WES Mariam Assefa Fund Announces New Impact Investments to Unlock Homeownership for Underserved, Black Communities
The World Education Services (WES) Mariam Assefa Fund today announced two new impact investments totaling US$750,000 in Blackstar Stability and the Dearfield Fund for Black Wealth, both of which leverage homeownership as a tool to help Black and underserved communities build generational assets and bridge the racial wealth gap.
Homeownership is key to building wealth, yet because of systemic barriers, homeownership rates among Black households are the lowest of any other racial group in the U.S. – 75 percent for White families compared with 45 percent for Black families. Securing the necessary down payment remains one of the biggest obstacles Black households face when looking to buy a home. Among several contributing factors to the problem is the lack of intergenerational wealth stemming from historical and ongoing economic segregation and policies.
“Through our impact investments, the Fund is committed to creating more inclusive economies. Increasing access to asset ownership is an essential building block,” said Smitha Das, director of mission and impact investing at WES. “We’re thrilled to partner with Blackstar Stability and the Dearfield Fund – both emerging fund managers – as they support historically underfunded and overlooked communities to build intergenerational wealth.”
The first investment, $500,000, will go to Blackstar Stability Distressed Debt Fund, a private debt fund that helps to stabilize primarily low- and moderate-income communities by preserving affordable single-family housing, keeping families in their homes, enhancing homeownership, and attacking predatory lending practices that both undermine value and promote disinvestment in these communities. By providing this type of support, Blackstar seeks to tackle the racial wealth gap and uplift families and neighborhoods in need. The benefits to families include home equity transfer, monthly payment reduction, mortgage principal reduction, and interest savings.
“The vision of Blackstar’s social impact strategy is to restructure loans in a manner that is economically beneficial to investors while at the same time enabling families to remain in their homes, whereby the potential for wealth preservation for these disadvantaged families can be realized,” said George Scott, principal at Blackstar. “Given that nearly two-thirds of wealth for low- and moderate-income families is comprised of their principal residence, we are focused on protecting homeownership to accomplish the goal of closing the wealth gap and providing a stable environment for families.”
The second investment, $250,000, supports the Dearfield Fund for Black Wealth which was launched by Gary Community Ventures to help communities build a foundation of intergenerational wealth and financial well-being, primarily through homeownership. It offers Black and African American first-time homebuyers access to no-interest down payment funds that can be applied toward the purchase of a new home. Upon selling or refinancing, homeowners then return the amount they received from the Dearfield Fund plus 5 percent of the home’s appreciation in value to ensure that the Dearfield Fund can continue to operate.
“To build wealth today, you need an asset to acquire more assets. So how does a Black family that lacks generational assets begin to build wealth?” Aisha T. Weeks, managing director of the Dearfield Fund, asked. “To address this systemic issue, we’ve created an on-ramp to wealth creation through homeownership. We’ve pioneered an innovative down payment assistance product to accelerate Black homeownership and build intergenerational wealth.”
WES’ impact investments are focused on increasing access to opportunity, building wealth, shifting power, and advancing justice for all. These two investments are part of WES’ broader focus to address the racial wealth gap by unlocking access to ownership and asset-building for communities so they can build intergenerational wealth.
About Blackstar Stability
Blackstar Stability Distressed Debt Fund helps stabilize primarily low-income and moderate-income communities by preserving affordable single-family housing, keeping families in their homes, enhancing homeownership, and attacking predatory lending practices that both undermine value and promote disinvestment in these communities. The Fund purchases pools of homes that are encumbered by predatory forms of seller financing then convert the financing into traditional mortgages at fair market terms. After a period of seasoning, these new mortgages are sold in the secondary market and the capital is recycled to buy similar pools of homes subject to the same predatory practices. The benefits to families include but are not limited to home equity transfer, monthly payment reduction, mortgage principal reduction, and interest savings. The Fund’s focus on small balance mortgages for this subset of the population is addressing a need that is not currently being served by traditional lenders.
About the Dearfield Fund for Black Wealth
Launched by Gary Community Ventures, in partnership with Denver’s Black community, the Dearfield Fund for Black Wealth helps Black and African American first-time homebuyers access no-interest down payment assistance to use toward the purchase of a new home as a means to build generational wealth. As one of the newest ventures from Gary, the Dearfield Fund represents a breakthrough solution built at a time when no other solution like it existed.
