It’s no secret that in the City of Milwaukee, out-of-state investors and hedge funds have been buying up housing inventory to turn into rentals.
The nonprofit Acts Housing is taking a comprehensive approach to counter that trend, and get more Milwaukeeans owning their own homes.
Giving homebuyers a good start through education and coaching
“Why is credit important?” asks Evette Richardson, to a crowd of about a dozen people.
She and Alex McCune are in a lofty, high-ceilinged event space just west of Marquette University. The Acts educators are leading two nights of HUD-certified homebuyer education.
It teaches people how to debunk the myths of homeownership, tips on how to achieve it and, importantly, how to get finances in order.
After Richardson surveys the room, one participant responds that a higher credit score can lead to a better life. “A better life?" Richardson chuckles. "I know that’s right!”
Bernardo Nieto Ramirez, 25, is sitting in the front row. He’s just the kind of guy Acts Housing is looking for.
“I guess I've rented for long enough now, and I think we want to move forward with purchasing a house now,” he says.
Ramirez watched his parents buy their first house through Acts when he was 11.
“So the requirement was that we were supposed to live there for the first five years, and I think [in] the seventh year, they purchased another home, and that's currently where they reside right now,” he says.
Ramirez says his parents took advantage of Acts' offer to rehab their new home themselves, and they learned how to do it along the way.
Ramirez has the basics of homeownership down, but he wants to fill in the gaps. He’s curious about loan applications, getting good terms. That’s exactly where Acts’ homebuyer coaching can step in, says Jordan Villegas, a manager with Acts' coaching program.
He recommends people always start with a coach, “to point folks into the right direction when it comes to preferred lenders in the area. We can also help make sure that we're reviewing any sort of documents along the line with you to make sure that you understand your loan application or your loan estimate, and the purchasing process and all of those moving parts that go into purchasing a home.”
A comprehensive approach
Acts is funded primarily by philanthropy, along with grants and some city and federal support.
In addition to providing homebuyer coaches to guide individuals and families through how to raise their credit scores, pay off debt and create budgets, Acts Housing can help people apply for grants through the city, county, federal and other sources to get up to $10,000 of downpayment assistance.
Acts has a lending arm that helps folks with challenging credit histories. It can provide loans up to $200,000 without requiring a minimum credit score. The organization has its own realtors and lending and home rehabbing coaches.
Then there’s Acts Homes — which buys up properties that investors would typically buy. That allows Acts to create more housing inventory to sell to people working through their program to buy a home.
Tackling the entrenched problem of housing inequity
According to a 2022 Wisconsin Policy Forum report, Milwaukee has a 28.9% homeownership rate among Black and Hispanic households. It’s the lowest combined rate among the 11 peer cities Milwaukee was included with.
“The majority of our folks have been either Black or Latino,” says Villegas. “Some of the underserved populations of Milwaukee, but our doors are open to everybody.”
Most people who use Acts’ services are first-time homebuyers who earn 50 to 80% of the area’s median income. That’s $50,000 to $80,000 a year for a family of three.
They’re the “missing middle,” says Chad Venne. He’s director of the real estate certificate program at UW-Milwaukee’s Lubar College of Business.
He says it’s a really important, but tough, population to serve.
"Because at that price point, at those area median incomes, it's really hard for home builders and apartment developers to make projects work right now with all of the headwinds of the high interest rates, the high cost of labor, the high cost of building — that they're really not able to service that AMI population without some sort of government assistance or tax credits or some affordability component,” says Venne
Home sellers can get involved too
In addition to helping homebuyers, Acts also works with home sellers, like Chad Venne.
“My family and I reached out to Acts Housing a few years ago when my grandmother had passed away,” says Venne. “And my grandmother, she lived on the south side of Milwaukee in the same house for 70 years, and that house was part of where my father grew up and my aunts and uncles grew up.”
He says when she passed away, his family felt it was important that they pass down some of that legacy.
“And so my mom and dad and my uncles were inclined to try to find somebody that wanted to live in that house, similar to what they did,” Venne says.
Houses in Venne’s grandmother’s neighborhood were being snapped up by investors who were turning them into rental properties. His family didn’t want that. So, Venne contacted Acts, and negotiated for the nonprofit to buy the house at a lower rate than if it was an open-market transaction.
“They worked on doing some subtle improvements to the building, and then they ended up selling to one of their Acts homebuying clients that had kind of gone through the education process,” he explains.
Evidence that Acts' approach is working
Over the past three decades, Acts has helped more than 4,000 individuals and families buy homes. People generally stay in their homes, and a smaller percentage eventually sell. Very few have foreclosed.
The median current Acts homeowner who purchased before 2023 has earned more than $72,000 in total equity, just more than $8,600 of equity per year of ownership. That’s as they pay monthly housing costs that Acts says on average are two-thirds of what they’d be shelling out to rent an equivalent home.
Acts’ impact has increased steadily over the decades: about a third of their homebuyers purchased their home in the 2020s.
But still, they can’t help every would-be homebuyer in need of support.
Deatra Kemp, VP of Impact at Acts, says they’re limited by capacity, both in terms of staffing and in terms of housing on the market.
“Internal capacity for sure, but also...we can only create so much capacity within the market," Kemp says. "We've already lost thousands of units, and we're only capable of clawing back 100 a year. So there's work to be done. For sure, there's a lot of work to be done.”
In the meantime, it’s wise to keep focusing on education and homebuyer coaching, says Venne.
“To me, the most powerful thing I believe that they're doing is that education piece,” says Venne. “I mean, housing is very complicated. It's not as simple as, ‘I want to go buy a house.’ Part of it is making sure that you're in a financial position to be able to do it, and that you understand all the implications that come with it.”
Back in the Near West Side, Bernardo Nieto Ramirez has completed his homebuyer education course and Alex McCune is handing out graduation certificates. When it’s Neito Ramirez’s turn, he walks up and accepts the certificate.
“He's going to be the one,” cheers McCune, one of the homebuyer coaches. “Ready to roll. Congratulations!”
Ramirez returns to his seat, hopefully on the path to follow in his parents’ footsteps and buy his first home.
Support for Seeking Solutions: Keys to Homeownership is provided by Educators Credit Union, Greater Milwaukee Association of Realtors and Geis Garage Doors.
