Four months after announcing its $30 billion Path Forward plan, Chase Bank is making good on its promise to increase the number of mortgage originations and refinances in majority Black communities across the United States by expanding its Homebuyer Grant program.
Launched in 2018, the program was available in 40 low-to-moderate-income communities and provided a $2,500 grant for qualified homebuyers who applied for a mortgage through Chase and completed education classes. Now, Chase has increased the grant to $5,000 and shifted the focus to raising the homeownership rate for Black Americans, which lags behind at 42 percent.
“This grant is a positive step in helping to stabilize and revitalize communities across the country,” Chase Head of Community and Affordable Lending Cerita Battles said in a written statement. “We’ve hired more people to reach Black and Latinx communities and are redesigning our mortgages to help more families achieve homeownership.”
The grant will be available to qualified buyers in 6,700 communities the Census Bureau has deemed as majority Black. Recipients must apply for a DreaMaker, Standard Agency, FHA or VA mortgage through Chase, and must be securing a loan for a primary residence. The funds can only be used to cover a down payment or closing costs, and buyers can receive an additional $500 after completing a DreaMaker homebuyer education class.
In an emailed statement, a Chase spokesperson said the grant expansion is an integral part of the company’s Path Forward commitment and the increased grant amount is to reflect “the racial wealth gap” that keeps minorities from pursuing homeownership.
“This latest grant expansion is part of the $30B Path Forward commitment that we announced last year to help close the racial wealth gap,” the spokesperson said. “Beyond this, we also offer additional assistance programs, including the Chase Homebuyer Advantage Program, Chase Closing Guarantee, and Chase DreaMaker.”
“We are constantly working on new tools and programs to assist buyers in the home lending process,” they added. “Given the success of the original grant, we wanted to expand this program as we continue our work with promoting homeownership in underserved communities.”
The bank and mortgage industries were in the hot seat last year as conversations about systemic racism placed a magnifying glass on former redlining practices, disproportionately high mortgage denial rates and lackluster mortgage offerings for Black homebuyers across income levels.
“There are a lot of different things, I would say, that lenders can do to support this effort,” Battles told MSNBC of the Black community’s distrust of the financial industry. “We have to make sure that we’re hiring people that mirror the markets we’re seeking to serve.”
“It is important for us to make sure that we have folks that are out there that can cultivate relationships and win the trust and consideration of these customers and these communities,” Battles added.
Although these programs do a lot of good, as evidenced by grant recipient Marcia Hernandez’s comment to MSNBC about the $5,000 “[securing her] from worrying in the future,” there are still concerns.
With similar initiatives intended to help minority and low-income Americans, such as former President Trump’s Opportunity Zones program, white and wealthier homebuyers ended up benefitting more than the people it was intended for.
“The incentives were intended to foster equitable development outcomes — such as by creating quality jobs, affordable housing, community-oriented amenities like grocery stores, and improved quality of life for low-income people,” the Urban Institute said in its 2020 evaluation of the program. “Our evidence suggests they need to be redesigned so government dollars are allocated effectively and help project sponsors achieve those outcomes.”
When asked about ensuring the outcome of the Homebuyer Grant matched the intent, Chase’s spokesperson told Inman: “This grant is a positive step in helping to stabilize and revitalize historically underserved communities across the country. With this program, our goal is to ensure those that are most likely to face homebuying barriers benefit from it.”
The spokesperson said Chase is encouraging grant recipients to take advantage of the company’s online learning center to learn financial tips for homeowners, such as how to finance a renovation or how to refinance a loan.