ImpactAlpha, November 15 — Making a down payment is one the biggest challenges for first-time homebuyers in the U.S., particularly for Black and Latino Americans.
Denver-based Dearfield Fund for Black Wealth is looking to raise up to $30 million to help more than 500 Black families in Denver purchase their first home. The company secured $7.5 million in a first close from the Robert Wood Johnson Foundation, Gary Community Ventures, Gates Family Foundation, Denver Foundation and The Colorado Trust.
Dearfield Fund has provided $3.8 million in interest-free down payment assistance loans to more than 100 local Black families to purchase their first homes. The place-based impact fund takes it a step further, creating a homeownership support program to help borrowers keep their homes until they sell or refinance.
“We’re not trying to just put capital on the street,” Dearfield’s Aisha Weeks told ImpactAlpha. “We’re partnering with homeowners throughout their homeownership journey for wealth creation.” Weeks said the fund has helped borrowers each build $10,000 in wealth over the past year through appreciation in the value of families’ homes. The average cost of Dearfield’s borrowers homes is $354,000.
Inclusive lending
How it works: Dearfield provides loans of up to $40,000. Partners including Elevations Credit Union, One Tap Credit Union, Impact Development Fund and Huntington Bank bring in additional grant capital to increase purchasing power for borrowers. Upon selling or refinancing, borrowers pay back the original amount of the down payment loan and 5% of the home’s appreciated value. “We anticipate a five-to-seven year hold period before a homebuyer chooses to refinance or sell,” Weeks said.
Place-based investing
Weeks said Dearfield is out to prove out that the model is replicable. “We want to see this model replicated nationally in partnership with cities, governments and other entities interested in launching a fund for Black homeownership in their cities.”
