CBC Mortgage Agency

NMLS: 1186381
912 W. Baxter Drive, Suite 150
South Jordan, Utah 84095

Main: 866.563.3507
Servicing: 866.563.7572
Fax: 435.237.0022

Building Generational Wealth Through Homeownership

December 6, 2021 By

In 2019, the US Federal Reserve issued a report stating that homeowners had a median net worth of $255,000. Renters, on the other hand, had a median net worth of $6,500. This staggering difference in wealth represents an enormous advantage for some homeowners—and possibly their children.

“You enter the middle class through homeownership, right? That’s the leap. You’re able to understand that you’re building equity.” ~Shelley Halstead, founder and director of Black Women Build–Baltimore.

Homeownership is that powerful—responsible homeownership helps break the chains of poverty and significantly increases the odds that future generations will enjoy better opportunities, and this largely happens through generational wealth. Let’s break it down.

What are 2 forms of generational wealth?

Generational wealth comes in two forms. The first is literal assets, be that inherited or gifted money, or bonds and stocks, or real estate, and/or family businesses. Gifting an adult child money for a down payment on a home is one of the most common ways of passing along generational wealth. In fact, the odds are good that the ability of parents to gift down payment funds to their children is directly attributed to the fact that the parents themselves are homeowners, making each home like an individual link in the chain of generational wealth.

CBC Mortgage Agency’s Tai Christensen has shared her own story many times on how homeownership not only enabled many generations of her family to share wealth, but also allowed them to break the trends that follow so many minority families:

Homeownership drives American wealth. It empowers families to transform their monthly housing expenditures into lasting equity passed through the generations. It enables families to better launch a business, pay for college, or invest in other dreams. Intergenerational wealth creates opportunity and advancement for those fortunate enough to be the familial recipient. I know this is true because I have been lucky enough to experience this in my own life. In 1936, my great-grandmother, a black widow living in North Carolina raising four boys while working as a housekeeper, purchased her own home. Her decision created generations of homeowners in my family. Nearly everyone in my family owns a home and has gone to college because of her choice over 80 years ago. (Tai Christensen)

The second form of generational wealth comes from knowledge. Parents who teach their children how to budget, save, build credit, and spend wisely are providing their children with habits that may lead to future success.  If these children ultimately receive money, from their family or through their own efforts, they will have the wisdom to know how to grow it rather than just how to spend it.

In both circumstances, the availability of down payment assistance is vital to the health of generational wealth in America. Families that can’t afford a down payment—especially when they are young, before years of equity have passed them by—may not have access to one of the most consistent methods for forging the first link in the chain of generational wealth. Down payment assistance meets this need by providing an affordable loan, gift, or grant to help families get started. And, to go one step further, many down payment assistance programs include education initiatives to make sure that first-time homeowners know how to responsibly plan for their home and finances.

Chenoa Fund’s down payment assistance program may be able to build generational wealth

Chenoa Fund, offered by CBC Mortgage Agency, is a leading, national program that provides affordable down payment assistance to borrowers and provides eighteen months of post-purchase counseling to ensure that our homebuyers remain homeowners. To learn more about Chenoa Fund, please visit our website, or reach out to our information team.

Chenoa Fund down payment assistance is offered through compliant correspondent lenders.