Detroiters will soon have access to a new program offering financial coaching and grants primarily aimed at helping Black residents save up for a home or vehicle.
The Rocket Community Fund is investing $2 million in partnership with Local Initiatives Support Corporation (LISC) to serve 1,000 Detroiters and 1,000 more clients in Cleveland, Milwaukee and Atlanta over the next three years.
The Rocket Wealth Accelerator Program, set to launch in early 2023, will help low-income residents with managing debt and building credit. The program will also match deposits participants make into their savings accounts, with up to $500 in matching funds available for people seeking to buy a home or vehicle, and up to $300 for those with short-term or emergency savings goals.
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Laura Grannemann, vice president of the Rocket Community Fund, said the program seeks to address systemic racism that prevents families from building generational wealth. It’s part of a $500 million commitment by the community fund, a philanthropic arm of billionaire Dan Gilbert’s Rocket Mortgage company, and the Gilbert Family Foundation to build economic opportunity in Detroit.
“The homeownership gap between white Americans and Black Americans is greater than it was before the passage of the Fair Housing Act in 1968,” Grannemann said. “While redlining is no longer legal, there are certainly many deeply-entrenched systems that have institutionalized a lot of the racism that was true then and is still true now. These are just often much more subtle and elusive.”
For example, Grannemann said, Black adults are twice as likely to be denied credit compared to their white counterparts. More than 40% of Black households have no emergency savings, according to the Consumer Financial Protection Bureau, and only 15% have at least one month of income saved. Grannemann said the new program allows Detroiters to have a better chance at securing financing for large purchases and building their savings in case of emergencies.
“This allows us to take a step forward and be more proactive to help people before they get that denial, before they feel that sense of defeat, to really help them build momentum towards a successful purchase of a home or an automobile to stabilize their life,” Grannemann said.
LISC, a nonprofit community development organization, will train financial and career coaches over the next year. Residents will be able to apply through Service Employment and Redevelopment Metro-Detroit, Wayne Metro Community Action Agency and the International Institute of Metropolitan Detroit. More information on how to enroll will be available in the coming months at www.lisc.org.
“As we all know, today’s economy has been especially difficult for hard-working Black and brown communities,” said LISC Senior Vice President Seung Kim. “The pandemic disproportionately impacted BIPOC people, especially from a health and wealth perspective, and the recovery has been unequal … People’s lives are big and complicated. In order to be able to save and buy a house, they need to be able to earn a livable wage, a family sustaining wage. They need to be able to grow in their careers and really have the confidence to build assets and wealth for their families.”
Eligibility requirements will be set by the partner organizations. SER Metro-Detroit requires participants to be unemployed or earning less than $50,000. Eva Garza Dewaelsche, president and CEO of SER Metro-Detroit, said her organization identified a need for financial training among residents who completed their job placement programs.
“We’re a workforce development agency, and we’re placing people into employment, but one of the things that we have found is that people need to have additional basic skills training, not just in soft skills like resume writing, but on how to manage that first paycheck,” Garza Dewaelsche said.
Detroit Mayor Mike Duggan said the city’s unemployment rate fell to 7% in November, its lowest level in two decades and poverty is also declining since the COVID-19 pandemic. Duggan said the Rocket Wealth Accelerator will help put more residents on a path to homeownership.
“We’ve moved a lot of people from poverty to the middle-class, but just because you’re making more money doesn’t mean you’re free and clear,” Duggan said. “We’ve got a lot of folks who I would say are suffering from a financial hangover from the recession; people who depleted their savings, people who had their credit scores badly reduced. We have way too many families in the city who are paying $800 to $1,200 a month in rent for houses who could be paying a mortgage and taxes for less than that and building wealth.”
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