“Wealth begets wealth”: Denver nonprofit combats racial disparities through homeownership

Natalie Gentry, a former journalist and social worker living in Denver, moved eight times between 2009 and 2022. The moves came on the heels of her divorce in 2009, forcing Gentry to start her life over again. That meant rebuilding the massage therapy business she had taken a step back from while dealing with fertility issues and marital problems in the years before her divorce.

As Gentry built up her massage therapy business and started saving money, hoping to buy a home in the Denver area, housing prices began skyrocketing. So, she kept renting. Meanwhile, rents were rising, too. Gentry moved into a friend’s place and stayed for a year, and then she moved to another place where she was immediately charged $300 more per month than the previous tenant. After a year, the landlord raised the rent by another $300.

The cycle continued. Whether because the rent went up too much or the apartment sold, Gentry found herself moving from place to place at a rate of almost once a year. Finally, after her eighth move, she’d had enough. She wanted to focus on her business but constantly wondered and worried about where she would land next. The financial costs associated with moving all the time were beginning to add up, too.

“I just realized that I couldn’t do it anymore,” she said. “I couldn’t just continue jumping all over the place because it’s a huge life disruption to have to move over and over and over again.”

Funding to help Black Coloradans with home ownership

In the U.S., owning a home is a primary means of accumulating wealth. Yet, for generations, racism has drastically affected the ability of many Americans to do so.

For Black Coloradans like Gentry, the chances of buying a home are far lower, a result of the long history of slavery and racially discriminatory lending practices and housing policies in the U.S. In Colorado, for instance, only 30% of Black people can afford to purchase a home, compared to 48% of whites (and 32% of Latinos).

Gentry phoned a friend who worked as a Realtor and began looking at homes. One place, a 400-square-foot affordable housing condo unit, cost $205,000, but Gentry didn’t have enough savings for the 20% down payment.

As she left the building, Gentry heard somebody mention an organization that helped first-time Black homeowners make down payments: The Dearfield Fund for Black Wealth, administered through Gary Community Ventures, a Denver-based philanthropic foundation. Gentry applied and moved into her new condo in 2022, one of the 219 homes purchased by first-time Black homeowners through the fund since its launch in 2021.

The Dearfield Fund is named after the first Black homestead community in Colorado, established in 1910 near Greeley. It aims to help close the racial wealth gap by allowing more Black Coloradans to buy their first homes. The program channels the ethos of the community’s founder, Oliver Toussaint Jackson, who believed land ownership was critical for Black people to realize the American Dream. The Colorado Trust gave $1 million to support the Dearfield Fund in 2021.

In the three years since the Dearfield Fund began operating, it has distributed more than $8.2 million in down-payment assistance, helping Black homeowners who purchase a house through the fund reach an estimated $133,000 net worth after 5-7 years of homeownership.

“If policies from decades ago were really explicit on denying homeownership on the basis of race, then we believe that the solution also has to really call out race and design products that are targeted to the communities most in need,” said Aisha Weeks, the Dearfield Fund’s managing director.

Closing the racial wealth gap

Motivated by the understanding that a race-specific problem requires a race-specific solution, Weeks noted that the Dearfield Fund’s work is more critical than ever. Nationwide, the racial wealth gap is widening, with the current median household wealth of a white family sitting at $285,000, while that of a Black family is just $44,890. In other words, for every $100 in wealth held by white households, Black households hold just $15.

More troubling still, in the last three decades, median Black family wealth in the U.S. dropped by more than 50% after inflation, compared to a 33% increase for the median white household during the same period. According to Institute for Policy Studies researchers, if current trends continue, by 2053, the median wealth of Black Americans could fall to zero.

These days, buying a home in Colorado is tough for anyone. As of April 2024, the median sale price in Colorado was $621,800, a 7.4% increase from the previous year, making it one of the most expensive states to live in. But the barriers are even greater for Black people, particularly first-time homebuyers like Gentry.

In 1933, amid the Great Depression, the federal government created the Home Owners’ Loan Corporation to help people who were defaulting on their mortgages. Bankers would draw up maps that shaded neighborhoods based on their racial makeup and property values and then deny loans to low-income people of color in those areas. That practice, known as redlining, technically lasted until 1968, when the Fair Housing Act banned racial discrimination in the housing industry.

Meanwhile, the Federal Housing Administration was subsidizing builders who were mass-producing subdivisions for whites — with the requirement that none of the homes be sold to Black people. Those and other exclusionary housing policies, such as discriminatory lending and home appraisal practices, have pushed Black people out of the housing market for decades, affecting not only their ability to buy a home today but creating long-term and wide-ranging health, environmental and income disparities.

