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City wins grant to expand financial counseling
Racine

City wins grant to expand financial counseling

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RACINE — Before Dasheika Kidd became the program manager at Housing Resources Inc., she was working a high-paying job in the corporate sector.

Kidd, who is born and raised in Racine, grew up under fortunate circumstances: when she bought her first house at 27, she was a third-generation home owner. From the age of 5, she knew she was going to go to college.

Those circumstances are particularly uncommon among African American families. According to a 2017 report from the Federal Reserve, on average black families possess less than 15% the wealth of white families; Latin American families on average own slightly more. These disparities are a result of a long history of policies that barred minorities from accessing credit for buying cars, starting businesses or buying homes, often explicitly because of their race.

When her grandmother was dying, she told Kidd she needed to do what she could to help the community.

“She told me that I needed to pay it forward,” said Kidd. “I feel like I have to make her proud in heaven because I made that promise to her and that’s why I decided to change my career and come into nonprofits and come into a position that I can actually see an impact in the community.”

In September 2015, Kidd took a job as a home ownership counselor at HRI, working with people to get their finances in order before they purchase a home. When the program manager retired little over a year ago, she stepped into that position.

Now, with a new partnership with the City of Racine and a grant from Cities for Financial Empowerment (CFE), HRI is planning on expanding its financial counseling beyond potential homeowners.

By teaching more people about credit, credit scores and the mechanics of finance, Kidd hopes they will gain control of their finances, build up savings and improve their credit so they can access better jobs, apartments and, someday, maybe even buy a home.

Financial Empowerment Center

Racine is one of six cities selected the CFE grant. As of Monday, CFE had not announced which cities were also awarded the grant.

The first stage includes a $20,000 planning grant and access to training and resources for implementing what CFE calls a financial empowerment center, which has to be run in partnership with a nonprofit.

This week Kidd and other HRI staff and city staff are scheduled to attend a conference and training in New York City that will include representatives from the other cities chosen for 2019, experts from CFE and previous grant winners who are currently running empowerment centers.

HRI and the city are to submit an implementation plan and raise up to $150,000 to receive a matching grant by July 31, 2020. After the first year of implementation, the city is eligible for a 1:2 match up to $100,000, meaning if the city manages to raise the full amount it would receive $200,000 to continue running the center.

While they have not started the planning process yet, Kidd foresees the grant allowing them to hire another financial counselor in order to expand their capacity to work with clients.

Last week, the City Council’s Finance and Personnel Committee recommended the full council approve the memorandum of understanding between the city and CFE. It is scheduled to go before the council at its meeting at 7 p.m. on Tuesday, Oct. 15, at City Hall, 730 Washington Ave., Room 205.

The barriers

On June 24, Vicky Selkowe, the city’s manager of strategic initiatives and community partnerships; Matt Rejc, manager of neighborhood services; and Mayor Cory Mason held a lender’s roundtable during which they invited local lenders to discuss some of the current barriers to home ownership.

According to the Consumer Finance Protection Bureau, in 2017, of the 3,569 Racine residents who applied for conventional mortgages, 3,245 were white, 132 were black, 50 were Asian, indigenous or Pacific Islander and 142 were an undisclosed race.

Of those applicants, 2,578 had mortgage initiated: 2,331 were white, 108 were black, 50 were Asian, indigenous or Pacific Islander and 50 were of an undisclosed race. Considering Racine’s population is almost a quarter black and a quarter Latino, those numbers are low.

Ashley Madala, vice president of lending at Mount Pleasant-based Educators Credit Union, said those statistics match what is seen nationally.

“It definitely was a concern in that it hit close to home,” said Madala.

The biggest issues she has seen with applications is either low credit or a lack of credit. Educators also has programs to educate its clients about credit and how to prepare for home ownership but many first-time buyers are not aware of how much preparation has to go into a mortgage.

“It’s a process — you can’t just wake up one morning and buy a home,” said Madala. “Helping people set those goals so they can get the education they need is really integral to that process.”

She also said aside from those who are denied or who have to wait, there are even more who never submit an application.

“If home ownership is something you never saw growing up, it would never seem like something that’s attainable,” she said.

Madala, on behalf of Educators is one of six lenders that signed on to a letter of support for the city’s grant application, along with Associated Bank, Johnson Financial Group, Community State Bank, North Shore Bank and Sierra Pacific Mortgage.

“We’ve got deep roots in the community,” said Madala. “It’s important to us that members of our community are successful and are able to buy a home where we are.”

Aside from mortgages, Kidd said she’s seeing credit scores impact so many aspects of people’s lives, such as what kind of car loans they can access to. Kidd said she’s seen lots of minorities with predatory loans with interest rates as high as 30% on people’s credit scores.

“A lot of minorities are taken advantage of in that way just because they don’t know,” she said. “They don’t care if it’s variable versus fixed (interest) they just know that they need a car to get their kids to school and to get to work.”

HRI has helped people get out of predatory loans, allowing them to finish paying of those debts and start building wealth. Bad credit also affects which apartments people can rent and even whether or not they’re hired for a job.

“It’s very important that we work with minorities to get their credit where they need to be in order to become successful in life,” said Kidd.

Building wealth

Year after year, HRI exceeds its goals for how many people the organization counsels and prepares for home ownership and how many of those people end up taking out a mortgage. In 2018, HRI officials hoped to have 240 people come to their home-buyer education class; 260 came.

After that initial two-day class, they hoped 170 people would return for HRI’s intake appointment, a two-hour session during which participants bring in their financial records and the counselor pulls and reviews the clients’ credit report and credit score. They surpassed that goal last year as well.

Finally, HRI’s goal for 2018 was to have 70 clients sign a mortgage; in fact, there were 79.

HRI’s focus on helping families become homeowners is a cause front and center to Mason’s administration, which has prioritized home ownership.

“Home ownership has always been a core piece of the American dream and for more of our residents it seems out of reach,” said Mason. “We want to give our residents the tools they need to become homeowners.”

Mason sees home ownership as a way for families and neighborhoods to achieve greater stability and for more families to pay property taxes to the city, which would hopefully allow the tax rate to come down.

“It’s a win for the residents and it’s a win for the city,” said Mason.

This story has been corrected from its original version. HRI representatives and city staff attended the conference in New York City the week this story was published.

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Reporter

Christina Lieffring covers the City of Racine and the City of Burlington and is a not-bad photographer. In her spare time she tries to keep her plants and guinea pigs alive and happy.

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