Wells Fargo is pledging $60 billion to an initiative that would boost the number of black homeowners by 250,000 in 2027.

Wells Fargo is pledging $60 billion to growing the number of African American homeowners.

The nation’s largest home loan lender announced the commitment this week, which would create at least 250,000 black homeowners by 2027. Homeownership among African Americans took a steep decline when the housing market cratered in 2008, leaving millions without their largest investment as foreclosures swept the nation.

“Wells Fargo’s $60 billion lending goal can contribute to economic growth by making responsible homeownership possible for more African Americans in communities across the country,” said Brad Blackwell, executive vice president and head of housing policy and homeownership growth strategies for Wells Fargo. “We are proud to be the first mortgage lender to make a public commitment to help increase African American homeownership. And, we are grateful for the support of key housing and civil rights organizations, who work alongside us to increase economic prosperity in our communities.”

The initiative would:

• Lend $60 billion to qualified black consumers for mortgages,

• Increase the diversity of the Wells Fargo Home Lending sales team, and

• Add $15 million to support initiatives that promote financial education and counseling over 10 years.

According to the U.S. Census Bureau, by 2024, 75 percent of the expected 14 million new U.S. households will be ethnically diverse. Blacks are projected to represent 17 percent, or the third largest segment, of the new households.

“NAREB applauds Wells Fargo’s $60 billion loan commitment,” said Ron Cooper, president of the National Association of Real Estate Brokers. “The bank is the first financial institution to acknowledge publicly black Americans’ wealth-building potential which could be greatly improved through homeownership.”

The African American lending program is the second initiative from Wells Fargo’s Housing Policy and Homeownership Growth Strategies group, which advocates for minorities, first-time homebuyers and low- to moderate-income customers. In 2015, the bank struck an agreement with the National Association of Hispanic Real Estate Professionals to launch the Hispanic Wealth Project.

"Homeownership has become an indispensable part of being a full participant in American society," said Marc H. Morial, president and CEO of the National Urban League, which provides homebuyer education and counseling. “An erosion of homeownership rates among African Americans represents not only a devastating financial loss but a barrier to full participation in the American dream.”

According to NAREB’s 2016 study “The State of Housing in Black America,” housing finance barriers such as credit-scoring models, lack of affordable housing inventory, unemployment and under-employment contribute to low homeownership among African Americans. The study also revealed barriers such as the costs associated with accessing mortgage credit, limited money for down payment and lenders who refuse to extend credit to prospects with lower credit scores and smaller down payments.

Surveys commissioned by Ipsos Public Affairs in 2016 found African Americans view homeownership positively. According to the poll, 90 percent of African Americans say homeownership is a “dream come true,” 79 percent say it’s essential for building families and 51 percent are considering buying a home in the next two years.

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