In Colorado, Black mortgage applicants are turned down almost twice as often as white applicants, according to a Zillow analysis in 2022. A 2018 Brookings Institution study found that in the average U.S. metro area, homes in neighborhoods where the population is at least 50% Black are valued at roughly half the price of homes in communities with no Black people. In other words, structural racism reduces housing wealth for these Black homeowners by an average of $48,000 per family.

Over time, the summative effect of these practices has made it impossible for many Black families to accumulate the kind of intergenerational wealth that helps them afford a down payment on a home. According to Gary Community Ventures, the Dearfield Fund’s parent organization, about 93% of Black families with the credit scores and incomes to qualify for a home loan do not move on to purchase homes because they lack the cash needed for the down payments.

“Wealth begets wealth,” Weeks said. She noted that during the New Deal era, the newly created mortgage loan system gave white families without access to capital a way of financing a home — but not Black families.

“Think about that opportunity for that generation, and then the next generation, who could reach back to their parents for help purchasing a home in the form of a down payment or other assets, right? That just continues from generation to generation,” she said.

By focusing on down-payment assistance, the Dearfield Fund founders sought to correct the legacy of discrimination and the resulting wealth gap that keeps Black people from entering the housing market today. To get the word out, representatives from the Dearfield Fund attend community events in the Denver metro area and set up tables at Juneteenth festivals more often than they advertise in banks, partly because research shows that some Black people are still distrustful of financial services.

Prospective homebuyers must first qualify for a mortgage with a Dearfield Fund lending partner. The fund then offers up to 15% of the home’s purchase price in cash, maxing out at $40,000, effectively lowering the monthly mortgage payment (the more money a borrower can put toward a house upfront, the lower the mortgage interest rate).

The down-payment assistance works like a loan, but homeowners do not make monthly payments and pay no interest. Instead, when a homeowner sells a house or refinances, the owner repays the down payment plus 5% of the home’s appreciation, allowing the Dearfield Fund to help more Black homeowners.

Gaining more than monetary benefits

Among the more than 200 new homebuyers that have worked with the Dearfield Fund since its launch, Weeks has noticed that the benefits of owning a home went beyond wealth creation. People tell her about gaining a new sense of peace and stability that has opened up opportunities in their lives.

Take Myria Giles. For much of her adult life, she felt like she had nothing that truly belonged to her. Giles married young, and her husband’s career in the military meant they moved every few years.

“I didn’t own the kitchen. I didn’t own the cabinets. I had to abide by not only the military rules and military housing but my husband’s rules,” Giles said in an interview for the Dearfield Fund’s 2024 Impact Report. After divorcing at 60 and surviving cancer, she was able to buy a home through the Dearfield Fund.

Becoming a homeowner changed everything for Giles. She felt newly self-sufficient and independent—like she could live life on her terms.

“Any decision I make, I can make it just for me,” she said.

“Often, we just think about the monetary benefit [of homeownership],” said Weeks. “But we don’t think about how it impacts a person’s emotional or even mental health not bouncing around from place to place.”

Like Giles, Nahjee Maybin moved every few years while his dad was in the military. Now a father to three young children, he and his wife, Neecie, were eager to start establishing a stable home and wealth they could pass on to their kids. Last year, the Maybins bought their first home in Aurora.

“Rather than being in a place of insecurity, it allows us to think about what’s next,” said Nahjee Maybin in an interview for the impact report, adding that the security of owning a home means he can afford to run his business more boldly. “We can try something and we can take financial risks that might lead to growth.”

“A huge exhale”

For Gentry, owning a home has been “a huge exhale,” she said. “I know what my mortgage is going to be. I know what my HOA fees are going to be. I know what my taxes are likely to be… and I can handle that.”

Though small in space, the home has allowed her to expand other areas of her life, giving her a sense of rootedness and community that was hard to build in the years she spent constantly moving. A month after Gentry moved into the condo unit, she heard music playing outside the building. She saw a parade across the street, part of a neighborhood initiative called the Black Arts Festival. Gentry got so excited that she decided that when it came around next, she would rally a group of neighbors from her building to watch the parade together.

Before buying her condo, home meant just having a place to dump her stuff, where she would wait until she had to move again. Now, home means building relationships with neighbors. It means creating “a space that feels like me,” she said.

Freelance journalist Sarah Tory wrote this story for The Colorado Trust. It first appeared at coloradotrust.org on Dec. 4, 2024, and can be read in Spanish at collective.coloradotrust.org/es. The Colorado Trust is a philanthropic foundation that works on health equity issues statewide and previously funded a reporting position at The Colorado Sun.