two are turning their eyes to future projects around the house: Ward wants to add a shower to a half-bathroom, and Preston can't wait to start working in the garden.