Milwaukee-based Acts Housing supported a record 305 home purchases last year, nearly half of which were made by Black homeowners.
The nonprofit organization exceeded its goal of assisting 250 new owner occupants in 2021 and surpassed its previous record of 183. Acts helps prospective homebuyers in Milwaukee and Beloit who have income, credit, language and other barriers by providing financial and homebuyer coaching, real estate brokerage services, rehab coaching, loans and grants and post-closing services.
Michael Gosman, president and chief executive officer of Acts, attributes last year’s gains in homeownership to a few factors.
Lockdowns during the COVID-19 pandemic played a role. For many renters, the experience of being at home, in many cases with children doing school virtually, had them reevaluating their living situations.
“All the things you might not have liked about your apartment situation, they became big problems,” Gosman said. “And I think we’ll continue to see demand even though fewer people are working from home that we serve and fewer kids are learning virtually. Having that experience definitely colors the way you think about your space.”
At the same time, for those who were able to maintain their employment, the pandemic created favorable financial conditions to move toward homeownership. Reduced spending paired with government stimulus allowed some renters to dedicate funds to paying down debt and making larger down payments, Gosman said.
The City of Milwaukee also rolled out a new down-payment assistance program last year, dedicating $1.4 million to provide forgivable grants of up to $7,000 to eligible homebuyers in the city.
“It’s been a real game-changer,” Gosman said, noting that the payments helped families who were already working with Acts to repair their credit and attain a mortgage loan.
“It’s reaching many of the families that have all the barriers to homeownership that you might think would exist in the community that don’t have the same wealth or access to capital,” Gosman added. “We’re thrilled with the results.”
Over the past 15 years, homeownership has declined in Milwaukee, from almost 50% in 2005 to 40% in 2019, according to a 2021 Wisconsin Policy Forum report. That rate is lower among the city’s Black households, at 27%, compared to 37.5% of Hispanic households and 56% of white households.
Acts is chipping away at those trends. Forty-eight percent of Acts’ 305 new homeowners last year were Black families. That’s up from 57 Black families purchasing homes through the organization in 2020.
The organization has made a push to increase its outreach to Black residents in recent years, Gosman said.
“There is a real trust gap that exists in our community generally, and especially around something like housing, where there are so many housing scams,” he said.
Targeted digital and radio advertising has helped, along with word-of-mouth referrals from alumni, of which Acts has roughly 3,200.
Acts has found success moving most of its services online since 2020, Gosman said. At first, it was a pandemic necessity, but soon leaders discovered families showed a preference for the convenience of meeting online. It has also eliminated logistical hurdles like transportation and childcare.
More than 3,000 families attended an online Acts orientation in 2021 compared to fewer than 1,000 who attended in person in 2019. Its no-show rate is half of what it was two years ago, Gosman said.
Acts has a goal to again exceed 300 new homeowners this year and plans to add 12 employees to its current 23-person team.
“We know that we have not scratched the surface of families of all backgrounds who are low- to moderate-income who would be excited to pursue homeownership if they knew there was a path for them to go down,” Gosman said.
Low inventory of affordable homes, however, remains a challenge. The sale price of homes purchased by Acts families rose between 15-20% from 2020 and 2021.
“The homes listed on the market — there aren’t that many; inventory is at close to historic lows, and the pricing is competitive,” Gosman said.
Gosman also noted a growing trend of real estate wholesaling in neighborhoods with distressed or affordable homes, a practice that allows out-of-state investors to buy homes faster than prospective homebuyers can.
He said Acts is working to level the playing field to ensure more homeowners have an opportunity to purchase those properties for owner occupancy.
It’s working in tandem with the Community Development Alliance, a coalition of affordable housing funders that has identified the need for 32,000 additional Black and Latino homeowners in Milwaukee and 32,000 rental units for families making $7.25-$15 per hour.
CDA’s plan calls for the creation of an acquisition fund, a locally controlled pool of money, for acquiring properties, to give local homebuyers greater opportunity to buy properties.
