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The Challenge

Homeownership built the middle class in the United States and remains the way most households generate wealth. Yet home prices are out of reach for many buyers of color. The result is ever-widening racial wealth disparity, undermining economic mobility, health and quality of life for families of color.

Rather than relying on scarce public and philanthropic subsidies to close the gap, the Homes for the Future Fund creates affordability with impact investment. It unlocks a new, scalable path to growing homeownership using a market-driven approach.

How it Works

Grounded Solutions Network’s innovation is designed to benefit families of color who have historically been barred from homeownership. The Homes for the Future Fund has its roots in community land trust and shared equity models that emerged during the Civil Rights movement as a way for Black people to gain control of land and farms so they could exercise their right to vote.

The fund acquires rental homes in climate-safe locations and places them in portfolios that will ultimately transfer to community-based organizations. The fund maintains homes as rentals for up to 10 years. Home appreciation and monthly rental payments reduce the loan balance and equity accumulates.

At the right tipping point, homes sell to families at 20% below market absent public subsidies, while investors recoup their initial investment plus a small return. The remaining equity becomes a down payment. When the home is sold, the shared equity model ensures that it will remain affordable in perpetuity, building wealth over time.

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Capital raising is about validation. Folks want to make sure they're following a leader. They want to see an opportunity to follow the smart money or do the right thing for the mission. So having Wells Fargo and Enterprise put their resources behind our innovation is really the launch catalyst that we need.
Devin Culbertson, VP, Innovative Finance and National Strategy, Grounded Solutions Network