Wells Fargo announced on Tuesday a $60 billion lending commitment to create at least 250,000 African American homeowners by 2027, directly addressing the lower homeownership rates in the African American community.
The financial commitment serves to help a community that is slated to significantly increase. According to the U.S. Census Bureau, by the year 2024, 75% of the expected 14 million new households (renters and owners) in the U.S. will be diverse.
And of this amount, African Americans are projected to represent 17%, or the third largest segment, of the new households.
Wells Fargo said that through the commitment it plans to:
- Lend $60 billion to qualified African American consumers for home purchases by 2027
- Increase the diversity of the Wells Fargo Home Lending sales team
- Support the effort with $15 million to support a variety of initiatives that promote financial education and counseling over the next ten years.
The National Association of Real Estate Brokers (composed of African American real estate professionals), which has also set a homeownership goal, and two of the nation’s most influential civil rights organizations, the NAACP and the National Urban League, are also working alongside Wells Fargo.
“Wells Fargo’s $60 billion lending goal can contribute to economic growth by making responsible homeownership possible for more African Americans in communities across the country,” said Brad Blackwell, executive vice president and head of housing policy and homeownership growth strategies for Wells Fargo.
“NAREB applauds Wells Fargo’s $60 billion loan commitment. The bank is the first financial institution to acknowledge publicly Black Americans’ wealth-building potential which could be greatly improved through homeownership,” said Ron Cooper, president, National Association of Real Estate Brokers.
“NAREB welcomes their entry into the struggle to close the ever-widening wealth gap for Black Americans, and looks forward to having Wells Fargo as a partner in NAREB’s ‘2 Million New Black Homeowners in 5 Years’ program,” he continued.
Wells Fargo’s $60 million commitment follows its 2015 announcement to help increase Hispanic homeownership. At the time, Wells Fargo Home Mortgage said it aimed originate $125 billion over the next 10 years in order to assist in the National Association of Hispanic Real Estate Professionals’ Hispanic Wealth Project, which seeks to triple Hispanic household wealth over the next decade.
While Wells Fargo’s lending commitment is spread out over ten years, according to a recent interview with Raphael Bostic, a professor at the Sol Price School of Public Policy at the University of Southern California, America is projected to become drastically more diverse over the next several decades.
“The Census Bureau has a projection that America will be 100 million people more in the next 45 years,” said Bostic. “And if you break down where the growth is coming, it’s coming with African American families, it’s coming with Asian families, and it’s coming with Latino families. What we will have at the end of that period is the most diverse country that we’ve ever seen. It really won’t make sense to talk about minorities since there will be pluralities of everyone.”