What is the Problem?
Minnesota lawmakers are addressing issues with contract-for-deed home sales this legislative session. Contracts for Deeds are not inherently predatory but they are currently vulnerable to malicious use by some bad actors. Many of the victims of these schemes are African Diaspora and/or Muslims, especially the Somali community.
Contract-for-deed sales lack the protections of traditional mortgages, leaving buyers vulnerable to predatory practices. These contracts often result in high interest rates, hefty fees, and little legal recourse for buyers if they default. As a result, many buyers end up losing their homes and any equity they've invested.
History of Housing Discrimination.
Discrimination in Minnesota has deep roots, with practices like redlining and racially restrictive covenants shaping housing markets for decades. As a coalition, we also want to address the ways that housing ownership is sexist. Women and in particular African diaspora women experiencing intersecting forms of discrimination are dealing with housing instability due to single-family homes, lower wages, and more challenges in securing an affordable place to live. These practices contribute to disparities in wealth and homeownership rates for people of color.
Proposed Solutions.
To address these issues, proposed reforms aim to increase protections for buyers in contract-for-deed transactions. These reforms include measures to cap interest rates, mandate disclosures about the terms of the contract, and provide buyers with more legal rights and resources. Lawmakers hope these changes will prevent predatory practices and provide greater security for buyers, particularly in communities that have historically faced discrimination in housing.
Because we believe everyone deserves stable and safe housing.
