The power of property ownership in the African American community has always been about more than bricks and mortar it’s about access, equity, and the ability to create generational wealth. Today, the mortgage market is presenting a rare combination of changes that, if understood and acted upon, can help narrow the long-standing homeownership gap between Black and White households.
As of 2023, the Black homeownership rate hovers around 44.7%, far behind White households at over 72%. Even with the largest annual increase among racial groups in recent years, the gap remains a glaring reminder of systemic barriers rooted in decades of housing discrimination, redlining, and inequitable lending practices. Black households are also disproportionately “cost-burdened,” meaning they spend more than 30% of their income on housing in most states. This creates a cycle where saving for a down payment or investing in additional property becomes far more challenging.
Two recent developments in the mortgage market may help turn the tide if we take advantage of them. First, the Federal Housing Finance Agency (FHFA) has approved the use of VantageScore 4.0 for mortgages guaranteed by Fannie Mae and Freddie Mac. This credit scoring model is a game changer. Unlike traditional credit scores, VantageScore 4.0 factors in alternative data such as rental payments, utility bills, and other recurring expenses. For many Black households particularly those who have historically been “credit invisible” or underbanked this opens the door to mortgage eligibility without the need for years of credit history built solely on credit cards and loans. Analysts estimate that up to five million Americans could benefit from this scoring change, a significant portion of whom are Black borrowers.
Second, mortgage interest rates have taken a welcome dip. In August 2025, the average 30-year fixed rate dropped to around 6.6%, the lowest since April. This has triggered a surge in refinancing applications, with refinances now making up nearly half of all mortgage activity. For Black homeowners, this moment presents a unique opportunity. Refinancing at a lower rate can reduce monthly payments, free up cash for home improvements, or even create capital for purchasing additional property. For those with high-interest loans from just a year ago, the savings could be substantial.
The combination of improved credit access and favorable refinancing conditions is more than a financial opportunity it’s a strategic pathway to closing the wealth gap. Imagine a scenario where a family uses VantageScore 4.0 to qualify for their first mortgage, or a homeowner refinances to lower their payments and then uses the freed-up funds to invest in another property or a small business. These are not just transactions; they are building blocks for generational wealth.
It’s important to remember, however, that access alone will not erase the impact of decades of discriminatory housing policy. Black borrowers are still denied conventional mortgages at higher rates than White borrowers with similar credit profiles. Appraisal bias, lending disparities, and income gaps remain persistent challenges. But by arming ourselves with knowledge and acting quickly in moments like this, we can chip away at those barriers.
For the African American community, “Property is Power” is not a slogan it’s a call to action. Today’s market offers tools that can help level the playing field, but those tools only matter if we use them. If you’ve been shut out of homeownership because of a lack of traditional credit history, explore how VantageScore 4.0 might change your eligibility. If you already own, check your current interest rate and run the numbers on refinancing.
Every mortgage approval, every lowered monthly payment, every additional property owned is a step toward economic self-determination. The gap may be wide, but with strategic action and a willingness to seize moments like this, we can close it one property, one family, one generation at a time.
Dr. Anthony O. Kellum – CEO of Kellum Mortgage, LLC
Homeownership Advocate, Speaker, Author
NMLS # 1267030 NMLS #1567030
O: 313-263-6388 W: www.KelluMortgage.com.
Property is Power! is a movement to promote home and community ownership. Studies indicate
homeownership leads to higher graduation rates, family wealth, and community involvement.
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