Real Estate Investors Sold Somali Families on a Fast Track to Homeownership in Minnesota. The Buyers Risk Losing Everything – By Jessica Lussenhop/ProPublica, Joey Peters/Sahan Journal (ProPublica) / Nov 21, 2022
For Somali Muslim families in Minnesota, a contract for deed seems like an easier path to homeownership. But predatory practices and poor regulation can make it a financial trap rather than a good deal.
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This story was produced in collaboration with Sahan Journal, a nonprofit newsroom dedicated to covering Minnesota’s immigrants and communities of color. Sign up for Sahan’s free newsletter to receive stories in your inbox.
For many Somali families in Minnesota, the barriers to home ownership have long seemed insurmountable: reluctant lenders, low incomes, short work histories, little credit.
Members of the East African Muslim community encounter an additional, unique challenge: Because of the principles of their faith, many avoid paying or profiting from interest. This means they typically won’t apply for traditional mortgages. As a result, the conventional path to buying a house — and the accompanying hope of building generational wealth — has been nearly impossible.
Roughly three years ago, a handful of lending firms began offering an “interest free” way to buy a home. Word spread fast in Minnesota’s Somali community, which numbers about 80,000 people. Families began moving out of their cramped apartments and government-subsidized housing and into homes in the suburbs with expansive lawns and enough bedrooms for their large, multigenerational families.
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