Twin Cities Habitat for Humanity is more than just a nonprofit business that helps the working poor achieve home ownership.
It's also a $30 million-plus enterprise, one of the Twin Cities faster-growing housing developers that boasts a time-tested business strategy and compelling buyers.
On their third try in several years, nursing student Warda Hussein, and her mother, Mana Sharif-Hassan, a school bus driver, qualified to buy a new St. Paul house, thanks to Twin Cities Habitat for Humanity.
They moved into the three-bedroom home in June. It's one of 11 stylish, energy-efficient single-family homes that Habitat has developed on Maryland Avenue in St. Paul's North End that fronts a 23-acre woodland known as Willow Reserve.
"My mom always worked, first as a translator and then as a bus driver," said Hussein, 22, who is finishing a master's degree in nursing at the University of Minnesota. "We lived in a rent-subsidized apartment in Minneapolis. It was fine. But I always wanted to live somewhere where I could paint the walls."
Habitat is a growing builder in a slowing industry.
Yet Habitat sold 88 homes in fiscal 2022 and kept nearly 70 other low-income and elderly owners in their homes thanks to its low-cost painting and renovation services. Habitat plans to close on 129 homes in fiscal 2023 ending next June and 150 homes annually within a couple years.
Habitat's new-house production ranks it among the area's dozen-largest developer-builders, based on the 2021 rankings by trade group Housing First Minnesota.
Habitat's mission: build homeownership and equity disproportionately among those historically denied homeownership due to too little income, redlining or otherwise. And that contributes to the well-documented "equity gap" among Twin Cities-area Black families. Homeownership traditionally has been critical for modest-income families to build wealth.
"If we are going to resolve housing inequities in this community, everybody needs to step forward," said Twin Cities Habitat CEO Chris Coleman. "If we don't, we won't have a chance to build generational wealth. And not just in the core cities."
Minnesota has wide racial disparities in homeownership: 77% of white households own homes compared with 42% of households of color, including only 25% of Black households. Households of color make up 85% of Habitat buyers. They typically earn about 60% of the Twin Cities-area median household income of about $80,000.
Habitat's growth is fueled increasingly by Bremer Bank, which has acquired about $100 million in Habitat mortgages at below-market interest rates since 2017, benefiting 500 buyers and making "important inroads to address our state's wide racial disparity gaps in homeownership," Bremer CEO Jeanne Crain said. "This is also good business."
St. Paul-based Bremer recently committed to buy an additional $125 million in below-market-rate mortgages over three years. Crain called Habitat mortgages "a very high-performing portfolio," with less than 2% delinquencies and virtually no foreclosures.
Habitat helps buyers cap mortgage payments at 30% of monthly income. The Hussein-Hassan household qualified with an income under $40,000 in 2021.
Hussein, who worked her way through college, has a $124,000 mortgage with monthly payments under $1,000 on a house valued at $280,000.
Habitat provided a grant of $116,000. But it must be partially and proportionately repaid to Habitat if the house is sold within 30 years. Hussein also has a third, no-interest loan on the house for $40,000.
Habitat had revenue of $31.3 million last year, including home sales and nearly $19 million from grants and contributions that enabled it to write-down mortgages. It also received a $13.5 million grant this year from philanthropist MacKenzie Scott that Coleman called a "game-changer" opportunity to advance long-term Black homeownership.
Habitat homeowners also participate in rigorous financial planning, budgeting and home-ownership classes. That grant will leverage 10-times that amount in credit.
"Habitat was kind to work with us," said Warda, who begins her nursing career in 2023. "We worked a year to get our home. And to sleep in a place that is yours is satisfying."
Meanwhile in north Minneapolis, Habitat and partner City of Lakes Community Land Trust are about to begin construction of 17 affordable townhomes at 219 James Av. N.
Jeff Washburne, executive director of City of Lakes, is seeking buyers who make up to 60% of area median income, particularly renters in the low-income Harrison Neighborhood.
Washburne said partnering with Habitat lowers costs and increases clout.
"We don't have the money in our bank account for a project of this size," Washburne said. "And the reputational credibility we get by partnering with Habitat and tapping their finances will help our buyers and add credibility to the project.''
Habitat also broke ground on a project in Minnetonka recently.
Our economy needs more workers. Minorities for years have driven Minnesota's workforce growth. They deserve to earn the opportunity of homeownership.